[opendtv] Re: Variety.com: Who Are the Winners and Losers in Pay TV’s Unbundled Future?
- From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Sun, 16 Nov 2014 19:36:29 -0500
>
> On Nov 14, 2014, at 8:29 PM, Manfredi, Albert E
> <albert.e.manfredi@xxxxxxxxxx> wrote:
>
> This very recent article continues to explain what the content owners, and
> even some MVPDs, are thinking.
Actually, it is almost as speculative as most of your posts Bert. Lots of "look
at all this smoke, there must be a fire here somewhere." But the overarching
theme is that people may buy different bundles, then again, they may not.
>
> This is an example of what I was saying, wrt the high cost of sports
> channels, although it's from the MVPDs' perspective rather than a content
> owners':
>
> "With content costs continuing to rise, particularly for sports, there have
> been early symptoms of the traditional TV bundle cracking. Dish has dropped
> several regional sports networks in recent years, and DirecTV refused to
> offer Time Warner Cable’s SportsNet LA, the cable home of the Dodgers, saying
> the cost outweighed the benefit."
>
> And consequently, these sports leagues are finding other ways to get their
> content out, e.g. direct to consumer.
Already addressed this one. There is significant activity building regional and
sport specific networks, both for cable and OTT. But most do not wind up in the
extended basic bundle, and the sports specific networks like NFL and MLB are
skimming cream. The NFL Network requires cable authentication and only carries
a handful of games. The MLB Network is a joint venture with the cable industry
and is available in 70 million cable homes.
>
> And this, in spite of, "Still, viewers who want a proprietary mix of sports
> in their channels — like the NFL or MLB networks or certain regional sports
> nets — may be among the reasons OTT offerings haven’t taken a stronger hold
> in the marketplace."
>
> Point being, even if many out there might be sports addicts who will pay any
> price, Dish and DirecTV do not assume that all of their customers, or
> potential customers, can be brow-beaten into paying up. Not anymore. They get
> the trend line, and THEY are breaking up "the bundle."
How bizzare.
The author points to the fact that sports nuts can get these add on services to
their MVPD packages as a reason OTT offerings haven't taken hold - in essence
these customers will pay the MVPD more, so they do not need to put this stuff
in the extended basic bundle, and the sports nuts do not need to subscribe to
an add on OTT service.
This is not breaking up the bundle - it is selling a higher tier.
>
>
> "The approach is to deliver a full TV lineup that rivals cable or satellite,
> delivered to its array of connected devices. The company could price its
> package more attractively than similar bundles, by either subsidizing the
> content or accepting lower margins. After all, the consumer electronics giant
> is more interested in selling Bravia HDTVs and PlayStations than it is in
> minting coin on pay television."
Nice, but pure speculation. Since this article was written Sony has announced
the service, and it is NOT priced attractively. Then you ignore his next
paragraph:
>> But despite the Sony service’s reportedly snazzy features (it has a “really
>> elegant consumer interface,” according to Viacom topper Philippe Dauman)
>> skeptics wonder how much demand it can attract. “There isn’t a big number of
>> people who will suddenly pay full price for the bundle because it’s now
>> coming through the PlayStation,” said Guggenheim Partners analyst Michael
>> Morris.
>
>
> Exactly the same as having multiple supermarkets in town. As opposed to only
> one supermarket within reasonable reach. Although again, these are still
> middlemen that have to do what the content owners will allow, rather than
> content owners seeking out new models on their own. So, ...
Yup. Just another expensive virtual MVPD.
>
> THESE are the two important take-aways:
>
> 1. "Ultimately, the next great leap forward for pay-TV distributors might not
> be in re-creating the bundle for the Internet. DirecTV and AT&T, the latter
> of which is in the process of acquiring the satcaster, don’t see promise in
> putting old wine in new bottles. Rather, they see the next big wave of video
> entertainment services geared around niche-oriented content subscription.
The same companies that thought people would sign up for another monthly
subscription to watch TV on their cell phones. The paragraph is pure
speculation.
> Or said another way, the same-old bundle model with a new transmission
> protocol is not the answer. And,
And DSL is not the answer for broadband. The telcos are mostly clueless, but
they enjoy the financial benefits of operating an oligopoly under Title II
regulation.
I have already stated that simply moving all of the network streams to the
Internet to create a virtual MVPD is not the answer. People do not want to make
appointment to watch most of this stuff, they want to watch pre-produced
content on demand.
Comcast has already addressed this with their Cable/OTT VOD service. Cox and
Time Warner are building similar services. But this does not mean that the
bundle is threatened. It does mean that everyone is adapting to changing
distribution technologies.
Broadcasters are finally letting go of tape based acquisition and playback gear
and moving to solid state storage and networked servers. The MVPDs will adapt
to VOD as it replaces appointment TV.
>
> 2. "What’s different this time around, after years of fretting about the
> looming specter of people abandoning the bundle? Said analyst Craig Moffett,
> 'The content companies are no longer part of a united front trying to
> forestall OTT substitution.'”
Correct! They are now becoming a united front attempting to control this
technology shift, and using it to create new niche services to exploit their
content libraries.
>
> Today's mindset is not the same as 5 years ago. The content owners are the
> ones that matter most, in effecting these changes, and they aren't swearing
> allegiance to the old way.
>
Yup, they always have been the ones who matter most - people don't watch
distribution, they watch content. Remember when CATV companies had a channel
with a camera pointed at some weather gauges? It was replaced by the Weather
Channel, which is now being replaced by n App.
Regards
Craig
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