[opendtv] Re: The rationale for retrans consent from local broadcasters

  • From: Craig Birkmaier <brewmastercraig@xxxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Fri, 09 Oct 2015 10:31:59 -0400

On Oct 8, 2015, at 9:53 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx>
wrote:


ATSC 1.0 is more spectrally efficient than DVB-T1 **as DVB-T1 is actually
deployed** (i.e. to have DVB-T1 achieve acceptable robustness), and I pointed
this out countless times, with sources.

Spectral efficiency is only one way to measure the effectiveness of a broadcast
service...

What difference does it make?

If people don't use the service it is meaningless.

ATSC 1.0 offers a freeview service too, call it whatever you like.

Actually, USDTV tried to offer a low cost multi-channel service in a few of the
LEAST CHALLENGING markets in term of ease of reception. You might even say it
was the first "skinny bundle" offer in the U.S.

But the service got no traction and was shut down. I won't even argue it was
due to the limitations of the ATSC standard. It failed because it did not offer
the sources people wanted from a MVPD service, just as Sling is limping along
because it is not currently a viable alternative to the extended basic bundle.

And the bottom line is, I can receive my ~50 channels with antenna in
fireplace, ground floor, no rotor, where most channels by far come with
double edge refraction (according to TV Fool), at ranges from 12 to 46 miles.

Your ~50 channels is an illusion. You just happen to live between several major
markets; half of what you can receive duplicates the other half, and most of
the sub channels do not carry high value content that even you are interested
in.

You CHOOSE not to pay for the content that 80% of U.S. homes subscribe to,
INCLUDING Millennials with children. Even you appear to have largely abandoned
your antenna and DVR, choosing instead to watch the table scraps offered by
free OTT streaming services.

None are LOS. Whereas my sister needs an outdoor antenna on top of the
building, with LOS, at much shorter range, with DVB-T1. Even though her
windows do point in the right direction, I should add. Yes, no doubt, ERP is
a big part of this. But you are very simply overstating this tired old point.
I have to repeat again and again that the norm in DVB-T countries is to have
the antenna professionally installed, otherwise, very often, it doesn't work
either. The norm here, for OTA reception, is that the homeo
wner is on his own. And worse, apartment dwellers usually don't even have a
building antenna system at all. So please don't cycle back to ca. 2000. We've
been over this too many times.

Which explains why more than 80% of U.S. homes don't bother with an antenna. In
the U.K. about 50% of homes use the Freeview or Freesat services, but they
offer a viable alternative to the paid services.

The point is that content, not technology drives this stuff. The U.S.
Broadcasters decided to punt on the technology and go where the eyeballs are,
and why not? They get a second revenue stream from the MVPDs.

With the consolidation of channels that is starting to take place in the MVPD
industry, it would certainly be feasible to deliver a viable broadcast skinny
bundle in the U.S. today that could be received reliably on both fixed and
mobile receivers. But the question remain...

What difference would it make?

I already have this capability on the fixed and mobile screens I own, and
anywhere access with the wired and wireless broadband services I pay for.

You're getting off on a tangent. When more competition emerges, as it has,
even the bloated star power programs have to regulate themselves, Craig. It's
only competition that provides the regulation mechanism, in our economy. So
for example, this article you posted:

http://www.fool.com/investing/general/2014/10/06/netflix-inc-is-paying-huge-sums-to-produce-origina.aspx

Did you read it?

"So let's bid farewell to that simple back-of-the-envelope estimate. Most of
Netflix's original shows must come with far smaller budgets than those of
Orange Is the New Black or House of Cards."

Duh.

The author went on to say this approach to figuring out what Netflix is paying
for its original content is not useful or accurate. What is useful and accurate
is the graph I provided the link to, that shows that Netflix is paying twice as
much as any other service for original content, including HBO.

Yes the price of each show will vary, based in large part on the star power
they are paying for. And successful shows typically have huge cost increases
when they are renewed, whether it is for a broadcast network or Netflix.

"After all, exclusive content sets Netflix and archrival HBO apart from the
commodity players in the entertainment market."

Exactly. Channels that rely on licensing older content and offer nothing to
attract subscribers will not survive this technology shift.

So some productions cost more than others, but they *all* generate
competition against the incumbents. Even "commodity players" generate this
competition. For example, surely you didn't miss Monty's post yesterday?

http://www.nytimes.com/2015/10/07/business/media/doubts-circle-viacom-vanguard-of-yesteryear.html?_r=0

How about the NY Times articles that Monty posted: Watching For the Programming
Apocalypse and Wasteland to Wonderland?

We are awash in content today. Far more than anyone can reasonably watch. These
articles suggest that the market cannot support the number of original shows
currently being produced. But this is not going to drive the costs down. It
will drive the cost for the most successful shows UP.

"Now, Viacom has lost its perch amid the explosion of competition from
traditional and digital outlets, like Netflix, Snapchat, YouTube, Twitter,
Vine and Facebook."

This is certainly true for MTV, which rode a technology wave to success, then
wiped-out. It's the same story you tell all the time. Why watch a video juke
box when you can access the music videos you like on demand, and discover new
stuff via your social networks. And then there is the general concern that MTV
has raced to the bottom in terms of sleaze, as was abundantly evident to the
declining audience for their video music awards show.

Likewise, Nickelodeon is suffering a bit at the hands of Netflix, which has
bulked up on kids shows.

Yet, Sumner Redstone has now developed something rare for us old farts...

Patience!

The article pointed out that things have stabilized and Viacom is still making
lots of money, something Netflix and Amazon cannot say.

"Another concern is that the massive wave of consolidation sweeping across
cable and satellite companies will greatly reduce the rates Viacom can charge
for its programming and even creates the potential that cable or satellite
companies like Dish could drop Viacom from their bundle of channels, since
its programming is now available on a range of streaming services like Amazon
and Hulu."

Could happen. I certainly am not looking for their channels in the skinny
bundle I will buy when a package with the stuff I watch becomes available. I
don't watch much of what is available on the broadcast networks either, other
than live sports. Or many of the library shows on Netflix.

Did you get this last bit? We read an article months ago, or maybe a year
ago, that explained how this phenomenon would unfold. This is the feedback
mechanism, now able to operate to self-regulate this machine, where
previously it could not. Even ESPN is having to trim its budget, Craig.

Yes, we have discussed the changing landscape Bert. I can't count the number of
times I have said that channels filled with reruns are going to die, replaced
by SVOD services. And ESPN is trimming budgets because it got too fat on
subscribers fees and was paying too much for jocks reading teleprompters on
Sports Center.

But ESPN is still a cash cow, and the rest of the content congloms are building
sports networks to compete with ESPN. That is not a sign of a dying market; it
is a sign of a growing market dominated by the the pioneer who now is facing
some real competition. And I'm not talking about competition from the Internet.

Come now Craig. You don't need to rehash, imprecisely, what I have covered
with direct sources many, many times. When a conflict of interest exists,
given the opportunity, companies will always respond in ways that benefit
them first and the customer second. These same companies have done so in the
past, and it became clear that this is where they were heading again.

But that only happened in your head Bert. There was very little evidence to
support what you are saying, and it was clear that net neutrality was happening
without direct government intervention.

Why are Comcast and Time Warner running ads making fun of their poor consumer
satisfaction ratings? There is more than adequate pressure on them to behave
responsibly. The LAST thing we need if for the government to entrench their
broadband monopoly.

Of course, the last mile pipe has to be neutral. And in spite of your
libertarian-sounding rhetoric, **if** we had adequate competition in that
last mile connection, for example with wireless, **then** the Title II
classification would not be as essential. Because simply, people would drop
any networks that forced its own equipment on their customers, and/or that
blocked content that was in competition with their own. That's why Title II
is critical now.

We won't get adequate competition with Title II regulation, or at a minimum it
will be delayed for years.

Thank you for agreeing that consumers DO have a say in this...

Regards
Craig

Bert



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