[opendtv] Re: Streamingmedia.com: The State of OTT 2014
- From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Mon, 3 Nov 2014 08:28:06 -0500
On Nov 2, 2014, at 8:58 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx>
wrote:
> There are many gems in here for Craig. I'll just quote a few, the first being
> the "move the bundle to the Internet."
>
> "In other words, big media is willing to work with these vMVPDs, as long as
> the vMVPD buys a package and provides that content as a package to the
> consumer.
Exactly. The content owners have no problem with vMVPDs, as long as they
compete with facility based MVPDs on an equal footing. The following quote from
the article articulates this quite well:
> "We could certainly be happy to license our content to a virtual MVPD," said
> Jay Rasulo, Disney Corp's CFO. "Fom our perspective, [they] have to buy the
> package of services that we sell, . . . do that with other media companies
> and put together something that looks very much like the existing MVPD
> offers."
This is exactly what I have been saying all along. Same old business model with
the advantages (TV Everywhere) of a new technology.
You choose to ignore this and focus on the analysis of the author:
> "The problem with this scenario, however, is that consumers are cord cutting
> precisely because they don't want a package, but true choice: the ability to
> choose what they pay for, at a very granular level, and choice to consume on
> any device at any time."
DUH!!!!!
Sounds like one of those Geico commercials: "everybody knows that, but did you
know..."
As the article points out, here we are 20+ years after the passage of the 1992
cable act and these bastards keep ignoring it. They are also ignoring the
unbundling of cable boxes required by that legislation.
Doing studies to find out what consumers WANT is easy. GETTING WHAT THEY WANT
from three powerful oligopolies - content, facilities based MVPDs that are
becoming ISPs, and the telcos - is an entirely different matter. Analysts
everywhere are predicting the imminent collapse of these oligopolies; its a
good headline to drive page hits. But the damage to date has been minimal,
driven as much by a terrible economy and some fundamental changes in program
consumption that are the REAL long term threat.
It is appointment TV that is dying, except for live events. And as the article
points out, the ability to avoid ads is a major factor, whether it is the Dish
Hopper, or the Netflix ad free VOD bundle.
The real threat to the extended basic bundle is that nobody is watching live
streams filled with ads, except for sports and a few awards shows.
The bundle is filled with all kinds of special interest content, offered with
multiple appointment dates and times. This stuff is much more desirable as a
VOD product, even with ads, or more appropriately, with a few highly targeted
ads based on KNOWING who is watching.
This is a technology change that is very meaningful to advertisers, who are
already moving large budgets to the Internet based on targeting. Google is
making big bucks doing this with their search engine, then mining the resulting
data.
Comcast is already doing this with the development of their VOD service. It is
HIGHLY likely that vMVPDs will only stream the live content, and offer the rest
as branded VOD portals. Instead of the Food Network channel, you will get the
Food Network OTT portal. This is an area that is ripe for new business models.
For example, the cost of the bundle might drop dramatically, while you would be
able to pay a premium for the channels you watch - without the ads. Or
advertisers might pay the "fee" for a program if you agree to watch a targeted
ad.
> Further down, they ask whether MVPDs can lure back cord cutters and cord
> nevers:
>
> "It turns out the answer is 'yes' but only if the 'cord never' generation is
> given freedom to choose their own programming. Ideally this choice is on a
> program-by-program basis, with the fallback to a channel-by-channel choice.
> In other words, extreme unbundling."
>
See above: as the saying goes, Want'n and getting are two different things.
> Yup. Hardly duplicating the MVPD model over the Internet. This next quote is
> about the economics of sticking with MVPD bundling, and how TVE (aka moving
> the bundle to the Internet) is not the answer.
Not the answer the author is looking for...
>
> "The economics behind this aren't even sound, as cord-cutting has siphoned
> off profits and a viewership drop at some MVPDs is accelerating based on the
> desire of many viewers to watch what they want when they want it. The whole
> concept of TV Everywhere is intriguing, but it still forces the potential
> MVPD customer to buy in bulk when they want to consume a targeted diet."
The statement is incorrect to begin with - cord cutting is NOT accelerating.
But viewing habits are, which is driving the growth of Netflix, and forcing
HBO, Showtime et al to follow.
The content owners will not take a pay cut. The tricky part is figuring out how
to sustain advertising revenues while getting people to pay more to eliminate
the ads.
> "Taking advantage of this rule, new OTTs may offer smaller or specialized
> packages of video programming, so consumers will be able to mix-and-match to
> suit their tastes. Aereo recently visited the Commission to make exactly
> this point - that updating the definition of an MVPD will provide consumers
> with new choices. And perhaps consumers will not be forced to pay for
> channels they never watch." Which ids followed up at the end of Tom Wheeler's
> blog with:
Reminiscent of the statements in the mid '90s when the FCC issued rules for the
unbundling of STBs required by the 1992 Cable Act and the 1995 DTV act.
>
>
> Is this "just speculation?" It may be brushed off that way, by those who
> prefer to wax eloquent only *after* everything has already happened.
Still waiting for it to happen...
Regards
Craig
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