[opendtv] Re: TVTechnology: Viaccess-Orca: 20 Million Watched World Cup on Illegal Streams
- From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Thu, 7 Aug 2014 08:53:29 -0400
On Aug 6, 2014, at 8:12 PM, "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
wrote:
> Not necessarily. Some people will pay for Netflix, or Hulu Plus, but they
> won't get snared into the MVPD racket.
Sorry Bert, but piracy is piracy - someone is stealing something they are not
willing to pay for, or perhaps because it is not available to them at all.
Arguing that someone will pay for Netflix or Hulu Plus, but will not pay for a
MVPD bundle I has nothing to do with piracy. It is simply a consumer choice.
>
>> Wake up call? It's the business model Bert.
>
> It's a business model that won't last, Craig. Think back at your years-long
> resistance to the idea that HDTV was always meant for the masses. The same
> phenomenon is occurring on this topic. As technology changes, business models
> change. Younger people are showing signs of being able to "say no." That's
> why there's so much pirating going on.
Nothing lasts forever. HDTV became a mass medium because the technology
progressed rapidly and the cost became reasonable. It is a bit ironic that the
companies that made this happen had two business models in the game, only one
of which could endure.
The professional side of the big CE companies ("broadcast divisions"), saw HDTV
as a lucrative high end market with major barriers to entry - they expected it
to take decades for the cost of HD production to become affordable. They
misjudged the impact of Moore's Law and the fact that most of the needed
infrastructure would be driven by the IT industry rather than small specialty
manufacturers focused on the high end.
At the same time the consumer side of these companies behaved as these
companies always have - they rushed to mass produce "lithographed displays,"
and recreated the old TV market where margins are razor thin. Again, Moore's a
Law made the rapid decline in the cost of flat panel displays possible.
What you are failing to understand, or at least to consider, is the fact that
the TV content industry is NOT driven by technology - if anything, technology
has helped them to lower production costs from a technology perspective. The
cost of content has rarely been driven by the cost of the underlying
technology; it is driven by the cost of the creative process and talent, which
in turn is fueled by the massive market size of people willing to pay to be
entertained. Thus we have "stars" making millions, whether they are making TV
shows and movies of scoring touchdowns.
By controlling distribution, the content oligopoly has largely prevented
technology from eating their lunch. Instead, they have a proven track record of
using technology to make more money. The play book is well known:
1. Paint each new technology as a threat that will kill the entertainment
industry - run to the politicians and the courts to seek protection and slow
each new threat down.
2. Accept the technology and use it to enhance the existing distribution models.
3. Protect the most valuable content and use it to "legally" tie consumers into
content packages they would otherwise not pay for. (i.e. Bundling).
This was true for BetaMax and VHS. It was true for DVD. And it is happening
again with IPTV distribution.
> I should have been more direct, then. Craig, you said it exactly backwards.
> Content owners DO NOT insist on authentication IN ORDER TO protect the MVPDs,
> which is what you said (go back and check!). Content owners are still using
> the MVPD model IN ORDER TO obtain that authentication they want. See the
> difference? There are other models out there for authentication, Craig, and
> the content owners ARE using them. Not enough perhaps, but wait and see.
Twisted!
All paid IPTV distribution requires authentication. You need it for Netflix,
Hulu Plus, Amazon Prime, Apple TV, et al. Using authentication (i.e. proof you
are paying for the bundle) to gain access to the streaming versions of content
in the bundle, keeps consumers inside the garden, and enhances the perceived
value of the bundle.
It is absolutely clear that the content owners are controlling the migration to
IPTV distribution in a manner that will protect the bundle. I will repeat this
for emphasis:
3. Protect the most valuable content and use it to "legally" tie consumers into
content packages they would otherwise not pay for. (i.e. Bundling).
> How many times have we been around this circle?
It is not a circle. You simply choose to ignore reality...
And keep making the same circular arguments.
Regards
Craig
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