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

  • From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Wed, 24 Sep 2014 10:07:59 -0400

On Sep 23, 2014, at 6:09 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx> 
> Nowhere in this do you see that Sony would adhere to a tier of bundles like 
> those MVPDs have been offering. Possibly they might, but if they did, they 
> wouldn't get much of a competitive advantage. The question is how you offer 
> that desired content, and how you price it. The Netflix model managed to snag 
> many movie aficionados from the traditional MVPD movie channels precisely 
> because they offered a different formula.

They would not have much competitive advantage offering a subset of the bundle. 
Yes they could play around the edges of the business model, as do all of the 
companies in the MVPD business. It should tell you something when there are 
three major MVPD competitors in many markets, yet there are only slight 
differences in pricing and the core bundle.

Netflix offered a different technology - content on demand. And they built most 
of their service on TV content, not movies, where they are still lagging.

> Not at all. Those who either cut the cord entirely, or reduce to basic 
> service and perhaps supplement with OTT pay sites, don't pay more. Those who 
> are wedded and faithful to the MVPD traditional model are the ones who pay 
> more. And they will continue to do so, as that model soldiers on into the 
> sunset.

You can ride a bike to work and save money to. Doing without something is fine. 
Paying for something you want is fine too.
>> It VALIDATES the current discussion. Everyone has access to "USED"
>> content to offer as part of a VOD service. It is the exclusive
>> original content that sells the subscription.
> You still don't get it, Craig. These are orthogonal discussions. One point 
> does not validate the other.
Rubbish. They go hand in hand. 

> MVPDs for years and years successfully existed by doing nothing more than 
> distributing other people's content, either new stuff also available FOTA, or 
> recycled content no longer available FOTA.

Until they started creating new networks with exclusive content. That's when 
the broadcast network ratings started to tumble.

> HBO existed for a long time only on recycled movies, by subscription.

They offered movies without driving to the video store. They got by until cable 
started offering movies on demand. They started creating original programming 
to satisfy two important issues:
1. To offer content without the restrictions placed on broadcast programming - 
sex nudity, profanity, violence.
2. To attract subscribers.

> The fact that HBO might lately have gotten into creating its own content does 
> not change that they also recycle movies.


How about 1975, when the carried via satellite "the thrilla in Manilla" boxing 
By the early 90's they were producing multiple original series that fueled 
significant growth.

And they were typically one of the first places to see movies after they ran in 
theaters, usually months ahead of their release on VHS.

> To remain competitive, after others get into the recycling movies game, or 
> get into whatever game you were good at until now, you have to expand. That's 
> all this demonstrates.

The broadcast networks "expanded" into news magazines and reality programs. 

Did they do this to remain competitive?

No. They did this to reduce costs that were spiraling out of control for 
original sitcoms and dramas. The money flowed into new distribution channels 
that had the revenues to pay for it, and the ability to avoid the content 
restrictions imposed on broadcasters.

> Some people only want the recycled movies. For them Netflix was a good 
> choice. Then Netflix saw what HBO was doing, and they said "me too." SO WHAT?

Not even close.

The Netflix DVD service competed with Blockbuster, not HBO. When they launched 
the streaming service it was built primarily around off network TV shows and 
older movies. They moved quickly into original content to attract subscribers.
>>> 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.
>> Skipper said no such thing.
> Groan. Here we go again. Will you really never learn? Check back, before 
> contradicting.

Good advice Bert!
> ----------------------------------
> http://soccerly.com/article/an3rocha/espn-tests-new-business-model-good-news-for-mls-fans
> . . .
> According to ESPN President John Skipper, they're trying a new strategy in 
> where they are they believe there could be more profit by engaging digital 
> content with on-screen ads and a direct-to-consumer strategy.
> "We've just got to think about other business models," Skipper said at last 
> week's conference "We're not far along on any them, but we do think about how 
> we might capture more money direct from consumers. You saw us buy MLS digital 
> rights. It was a clue, but we still don't know what we will do with that. 
> That's a direct-to-consumer package we bought. We could do it just like it's 
> done now through multichannel distributors or we can do something different 
> with it to go direct to consumer," he said.
> ----------------------------------
> Read again and again the second paragraph in that excerpt. "We've just got to 
> think about other business models." "Direct to consumers." What do those 
> words mean? And then tell me how my description of what Skipper said was off 
> the mark.
>> Yes, ESPN is facing new challenges, but they are not going to bypass the
>> bundle model
> Sorry, you're simply not reading.
>> And they always make us pay. That is not hoping to change because of
>> "this" technology shift.
> Those who adapt always come out ahead.
> Bert
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