[opendtv] Re: Opinion: Apple TV set - an enduring fantasy?

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Wed, 12 Dec 2012 08:40:00 -0500

At 2:47 PM -0600 12/11/12, Manfredi, Albert E wrote:

But that's great. So let them! They are subsidizing the rest of us. This is a non-problem.

NO. They (and this includes me) are perpetuating the business models of two huge oligopolies that exist because government is sharing in the largess, and the politicians benefit from the media propaganda machine:

An example:

Our Sepember Cox cable bill was $99.65

Total to various government taxes and fees: $13.18

1. Local communications service tax - $5.42
2. State communications service tax - $7.20
3. FCC Fee - $0.08
4. State sales tax - $0.48

Then there's the absurd fees for the set top box and HD-DVR:

Advanced TV HD DVR Receiver - $7.99
DVR Service - $9.99

So yes, the 85% who subscribe to an MVPD service are subsidizing those who rely only on FOTA and/or OTT services.

But even here, governments are taking a nice cut out of what you pay for your monthly broadband service and or wireless service. By the way, there are an increasing number of people who are using wireless broadband at home because it is cheaper for basic e-mail and web browsing (not so useful for video streaming unless you are on a truly unlimited data plan).

But the whole notion of subsidizing content has become confused and mostly meaningless. The conglom business model relies on revenue all along the cascading waterfall through which content travels. First run network dramas and sitcoms lose money when they are broadcast, but keep bringing in revenue as they move through the food chain, ultimately delivering large profits.

The hidden cost of subscriber fees is the really big problem; the one that allows this monster to keep feeding and growing. In some cases these fees pay from programming and rights fees (especially sports). In many cases they go to the bottom line (retrans consent fees). ESPN is bringing in more than $6 billion a year in subscriber fees.

So, yes you realize some benefit from what the 85% are paying, but at a huge cost. Most of what you get is crap, which is the reason, no doubt, that you supplement what you can get FOTA with OTT programming from the Internet. Most of the stuff people really want will cost you.

As we have discussed many times before, nothing is free. FOTA is advertiser subsidized - you pay at the checkout counter. Netflix has a subscriber fee, as does Hulu Plus. Apple and Amazon charge rental or purchase fees for content.

The real issue here is what the public will tolerate, and when we will reach the crossover point where it will be cheaper to buy content ala carte rather than through bundled subscription services?

This sounds very much to me like the guy who keeps banging his head against the wall, and then complains that no one is capable of making his headache go away. Hard to feel empathy, eh?

I really do empathize with you here. If 85% of the American public were like you it is likely that this whole house of cards would crumble. But we are living through a plan put in place decades ago by the politicians and congloms; one for which the analogy of cooking a frog is highly applicable.

Put a frog in boiling water and it will immediately jump out.

Put a frog in a pot of cold water, turn on the stove, slowly turn up the heat, and the frog will happily stay there until it is cooked.

So it boils down (sorry) to a nation of TV addicts, who are hooked on the drug and are unwilling to go through the withdrawal pains of boycotting the media and the sports franchises until the house of cards collapses.

Ironically it would not take long to bring it down. We would just need a broadband connection, the conviction NOT to watch the content from the congloms, and perhaps a cheap Netflix subscription to maintain a base level of comfort during the withdrawal process.

And by the way, I don't "wait" for any of the content I watch. You're laboring under the misconception that cable gets everything first, and then it reaches the OTA or FOTI distribution pipes. This was something that you "predicted" would happen, years and years ago, but it never did!

Sure you do.

Cable gets some first run programming; the broadcast networks get some too. The most valuable non-sports programming usually is made available via the broadcast networks or premium channels like HBO first. Original (high value) programming is slowly moving to cable, but most of the cable shows operate on an entirely different economic model - per episode cost below $50,000.

Yes, you can get first run network content live via FOTA, like the 85%.

Almost everything that is available via the Internet (without you MVPD password) is delayed.

Almost everything on cable other than news and live sports is delayed; YOU cannot access any of this when it is "live" without an MVPD password. The typical cable show runs multiple times over a month or more; only the first showing can be considered "first run;" and those cable networks that do make this content available (without a password) usually delay when it is available via the Internet.


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