[opendtv] Re: TV Technology: Broadcasters Seek Expanded Marketplace Definition With Rise of Digital
- From: "Craig Birkmaier" <dmarc-noreply@xxxxxxxxxxxxx> (Redacted sender "brewmastercraig" for DMARC)
- To: opendtv@xxxxxxxxxxxxx
- Date: Tue, 7 May 2019 07:07:06 -0400
On May 6, 2019, at 11:57 PM, Manfredi (US), Albert E
<albert.e.manfredi@xxxxxxxxxx> wrote:
Why are they bitching at DOJ? Because of anti-trust, that is apparently
preventing the merging of some local stations. But limitations being placed
on broadcasters by the DOJ can only exist to the extent that broadcasters see
themselves limited by their OTA coverage. The longer view is not to tackle
the Internet competition by attempting to tweak legacy technologies, such as
OTA broadcast and MVPD dependency. But rather, join the competition, since
you can't beat them. If the Internet competition's ads reach more people, get
on the Internet. The networks already are, so broadcasters have to carve out
a useful role on this Internet. That has more to do with the TV networks,
than with the DOJ, no?
Bert may have a point here, although I would point out that the broadcast
networks ARE NOT available via the Internet (with few exceptions like the Super
bowl). The reality is that many network shows are now available on a delayed
basis, complete with “digital ads.”
I would also note that radio broadcasters are now widely available on the
Internet. I listen to our local talk station via Radio.com frequently via my
iPhone and AirPods, complete with “digital ads” that are different than those
inserted via the OTA broadcasts.
The problem IS with the broadcast TV networks, as they will not give affiliates
permission to stream the programming that they broadcast. In some cases this
is the networks, while in other cases it is related to the contracts between
the networks and the content provider - e.g. NFL Football. The NFL operates
under an anti-trust exemption, which allows them to control where the
broadcasts are available.
That being said, some of the networks are allowing VMVPDs to stream their
content. I have access to our local Fox and CBS stations via DirecTV Now. I
often stream content from DirecTV Now through my iPhone.
This may be related to retransmission consent. Those local stations on DirecTV
Now are being compensated for their signals. If a TV station were to stream its
content for free it would not be able to protect that second revenue stream.
"DOJ has the same view of the broadcast TV marketplace today as it did in the
1970s, 80s and 90s," said Rick Kaplan, NAB executive vice president of Legal
and Regulatory Affairs, in his testimony. "Never mind that cable and
satellite providers now offer hundreds of channels of high-quality content.
Never mind that the internet has thoroughly upended the way consumers access
and engage with video offerings."
So if we are to try to understand what Rick Kaplan and the NAB are asking for,
it sounds all like they want to allow every ABC or NBC affiliate in the nation
stream their programming on the Internet, complete with digital ads inserted
for distant viewers.
Obviously a local broadcaster cannot offer hundreds of channels of content.
Should we allow a broadcaster to build a multi-channel streaming service
delivered via the Internet? Near as I can tell, there is nothing to stop them
from doing this now...
If they can buy the rights for the programming.
Bert continues:
That's not fair criticism. Plus, the broadcasters are just as guilty of 1970s
thinking.
Gotta agree with Bert again...
TV Broadcasting in the U.S. was designed as a market based service with limited
local competition. Before cable and satellite broadcast TV was an oligopoly.
Sorry guys, but this is what competition does to monopolies.
Messing with local ownership caps, as THE way to compete against Internet
media, betting on a second retrans consent revenue stream, is SO retro
thinking. It exploits a legacy-thinking "pretend game" that broadcasters
produce and own the high value content they transmit, it makes apologies for
the restrictions of OTA coverage and capacity, and it assumes that this
legacy MVPD model workaround is even viable, long term. Reality is, cord
cutting is still accelerating. This is not the solution.
Then Bert drives this discussion into the ditch.
The ownership caps were created to prevent a few companies from dominating TV
broadcasting. That didn’t work. The networks tolerate the fact that they can
only reach about half of the nation directly, and must use affiliates to reach
the other half.
The reason the networks are dominant is s that the affiliates have very limited
rights to the content they broadcast...
And NO streaming rights. The networks cannot offer live streams to bypass the
live local broadcasts; but they can offer this content on a delayed (on demand)
basis, while affiliates cannot.
As for MVPDs, the workaround model already exists. I use it every day. The only
issue here is working out the carriage contracts for local stations with the
Virtual MVPD services - Dish Sling, Hulu, DirecTV Now, Sony PSVue, et al.
There is nothing to stop a TV station group from getting into the MVPD
business...
Sinclair just bought the 21 former Fox Regional Sports Networks from Disney.
Sinclair is now a content owner that supplies programming to legacy MVPDs in
these 21 markets. If they so choose, they can use these networks to build a
VMVPD service.
Bert continues to believe that MVPD services are going to die because of the
Internet. Obviously this is absurd, as most of the cord cutters are subscribing
to a range of TV content delivered via the Internet, INCLUDING MVPD bundles.
"Kaplan argues that the DOJ's reasoning for not updating the reach that
broadcasters have is no longer adequate."
The DOJ cannot limit the reach broadcasters have. Maybe the TV networks might
be doing that, by limiting broadcasters' steaming rights. The DOJ is only
concerned about competition in a strictly legacy scenario: when local
broadcasters use the publically-owned OTA spectrum in a given market.
It is less than clear whether the DOJ or the FCC can limit the reach of a
broadcaster. It depends on the type of legal complaint that is in play.
The FCC created rules to prevent broadcasters from buying their way onto out of
market MVPD systems. Near as I can tell, VMVPDs are not allowed to carry out of
market stations - I presume this is enforced by some form of geo-fencing
related to the location of the digital device receiving the stream. To be
honest, I have not tried to watch the local stations I have access to when I am
outside of their broadcast coverage areas.
The DOJ can limit reach in a number of ways related to the FCC ownership caps
and general anti-trust law. Thus the DOJ is involved in most large TV media
ownership transactions, and can force divestiture as they did with Disney in
the recent deals to buy up Fox media assets.
With "the rise of digital," and here they really mean "the Internet,"
broadcasters now have a potential for global coverage. No need to ask the DOJ
or FCC for anything.
Anyone can have global coverage via an Internet server.
The issue is obtaining the rights to stream content globally, and the ability
to monetize the effort. A local TV broadcaster can stream its newscasts, but is
this a viable business?
Can they attract a significant audience with these streams and charge enough
for digital ads to cover the cost of operating the service?
Regards
Craig
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