[opendtv] Re: What a coincidence: Can TV Broadcasters Really Go OTT?

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Wed, 17 Jul 2013 12:22:42 -0400

On Jul 16, 2013, at 5:18 PM, "Manfredi, Albert E" 
<albert.e.manfredi@xxxxxxxxxx> wrote:

> The price I was suggesting, $0.50 per month, was based on roughly what ABC is 
> getting now from MVPD subscribers. I don't know the exact amount, but 
> certainly we have seen a lot of articles recently about how Fox, or CBS, or 
> any number of the others, are NOT making as much as cable channels get. And 
> most recently that CBS was NOT getting close to $1.00 per month per 
> subscriber.
> So, $0.50 per month is a guesstimate, and ought to be in the right ballpark. 
> I'm saying, at most they would have to ask for that much over and above the 
> ads, for *live* online viewing, from *non-MVPD subscribers*. I very much 
> doubt that the congloms are thinking only along the lines that you posit in 
> this interchange:

On the surface, your logic seems impeccable. But you are ignoring one 
significant point.

Every channel germs the specified subscriber fee for EVERY MVPD subscriber that 
pays for the bundle, which is  the vast majority. You may not watch sports but 
you still pay for ESPN. You may not watch HGTV but you still pay for it.

I would love to reduce my cable bill by NOT PAYING for all the channels that I 
do not watch. Sorry, I'm SOL.

If everyone pays a little, the price tends to be lower. IF you can choose NOT 
to pay, then the content owner either gets less money, or needs to raise the 
price to compensate. This is the classic argument used by the content owners 
and the MVPDs to justify the bundles - if you get to pick and choose, the 
prices will go up for the channels you want.

I may be one of those suckers who pay for an MVPD service, but my position is 
still the same as I stated yesterday. IF the program is full of ads, I should 
NOT need to pay a subscriber fee at all. 

Logic suggests that if a network allows FOTA access to their content - then 
they should allow FOTI access as well. To a limited extent they do this today 
on a delayed VOD basis via their websites. But logic is not a word that is 
often used to describe the actions of monopolists.

> I don't buy it, because it makes absolutely no sense FOR THE CONGLOMS. They 
> stand to lose revenues with such a silly strategy. My guess is that this is 
> just a quick and dirty mechanism they're toying with initially. On the 
> surface, it looks like a desperate attempt at keeping that stagecoach route 
> operating, after the railroad is built. Plus, as everyone knows by now, the 
> networks are offering their FOTA content FOTI, on demand, next day. So this 
> MVPD subscription requirement for online viewing does not seem like any long 
> term strategy to me.

Keep hoping Bert...

>> Who is making the case that ads should be sufficient to pay for a
>> program?
> "Should be"? Nothing "should" about it, Craig. Ads *are* sufficient, or FOTA 
> would have died long ago.

They still are in Great Britain and many countries around the world. This is a 
classic case of special interests gaming the system to their advantage. It is 
what happens when industries and politicians work together to game the system.


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