[opendtv] Re: =?windows-1252?Q?NCTA:_“Netflix_is_beating_cable”?Message-Id: <4BCFB0CA-F390-4144-A4C1-F50BF3F230AC@xxxxxxxxx>
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Wed, 15 May 2013 09:53:47 -0400
On May 14, 2013, at 6:58 PM, "Manfredi, Albert E"
<albert.e.manfredi@xxxxxxxxxx> wrote:
> Craig Birkmaier wrote:
>
> http://advanced-television.com/2013/05/13/ncta-netflix-is-beating-cable/
>
> So Craig, are you going to revise what you wrote wrt your ideas that networks
> will take everyting off OTA and Intenret, and force everyone to last-century
> MVPD distribution?
No, not at all.
In fact I would suggest that this is going to happen much sooner that I
expected.
Netflix has become too popular, despite the fact that they only offer access to
older libraries of movies and TV shows. Several of the media congloms have
already announced that when their current Netflix contract expires they will
either choose not to renew at all, or they will be looking for very large rate
increases, which in turn will force Netflix to raise prices. THey have the
market power to either strangle Netflix, or to use Netflix to make even more
money.
Clearly, the MVPDs are the cornerstone of the media conglom strategy. There are
now 100 million U.S. homes subscribing to an MVPD service; 17 million who do
not, and 25 million that SUBSCRIBE to Netflix. As you saw yesterday with the
ABC streaming announcement, an MVPD subscription is the key to accessing high
value content on new second screens.
Since you love to watch streaming video, please watch this news clip about Fox
and Aereo
There is an interesting twist at the end, suggesting that cable companies could
use Aereo antenna technology to bypass retrains consent fees.
This is almost laughable. The media congloms and the MVPD conglom are tightly
coupled at the hip. They have us right where they want us, and have no
intention of killing this cash cow.
The real problem with Aereo is that the content they offer is now just a small
fraction of what people actually watch; less than 40% during prime time, and
barely measurable the rest of the time. And with major live sporting events
fleeing to the MVPDs this situation is only going to get worse.
> I don’t understand how these articles keep appearing, and you keep ignoring
> them.
Because these stories do not take into account the reality that the congloms
are letting this happen, but will control anything that threatens them.
Remember, Netflix is paying them billions for this "library content."
How Much Does Netflix Spend On Streaming Content?!?
You argue all the time against paying for any subscription TV service. So why
are you pointing to Nextflix as an example of how streaming is going to set us
free from subscription bundles.
Netflix started as an alternative to Blockbuster; the movie rental business
that expanded to include rentals of complete seasons of off network TV shows.
This was just "easy money" for the congloms, part of the downstream food chain
that allows thm to keep making money off of the content that they create. The
Netflix streaming service is nothing more than an update in technology - why
send physical discs through the mail when we can charge 25 million people $7.99
a month to run the service from Internet servers. Do the math Bert.
25 million subscribers X $7.99/mo X 12 months = $2.4 billion per year, almost
all of which goes back to the media congloms.
These companies could care less about HOW you access their content. They just
want to control how you access this content and make certain that they can
maximize their revenues. Are you so naive to believe that they are going to
leave even a penny on the table?
Regards
Craig
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