[opendtv] A competitive marketplace
- From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Fri, 7 Aug 2015 01:59:44 +0000
People are already dropping these legacy bundles from these walled gardens,
Craig. You argue from the point of view that everything remains static. People
are dropping out of this old model, and whoever offers them something more
appealing will gain those customers. And, importantly, the customers can come
from anywhere, in the US at least.
Craig wrote:
But these folks are likely looking for lower cost options that are
not as profitable
Welcome to the competitive marketplace.
2. A national provider may be able to shift some customers from
another service, just as DBS was able to shift about 35% of the
market from cable.
Not much like that, in fact. DBS offered the same walled-in formula as cable.
What will happen is that as people cut or shave the old school walled garden
services, which they have been doing already, have been for a couple of years
at least, they will replace these with what appeals most to them.
To do this they would likely have to reduce prices, which in turn
would reduce profitability.
Welcome to the competitive marketplace. Honestly, Craig, how do you not know
this already?
The missing element here is the shift to providing Broadband,
an area where the geographically restricted MVPDs are growing
rapidly.
But **not** as "restricted MVPDs." They are growing rapidly as neutral-mandated
Internet infrastructure service providers.
Any provider may be able to sell a "service" nationally, like a
TV bundle, but the broadband provider has a strategic advantage
with the ability to bundle multiple services.
No strategic advantage. In fact, the broadband pipe has to be neutral. So
there's no reason to believe (a) that the broadband provider can formulate and
sell TV bundles more competitively than any number of OTT sites out there,
**and** (b) no reason to believe that the broadband provider will restrict his
marketplace to just that local area.
Why the legacy thinking, Craig? What makes you think that Comcast will only
offer TV bundles to people physically connected to their own coax ONLY? Why
wouldn't Comcast want to benefit from all those non-Comcast broadband
providers, just as much as Netflix is benefitting from Comcast neutral
broadband?
So bottom line, it is not easy to grow market share in a
mature market where 80% of homes already buy the service.
Hopelessly mired in legacy thinking.
Just stating the obvious. These folks have the ability to
retain existing customers. You are suggesting that someone is
going to come in and dramatically undercut pricing to gain
competitive advantage.
Obviously, as Netflix and Hulu are doing. You seem to think that an open
competitive marketplace **has** to retain the same high profit margins as the
uncompetitive marketplace. But the facts are against you, Craig.
This could happen, but it is not the way that monopolists
behave.
What monopolists? The biggest credible "monopoly" that created market
distortions was the monopoly that distributed coax cables to homes, dedicating
that cable entirely to TV content they controlled. That reality is what allowed
the content owners to become so greedy, taking money even from those who didn't
use their product.
ESPN on Sling, and whatever Apple comes up with is just another
MVPD bundle.
Rubbish. This is political talk, Craig. Read that article again. Did he call
Sling "just another MVPD"? Read it again. Quote from it, to retain what he said.
http://www.multichannel.com/blog/mcn-guest-blog/5-reasons-broadcasters-need-ott-strategy/392717
HBO has NEVER been the "glue" that got people to subscribe to a
MVPD service
Big whoop. ESPN is also losing money, right? And having to cut costs, and being
innovative in how they deliver their product.
ESPN certainly is.
Nope, They broke out of your "the bundle," Craig, which you swore up and down
would never happen.
Why is regulation a necessity? Greed?
Been over this a ton of times. Regulation is a necessity when competition is
impossible. Yes, it is a necessity to keep unbridled greed under control.
Bert
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