[opendtv] Re: Thin Is In, But the Jury’s Still Out | Multichannel
- From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Thu, 13 Aug 2015 10:19:44 -0400
On Aug 12, 2015, at 8:36 PM, Manfredi, Albert E
<albert.e.manfredi@xxxxxxxxxx> wrote:
1. "Sling TV is technically an OTT service"
I have never seen anything published that says otherwise.
Of course it is. The exact quote:
Sling TV is technically an OTT service, but one of its most hyped selling
points is its flexible packaging — for $20 a month, customers can get 20 core
channels (including ESPN, TBS and TNT) and pay an extra $5 per month for mini
packages based on genres like sports, news & entertainment and movies.
Wiki says:
OTT in particular refers to content that arrives from a third party - such as
Hulu or Netflix - and is delivered to an end-user device, leaving the ISP
only the role of transporting IP packets.
So the key factor is delivery over the Internet without manipulation by the ISP.
But Wiki also says:
In broadcasting, over-the-top content (OTT) refers to delivery of audio,
video, and other media over the Internet without the involvement of a
multiple-system operator in the control or distribution of the content.
Looks like it is time for Wiki to update its definition, as Dish is definitely
a MSO (the DBS service and Sling), and it has control of the content and its
distribution.
So stop the drop Bert. The Internet supports Virtual MVPD services, and Sling
and Sony Vue are proof.
Definitions have a way of evolving as real world conditions change.
2. "Dish chairman and CEO Charlie Ergen said skinny bundles make more sense
with OTT services than traditional pay TV, mainly because of lower subscriber
acquisition costs (SAC)."
Nice that you picked up on that. Clearly this has been a big plus for Netflix.
If we are going to evolve to a more competitive marketplace, the fat has to be
removed somewhere.
Then although Rutledge says about bundles:
3. “'That’s not the way the world works,' he said, adding that he doesn’t
expect things to change anytime soon. 'My sense is that it isn’t all about to
fall apart and that we’ll be having this conversation three years from now,
because I think there is nothing to incent anyone to pull it apart.'”
And he is correct. The bundle is too important to abandon. We will see some
fine tuning and attempts to offer lower cost entry points, but bundles will
survive.
The incentive is,
4. "The Wall Street Journal had reported that ESPN was in a major
cost-cutting mode after shedding about 3.2 million subscribers in a little
more than 12 months, citing Nielsen figures. It partly attributed those
losses to ESPN’s inclusion in skinny packages and an overall pay TV decline."
The fact are, ESPN started losing customers BEFORE any Sling TV idea came to
fruition. If people were dropping ESPN from traditional MVPD subscriptions,
and flocking to Sling TV en masse, you would see that reflected in Sling TV
subscriptions.
Correct. Sling is not causing any waves in the pond...barely a ripple so far.
But there is economic pressure on MVPD pricing, and a big part of the reason is
channel bloat. As VOD replaces the need for many of these channels we will see
less bloat, and hopefully more choice in tuning a bundle to our viewing needs.
5. "Iger said last month that for ESPN, going direct-to-consumer like HBO Now
and others was probably 'inevitable,' but wouldn’t happen for at least five
years."
Well, going to an OTT site is the first step. Whether the second step takes
five years is to be seen. These things have been happening a whole lot faster
that the CEOs ever initially claimed.
I'll make a bet now that ESPN will not go direct to consumer in the next five
years, and if it does it will cost a bundle...
Regards
Craig
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