[opendtv] Re: Sony To Take Viacom Over-The-Top | Multichannel

  • From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Wed, 17 Sep 2014 10:07:28 -0400

On Sep 15, 2014, at 7:19 PM, "Manfredi, Albert E" 
<albert.e.manfredi@xxxxxxxxxx> wrote:
> Craig Birkmaier wrote:
>> You view the availability of content from the MVPD bundle, based
>> on authentication that you are paying the subscriber fees, as an
>> act of desperation.
> Yes, I do. Keep milking the old model until it gives out. John Skipper said 
> as much himself. Today, NPR reported that overall, MVPD subscriptions are 
> dropping at 3 percent per year, and that number is 5 percent per year for the 
> 24 to 35 age group. So yes, to understand a trend, this is the type of 
> information you're supposed to take into account. As John Skipper is doing. 
> And as any business has to do, to remain relevant.

They (the content and MVPD oligopolies) have been milking this business model 
for thirty years, through multiple technology transitions. Over those years 
they have:
Added hundreds of channels, 
Rebuilt the cable infrastructure twice, 
Added DBS service, 
Added telco service,
Gone digital and HD, 
Become the dominant provider of broadband, 
Grabbed a huge percentage of TV advertising revenue ( both national and local)
Developed In network VOD services
Deployed more than a quarter million Wi-Fi hotspots

So now they are embracing the broadband technology they control, to deliver the 
content they control to authenticated subscribers, to a new generation of 
mobile screens.

And you call this an act of desperation!

You are delusional Bert.

This is nothing more than the evolution of several powerful oligopolies that 
make more money, and become more powerful, with each technology transition.

As for Skipper and the stats you posted, your numbers don't add up. The 
declines in MVPD subscribers are real but relatively small. 

The behavior of younger viewers is a very serious concern. They have different 
expectations about how content is consumed. But they still pay! 

The future for hundreds of streaming channels of specialty content is very much 
in question. Not that there is little value in this content, but rather, the 
trend is toward on demand consumption, rather than sitting on the sofa and 
surfing to see what's on. The existing streaming network model is being 
transformed into a VOD model for pre-produced content; the Internet is the 
appropriate technology to deliver these programs. Meanwhile, live content that 
draws people to the TV is becoming even more valuable.

So the issue becomes quite simple. Can the congloms continue to protect "the 
bundle," as they transition their content networks to a VOD consumption model. 

We can argue endlessly about statistics. But there is little reason to believe 
that these oligopolies will not evolve and grow. They have demonstrated the 
ability to do so for nearly a century, 

>> The reality is that this [online option] is adding significant
>> value to the MVPD bundle.
> To me, that's just MVPD propaganda-speak, Craig. Marketese. Something you'd 
> expect your cable guy to tell you, to keep the customer happy with his 
> old-school TV setup.

To me it is real Bert. I use these authenticated services frequently, 
especially Watch ESPN.

>> Netflix may well be expanding into other markets outside the U.S.,
>> but the congloms are the big winners here.
> Well, of course! That's the whole point. The owners of content can make use 
> of aggregation sites such as Netflix, or Amazon, or of sites of their own if 
> they so choose, to create any number of different distribution schemes, for 
> THEIR OWN BENFIT. Thoroughly different from what reality had to be in the 
> days of walled garden wideband networks. That's why trying to keep the exact 
> same MVPD bundles online, dependent on the walled-garden-model subscription 
> system, seems like such an obvious attempt to milk something for all it's 
> worth. Legacy thinking, basically.


Controlled evolution.
>> Would consumers like to choose and pay for channels on an ala
>> carte basis Bert?
> Smart consumers are already voting with their wallets, Craig. See above about 
> the NPR news item. Maybe not always a la carte per se, but at least, 
> different "cartes." You don't like one restaurant, you are now free to go 
> elsewhere now.

Not really. 

You are free to watch a subset of content that is already offered for free. You 
can subscribe to Netflix and binge on library content.  If you are cleaver you 
can borrow authentication credentials and watch live streams from the bundle.

There is no ala carte "leakage." There is a shift in premium streaming services 
like HBO to OTT VOD services.  But HBO is not part of the bundle.
>> We are talking about TV of the present
> No, *you* keep talking about TV of the present (and mostly past). I'm talking 
> about where this is clearly going. The Sony-Viacom deal is the future, as are 
> similar deals that will sprout. Netflix, Hulu, Amazon, are the future too. 
> What content they will get in the future is likely to be different from what 
> they have today. You make it sound like they only get old stuff. Even that 
> isn't true, and certainly it need not be in the future. The old MVPD bundle 
> is the buggy whip. But of course, the MVPDs can also modernize.

They ARE modernizing Bert. They do this continuously.

The VOD portals are dominated by "old stuff."  But they understand that the way 
to get people to pay is to offer some original new stuff. In essence they are 
buying their way into the oligopolies.
>> ESPN CANNOT expand their audience enough with free ad supported
>> OTT delivery to make up for the $25 billion in subscribers fees
>> they collect each year.
> You must have missed the part where ESPN is losing viewership. They are busy 
> rethinking their different offerings, to stop the loss of viewership, as we 
> speak.

Where did you come up with that one. Their ratings are going up. Yes, they have 
lost a few cord cutters, but most of these people did not watch ESPN. That's 
part of the reason they cut the cord - no need to pay for stuff they don't 
watch, or they can get Netflix for less than $10/mo.
> Craig, here's a cheap shot, I'll admit. Back in 1991 or so, the FCC mandated 
> spectrum-compatible HDTV. That was a significant step. It promised HDTV for 
> the masses. I had no trouble predicting this HDTV was going to become the 
> "new normal" for TV.
> Surprisingly, it took "some of us" a good 15 *years* or more, to accept this 
> new reality. "Some of us" thought HDTV would be too expensive for the masses, 
> and kept insisting it was so, i.e. a "niche market," well after it was 
> obviously not. By stubbornly hanging on to this view, even when HDTV prices 
> fell to the $1000 mark, but were still not selling as well as the old tired 
> NTSC CRTs, "some of us" kept insisting that HDTV was niche. This went on well 
> into the mid 2000s, Craig. That's why I say, at least 15 years.

Yes, transitions take time. HDTV was inevitable, for no other reason than 
higher quality TV was suppressed for years by the lack of a viable alternative. 
It is very informative to look at the transition in Europe. They chose the 
digital component SDTV route for several reasons:
1. It delivered most of the improved picture benefits to lower cost TVs.
2. It leveraged the investment of mostly state controlled broadcasters in 
digital component equipment.

The reality is that the HDTV display transition was not driven by U.S. 
broadcasters, at least until HD sports broadcasts became available. In Europe 
HDTV has not been driven by broadcasters at all. The biggest driver, both in 
the U.S. And Europe was the DVD, which delivered digital component SDTV movies.

The next biggest driver was Moore's Law, that made affordable flat screen TVs 
and computer based HDTV production a reality.
> When people hold on to some unreasonable belief system like this, my 
> assumption is always that there's some hidden agenda. You know, like when 
> people insist that the universe is only 6000 years old. It can't be because 
> they're luminary scientists, right? There has to be some ulterior motive. Or 
> at least, that's what immediately comes to mind.

We live in an age where it is easy to express opinions, easy to build arguments 
on a "house of cards," easy to buy engineers and scientists.

The Antarctic ice cap is now at its arrest extent in recorded history.

The Arctic ice cap is at its largest extent since 2004

The population of polar bears is increasing.

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