[opendtv] Re: 20040510 Mark's Monday Memo

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Fri, 14 May 2004 09:35:32 -0400

At 4:34 PM -0400 5/11/04, Manfredi, Albert E wrote:
>
>I'm not sure I understand why this service would be different
>from ONdigital/ITV, for instance. But it seems to me that
>OTA broadcasters *on their own* could use this same strategy?

Good point. There is still a big question mark about the viability of 
a cut rate multi-channel service with limited content choice. It is 
not clear to me that the Jet Blue analogy holds in this case. For 
example, Jet Blue does not offer the same choice of "channels." If 
you want to go to New York City and Jet Blue serves a market near 
you, you can save a few bucks. IF you want to fly to a market they do 
not serve, however, too bad.

Clearly OTA broadcasters can pool spectrum to compete in the 
multi-channel business. The larger question is what will they need to 
offer in order to compete effectively, and at what price?

The only useful info we have to answer these questions today come 
from the UK and Germany, and they suggest that the big win is to 
offer a package of popular advertiser supported programming WITHOUT 
subscriber fees.

>
>Why couldn't an OTA broadcaster rent out part of its 6 MHz
>spectrum to "content providers" who view them "as a way to
>get distribution"? If USDTV can hope to make this work without
>even owning the transmission facilities, I'm just not clear
>why the OTA broadcaster couldn't do likewise, and for no
>subscription fee.

The rub here is the no subscription fee part. At NAB Emmis and other 
broadcasters announced their intention to pool spectrum for a 
multi-channel service with a wider choice of content than USDTV. And 
they announced the intention to charge subscription fees and to 
compensate broadcasters for their signals. My gut reaction is that 
this will not work, since the value proposition is not strong enough 
to convince people to switch from cable or DBS...but I reserve the 
right to be wrong.

Regards
Craig
 
 
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