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

  • From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Mon, 22 Sep 2014 23:18:04 +0000

Craig Birkmaier wrote:

>> Because the value proposition of the cord is degraded, with the
>> Internet offerings, supplemented by OTA TV for live TV and news.
>
> Perhaps. They are providing everything they always have, PLUS
> some channels via TV Everywhere. That's not degraded!

Like I said before, that's marketing blather for the MVPD mouthpiece. The value 
proposition changes, and even with an improving economy, the consumer is 
capable of re-evaluating his options, and continues to do so. In some cases, no 
doubt, they may just drop premium channels such as HBO, in favor of Netflix, 
Amazon, and/or Hulu Plus. In other cases, they just drop the TV package 
altogether (which I take as being "the bundle"), although they may still use 
Internet and telephone service. To me, "cut the cord" means to drop the TV 
package completely, but not the other services necessarily.

> In the article you quoted from Wired, they note that many content
> companies are reluctant to support TV Everywhere because of poor
> security:

Sure, and that also plays into this restructuring of TV as Internet content. 
It's merely an additional motivation for content owners to get beyond this MVPD 
"the bundle" model. The point of the article was, this Internet TV stuff can be 
done right, and here are some guys more likely to get it right.

>> It's a little absurd to ask when 50 percent have cut the cord.
>
> I did not ask that.  I said when on 50% of home still subscribe
> to the bundle.

Very close to 100 percent of homes have some type of TV service. In 2012, which 
was supposedly the high point, I'll guess that close to 90 percent had "the 
bundle." And I'm sure that you were saying so then, because it suited you at 
the time. So if anything, your question is even easier to achieve than what I 
was saying, although they are similar. But either way, the question is 
meaningless.

> The networks DID lose more than half of their audience. But
> they are still hanging around.

Overstated. You are only talking about viewership of FOTA ABC, CBS, and NBC 
shows. The congloms, which own these networks, still create the vast majority 
TV content, which includes the highest value content, in demand all over the 
world. So these congloms have simply *diversified*. That's how they responded 
to MVPDs, in the 1980s, instead of just sitting around. Your contention is more 
for dramatic effect than anything else. And the broadcasters themselves have 
increased their value by adding subchannels, and are still experimenting with 
these. And they have gained some viewership.

> WOW!  From ~84% to 78%.

Funny. You were arguing for years it was in the 90s. Okay, so the high point 
was, say, 90 percent in 2012. The prediction for 2019 is 78 percent. John 
Skipper says that even a 10 percent drop would have a significant effect on his 
operations. What's 90 minus 10, Craig? And do you really think ESPN is going to 
sit around and do nothing in the meantime?

> Each new threat turns into new opportunities. That DOES NOT
> mean that they are getting ready to ditch the bundle.

"Threat?" MVPD mouthpiece talk? For existing or aspiring TV content creators or 
owners, and for Internet entrepreneurs (which btw includes or should include 
the very same MVPDs), these are all "opportunities." So for example, when 
Viacom and Sony made that deal, I did not see anything from Viacom that 
indicated that Sony had to adhere to some archaic and unnecessary "content 
bundle," to include non-Viacom content. Ditto with HBO. Ditto with Netflix, 
Amazon, and the others. Whatever they offer is TOTALLY UNRELATED to any MVPD 
basic or premium tier bundles.

The "threat" is only to an archaic business model, Craig. Just as the car was a 
"threat" to the stable owner who wasn't quick enough to reinvent himself into a 
garage owner.

> Try again. And remember, Netflix and Amazon are spending
> hundreds of millions on exclusive original content.

So what? And Sinclair is also considering creating content. The point continues 
to be, owners of content that was exclusively dependent on MVPD bundle or 
premium tier distribution *are today* re-evaluating their options, and some are 
*already* distributing this content independent of an MVPD bundle or tier. 
Perhaps with some restriction, e.g. next day or next week, but not necessarily. 
The fact that these content troves may also get into content production is 
really cool, but it hardly invalidates the current discussion.

> As for ESPN, those subscriber fees have allowed them to lock
> up most of the most valuable live sports rights in the U.S.
> Their entire business model is built around access to
> exclusive content.

Which John Skipper says he'll distribute using whatever models make sense at 
the time, is beginning to do so with MLS content, and that he's keeping his 
options open for the rest.

> Yup. Unfortunately, this will mean that the existing congloms
> will leverage the Internet to give people what they want.

Unfortunately?? "To give people what they want" is now "unfortunate"? Funny. 
This is not unfortunate for the consumer, nor the conglom, nor the aspiring 
content creator, nor the Internet entrepreneur. So, who exactly are you talking 
about? The OTA broadcaster? Yes, unless they carve out an important Internet 
role, and/or do what Sinclair mentioned.

Bert

 
 
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