[opendtv] Re: Retransmission battles signal trouble for free TV (too pessimistic?)

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Tue, 5 Jan 2010 10:30:40 -0500

At 9:56 AM -0500 1/5/10, Tom Barry wrote:
The following article is from Broadcast Engineering and I agree with
much of it in principle.  It is nothing we have not discussed here
repeatedly.  But I think I take issue with the shorter term forecasts of
problems with TV advertising revenue since I do believe the economy has
already turned.

I guess you did not really understand what Michael was saying. THe decline in revenues fro broadcasters is not tied directly to the recession; there was a time when the broadcast nets and local stations made MORE money during a recession as people stayed home and watched more TV.

Look around Gainesville. How many car dealerships have been closed in the past year?

I can think of at least five. This is a business that was vital to local broadcasters, a highly competitive business. But the auto industry has restructured, in part because there were too many brands and too many dealers. A significant portion of automotive related advertising is NEVER coming back.

But more to the point, Michael points out that a significant portion of TV advertising revenues are moving from broadcast to cable, and that local stations are relying on subscriber fees to survive. When the networks go direct with the MVPDs, you can say goodbye to broadcasting as we know it.

Mark Aitken told us that at least some broadcasters are trying to re-invent their business model. I expect that Sinclair has a better handle on this than most. But Sinclair also has (had) a synergistic relationship with other businesses that CEO David Smith owns, namely car dealerships. Talk about taking a hit...twice!

I hope Mark is right and that broadcasters do reinvent their business model and remain viable. Unfortunately, I have seen few positive signs that this is happening.

Broadcasters need to get into the content creation business to survive. There is no longer a scarcity of distribution channels; reliance on other delivery platforms to deliver bits you buy from others is not a long term survival strategy.

Regards
Craig



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