[opendtv] Re: Who Killed the Great American Cable-TV Bundle?
- From: "Craig Birkmaier" <dmarc-noreply@xxxxxxxxxxxxx> (Redacted sender "brewmastercraig" for DMARC)
- To: opendtv@xxxxxxxxxxxxx
- Date: Mon, 13 Aug 2018 07:54:20 -0400
On Aug 13, 2018, at 2:39 AM, Albert Manfredi <albert.e.manfredi@xxxxxxxxxxx>
wrote:
Monty Solomon posted:
https://www.bloomberg.com/news/features/2018-08-08/who-killed-the-great-american-cable-tv-bundle
Competition and greed. Totally predictable, when multiple competitive portals
become available to distribute content, as opposed to the single monopoly
pipe. Pundits had said as much years ago. It’s not even a question of
“accomplices.” The reality is, consumers gave them no choice.
Sorry Bert, but the history of television in the U.S. is the story of an
industry propped up by the political class, allowing them to operate a
protected oligopoly for most of the 20th Century.
What was broadcast television Bert?
Certainly not the kind of robust competition you often cite in terms of most
consumer goods, like groceries...
From the first television broadcast until the birth of cable and packaged media
after 1980, television was anything but competitive. It was three commercial
voices, and a public voice, acting as one to shape our culture.
I am not defending what happened with the cable bundle, but it was entirely
predictable. The politicians gave the broadcast oligopoly “the keys to the
kingdom” in 1992 in a classic example of “The Law of Unintended Consequences.”
In less than a decade, four companies took control of the bundle, causing rates
to increase even faster than they did prior to the 1992 RE-REGULATION of cable.
This is yet another example of the failed political experiment with “Natural
Monopolies, which in reality turned out to be massive regulatory boondoggles
that have caused Americans to pay monopoly rates for many of life’s
essentials...
TV is not essential, but it is a drug that few can say no to.
And the FCC is not essential - it was the tool created by the politicians to
maintain control over the “Natural” communications oligopolies.
Bert wants to return to the good old days, where the FCC decides winners and
losers, and when new technologies can emerge. I have no problem with the
current FCC leadership; but I want to get rid of the Chairmen and his
henchmen...
Permanently!
It’s time to shut the FCC down.
(Of course, our FCC Chairman is trying to change all that, by taking consumer
choice away. His “new business models.”)
???????
And, Netflix Schmetflix. If it hadn’t been Netflix, it would have been Hulu,
Sony Vue, or someone else. Why is it so hard to get? Replace a monopoly pipe
with multiple sources on the neutral telecoms, and it’s a whole new game.
It says the networks are taking the shows back from Netflix and setting up
their own OTT sites. Exactly!! It’s still not back to 40 years ago.
This article did an excellent job of explaining how we got here, and YES, GREED
was a significant factor. The oligopoly, which grew to five companies by the
turn of the century, failed to understand that the “mass media funnel” could be
used to build a competitive platform using the same legacy “reruns” they used
to keep bloating the bundle to raise prices every year.
Definition: Mass Media Funnel - the ability to print money by creating mass
audiences who pay for entertainment; the money can flow from advertising, or
directly from consumers in the form of subscriptions.
As is often the case in stories like this, it is protectionism that ultimately
brings entrenched industries down. While technology made commercial free binge
watching a viable reality, it was a fundamental change in how we can watch
serialized TV programming that caused the bundle to unravel. In a flash,
appointment TV was replaced with TV anytime, anywhere, with an entire series
made accessible on day one, rather that dribbled out a week at a time.
As the article points out, the oligopoly almost figured it out with TV
Everywhere - but it was too little, too late. They had already made the fatal
mistake, licensing their libraries to Netflix. The fatal flaw was the
assumption that they controlled the ability to create high value TV content;
turns out that Netflix re-invested the cash flow generated by subscriptions to
create new content...
Whoops!
Once again, Bert get’s it completely wrong. Sony was a wannabe creature of the
oligopoly, as was Hulu and Dish Sling. They evolved their business models in
response to Netflix - especially Hulu. But the slim bundles are just an attempt
to sustain the lucrative subscription bundles and prop up those who are
heavily exposed like Disney/ESPN.
The article notes that the cable/DBS companies have lost about 5 million homes
due to cord cutting. Then it goes on to tell us that 6 million homes are now
subscribing to a slimmed down bundle. This is EXACTLY what I predicted would
happen several years ago, WHEN the Internet had evolved to the point where it
could support the massive shift from dedicated MVPD infrastructures to
streaming.
I also predicted what is happening - that once the new price points were
established for VMVPD services, they would ratchet them up every year as they
did with the MVPD bundles.
Ironically, the promise of TV Everywhere has been realized, not by the legacy
MVPDs that created the concept, but rather by the Virtual MVPDs, that created
the reality. I can now watch/listen to the content that I pay for each month at
home, on my mobile devices, and while driving in our vehicles.
It says the MVPDs are just raising prices to keep the legacy MVPD model and
income stream going.. Exactly why cord cutting is accelerating still!
This is just a classic example of how to flatten out the end-of-life curve for
a dying industry. Milk it for all its worth...
THe only thing the article failed to address is the reality that we are not
witnessing “cord cutting,” but rather cord switching, typically to more than
one bundle.
The Internet gradually gained in performance, to where it can now carry TV
streams. So, just as Vint Cerf said years ago during an IETF meeting, as soon
as Internet performance becomes adequate to carry a new type of service, the
Internet becomes the dominant medium for that service. This is now unfolding
for TV. No need to point fingers at individuals, as if it’s someone’s
“fault.” It was bound to happen, one way or another.
Well, until the FCC became corrupt. Luckily, the tenure of corrupt officials
is limited too.
I would love to see your source for this supposed quote from “Vint Cerf.”
Funny, I cannot find it.
Maybe because he did not have the vision you suggest. Funny, but the Internet
is fully capable of replacing traditional telephone service, but it has not.
Instead cellular telephony has replaced the traditional land line, and is now
on of the primary on-ramps to the Internet. And the cable guys, who built the
private networks to deliver those massive TV bundles, have enabled the increase
in Internet performance that has enabled the bundles that now compete with
their legacy service.
At lest you got it part right - the IETF has done a great job creating the
standards that have allowed Cerf’s Internet to evolve from a simple messaging
service into the information highways we travel today.
Regards
Craig
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