At 6:42 PM -0500 7/17/12, Manfredi, Albert E wrote:
I already deal with all sorts of businesses on the Internet, right? Without this unnecessary, non-Internet-related middleman. Amazon, Hulu, cbs.com, abc.com, etc., my bank, my 401K, my mortgage company, my lawn service company, why can't I get my TV the same way?
Because government sanctioned oligopolies are trying to control the evolution of the media markets to maintain the "illegal" tying of services, which in turn generates billions of dollars for these industries. These "second revenue streams" are only possible because of political gerrymandering at all levels of government, from local cable franchise fees to Federal legislation. Re-transmission consent has become a sledge hammer that the media congloms can use to give their partners in distribution (the MVPDs) a never ending excuse to raise rates - "it's not our fault that rates keep going up, its the program providers..."
If the content is entirely ad-supported, then there is no problem. Just go to the networks' own sites. If the content requires a subscription, OTT sites do that now, plus the networks can also provide controlled access in the future, at their own sites.
But the content IS NOT entirely ad-supported, and YOU are a prime example of why the congloms are looking beyond ad revenues to generate profits. You are willing to spend a few bucks on technology to bypass their preferred business model - paying twice via an MVPD subscription. Like millions of Americans, you record programs and skip commercials.
You WANT the congloms to bypass the distribution oligopoly that you detest, hoping to get a better deal by going to the source.
So they are shutting you down, trying to come up with other ways to get you to pay for the content.
First they gobbled up more than 90% of the programming we watch, and tied it to a subscription TV model where they can keep raising subscriber fees. Now they are trying to tie OTT distribution to the same subscription.
No wonder the public is losing their "trust" in government, when government/media collusion is used to create one of the most powerful market "trusts" in history. The article I posted that started this thread does not say that this "tying" is not working; it simply says that its been a little more difficult than the congloms expected. And it says nothing about the government stepping in to challenge what is happening using existing anti-trust legislation.
The MVPDs are the bagmen.For example, take HBO. Why can't HBO simply buy the services of a CDN, make their servers easily accessible to broadband users on any ISP, and charge for access? Who needs another bagman?
HBO is owned by Time Warner, the only media conglom with roots in the cable industry. Check out this list of current Time Warner assets:
http://en.wikipedia.org/wiki/List_of_assets_owned_by_Time_Warner#Current_assetsHBO is one of many ways that Time Warner distributes premium Hollywood content. Warner Brothers licenses its movies to Netflix, Apple and others.
And then there is Time Warner Cable - being "the bagman" is part of their DNA.
Or, make their stuff available on any of the existing OTT sites, like Hulu Plus, Netflix, or Amazon?
They do... but YOU must pay!
We are told time and time again that people only really watch a small number of programs on their MVPDs anyway. Even without the OTT consolidation model, how hard can it be to subscribe to a few TV sites, once you get your TV from the Internet?
It is obvious that the technology exists to offer content on an ala carte basis. In many parts of the world this is becoming the norm, since TV viewers in developing economies cannot afford $70-100 per month for their entertainment fixes.
But here in the U.S., with support from the government, they have established a lucrative "trust" that is critical to current revenue growth, and future market dominance. Faced with technological innovation that represents a huge threat to their future viability, they are using illegal bundling to prevent real competition.
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