[opendtv] Re: Weak Q3 for Cablevision | Multichannel
- From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Sun, 9 Nov 2014 08:56:29 -0500
On Nov 7, 2014, at 9:40 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx>
wrote:
> Declining sales are not the same as declining market share, Craig. If your
> market share declines, but your sales increase, you can still be experience
> growth. But if your sales decrease, classifying this as merely "decreasing
> market share" amounts to obfuscation.
>
> In the article you posted,
>
> http://www.multichannel.com/news/news-articles/weak-q3-cablevision/385344
>
> which is copied below, THIS is the paragraph you need to read:
>
> "'Faced with falling subscriber numbers, Cablevision is left with but one
> lever to pull to sustain growth: they are aggressively raising broadband
> prices,' Moffett wrote. That is a strategy that supports near -term cash flow
> growth, but 'exacerbates the longer term vicious cycle of falling subscribers
> and, as scale is lost, further margin declines,' Moffett added."
Who says the MVPDs need to sustain growth? They are just the middlemen, who are
willingly working with the content owners to sustain two lucrative oligopolies.
It should be obvious why there is so much consolidation in the MVPD industry.
The real value is in their networks and the cash flow that is generated selling
their network services. They do not need growth to be highly profitable, just a
sustaining relationship with consumers who have no other choice for critical
services like broadband. If the FCC chooses Title II regulation, the Cable
systems will have a lock on profitability with no end in sight.
The telcos have seen declines in their business, first from the death of the
long distance price gouging, then from the transition from land lines to
cellular. They are still managing a huge cash flow business.
The content congloms have seen massive declines in viewership for the flagship
networks; broadcasting is a shadow of its former self, except in one area -
cash flow generation from declining advertising AND growing retrans consent
fees.
There is no evidence that the content conglomerates are going to kill the goose
that lays the golden eggs and try to go it alone to sell their package of
networks. There IS evidence that the Internet is providing new opportunities to
sell access to their conten .
>
>
> They are trying to put the best face on this, saying that the remaining
> customers will be more loyal and more stable, but you watch them aggressively
> pressuring the congloms to allow them more flexibility, offering more of an
> OTT formula for TV content. Remember that article with the Charter CEO? That
> was his approach too!
It is a very interesting time to watch "the dance." Just remember, these folks
are monopolists at heart!
Regards
Craig
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