[opendtv] Re: OTA and MVPD competition
- From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
- To: <opendtv@xxxxxxxxxxxxx>
- Date: Thu, 7 Feb 2008 15:19:01 -0500
Dan wrote:
> I don't follow. Don't you think that if ESPN were
> available for free, cable operators would be unwilling
> to pay the same $3/month that they are currently
> paying?
Not necessarily. Let's say that one ESPN channel were available over
DTT, but the other ESPN channels only over cable, and of course all the
zillions of other cable channels would still exist.
What would a cable subscriber do? Would the cable subscriber decide to
use a combination OTA and cable, or would most cable subscribers want
just cable? If the latter, then presumably they would be willing to pay
some amount for the privilege.
The market takes care of these problems. If OTA reception is so perfect
that no one needs to rely on cable, then cable companies could save
themselves the $3/sub/mo or whatever, Disney will continue to get the
income they want, and cable subscribers might get a slight break on
their monthly fee. Who loses? No one.
> If ESPN figures that they would lose more subscription
> income than they would gain from an OTA outlet, then
> they won't do it.
Agreed. From a 30,000 ft altitude, it seems very unlikely to me that
ESPN, or Disney, can actually net more money using cable distribution
than by using more efficient method, *if* they had the option. Often,
there is no option, because there isn't enough OTA spectrum. So for the
channels with mass appeal, it seems impossible to me that exclusive MVPD
distribution is the best option overall.
> In principle it shouldn't make any difference. The
> content provider doesn't need to own the
> infrastructure. That's true for both cable and OTA.
Yeah, I agree with that. I should have said that if the content provider
owns an infrastructure, he *might* not be as ready to allow his content
over some other infrastucture. But I agree, it all comes down to
revenues to the content provider.
Bert
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