[opendtv] Re: Apple TV: Eddy Cue on streaming video and TV channels - Nov. 6, 2015

  • From: Craig Birkmaier <brewmastercraig@xxxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Wed, 11 Nov 2015 07:51:39 -0500

On Nov 10, 2015, at 9:51 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx>
wrote:

Re CBS All Access:


Apparently very well, and they expect even better with the new Star Trek
series. So once again, get off this "second revenue stream" stuff, to justify
legacy formula bundles. The congloms can and do compete head to head now.

Are you an analyst now?

Do you have access to the All Access subscriber figures?

I think not. I think you are pulling this out of your...

Some interesting comments from Les in this Hollywood Reporter article:

http://www.hollywoodreporter.com/live-feed/why-star-trek-went-cbs-836710
Why 'Star Trek' Went to CBS All Access
"A lot of conversation went into what we were going to do [with Star Trek].
All Access is very important," Moonves told analysts, stressing that CBS will
remain both a content supplier of second-window fare for Netflix as well as a
competitor.

"We remain a good partner for Netflix and Hulu. Star Trek is a family jewel;
it's an important piece of business for us as we go forward," said Moonves.
"We're looking to do original content on All Access and build up that
platform. Netflix is our friend a competitor. They compete with [CBS Corp.'s]
Showtime. All Access will put out original content and knowing the loyalty of
Star Trek fans, this will boost it. … There's about a billion channels out
there and because of Star Trek, people will know what All Access is about."

...

Moonves also stressed that Star Trek will be the first of a scripted
expansion for All Access.

The executive also stressed that all of the Star Trek series have done
"exceedingly well" in streaming on All Access and noted that the beloved
franchise still "resonates today."

"All the series have done well in terms of streaming, he said. "Added in to
that, Star Trek is a huge international franchise. Our international
distribution guy is going crazy; he can't wait to get out to the marketplace
and sell that. Right away, we're more than halfway home on the cost of the
show from international alone. The risk is small in seeing the track record.
We think it'll be great and bring in a lot more subscribers. We're really
excited about it."

...

While Moonves declined to provide the total number of subscribers, he
revealed that All Access posted its largest subscriber growth yet in
September and recently debuted on Apple TV.

...

Going forward, Moonves said that there have been conversations about offering
a $9.99 ad-free version of All Access to compete with Hulu's similarly
launched effort.


Would you care to analyze that Bert?

I'll save you the trouble...

Here is the key comment:

"We're looking to do original content on All Access and build up that
platform. Netflix is our friend a competitor. They compete with [CBS Corp.'s]
Showtime. All Access will put out original content and knowing the loyalty of
Star Trek fans, this will boost it. … There's about a billion channels out
there and because of Star Trek, people will know what All Access is about."

"Netflix is our friend...a competitor."

He might as well have said: "Welcome to the oligopoly!"

Original content to build up the platform...
A billion channels out there...
People will know what All Access is about...

That does not sound like CBS the broadcast network is trying to go direct to
consumer. As I said yesterday, it is SVOD play to make some money from the CBS
library. Moonves just confirmed this.

Netflix competes with Showtime...

Who knew?

Everybody.

We are seeing the evolution of how used content is being sold.
Moonves could have said: "Nobody is watching the rerun channels in the MVPD
bundles; they are consuming this content on demand via our friends who we sell
content to. Like our friends we are going to add a little original content to
make these SVOD bundles a little more attractive to potential subscribers.
People will know what All Access is about."

As soon as they discover it exists and why they should spend $6/mo to watch old
programs filled with ads, or maybe $9.99/mo to avoid the ads.

I wrote:

Bundling is not going away,

But your definition of it is obsolete. Now you have to get used to the new
definition. Netflix "bundles," CBS All Access "bundles," Hulu "bundles."
Sure, redefine the word that way, and your "bundling isn't going away"
becomes just another banality.

Earth to Bert!

I've been telling you this for months. Thanks for finally waking up.

And these new bundles are ADDITIVE to the linear TV bundles that are slimming
down to get rid of the bloat and rerun channels that the SVOD bundles are
replacing. That's why more than 40 million homes subscribe to BOTH a MVPD
bundle and a SVOD bundle.

Equally, congloms that use the Internet DO NOT need to insist on your "second
revenue stream." Get it now, Craig? Just as HBO doesn't. Just as CBS All
Access doesn't.

You do not need a second revenue stream when you can charge $15/mo for your
service.

The reason we call it a second revenue stream is that it is in addition to the
first revenue stream - the ad revenues. The successful, expensive SVOD services
do not have the first revenue stream from ads...they can charge a higher
subscriber fee because they do not have ads. Looks like Les is going to join
hits friends and offer a $9.99/mo ad free version of his CBS SVOD service.

But the linear MVPD bundles DO provide the content owners with two revenue
streams, and they have every intention of keeping it that way. The key is being
part of that bundle, whether it is delivered by Comcast, DirecTV, Sling, Sony,
Or Apple.

CBS All Access is an experiment

It's the future. I wouldn't be a bit surprised if others start up their own,
just as HBO did with HBO Now.

First you need a library full of content to stream. Disney could do it. NBC and
Fox may not have enough content to offer to compete.

Then again, the linear TV bundles are evolving into a hybrid, with live streams
and VOD access. TV Everywhere provides TWO services:

1. The ability to cut reliance on the umbilical - any device, anywhere,
anytime.

2. The ability to access library content from that network.

So in a sense there could be real competition - among friends - down the road.

Why do I need two bundles, one for live and recent content, and one for library
content?

What if I could get both from one source? What would I pay?

What if I could add or delete services on demand, rather than getting stuck in
two year contracts?

Me thinks Mr. Cue has a clue. Perhaps Apple is building a platform where
friends can sell their content in more that one way. Apple TV already has an
App that is the equivalent of the CBS.com website. And there is an App for CBS
All Access. Cue is still negotiating to get the live streams from CBS and the
other network affiliates, to put the last missing piece of their new hybrid
service together.

Speak for yourself.

And what were you watching? Please don't try to pull this out too. There simply
was not much program length content to stream in 2005. Paid downloads were
barely tolerable.

This was another trend in the making that you evidently didn't see. I was
watching catch-up episodes that way.

No you were not. They did not become available until the launch of Hulu in 2008.

And I figured that before long, I'd be connecting a PC to the TV set. It took
a few more years, but it did happen that way. Why? Because it was an obvious
big improvement for TV content delivery. Even if in those years, pre-H.264
streams over the Internet, image quality was not very good.

I started hooking up PCs to TVs in the early '90s Bert. I stunned a SMPTE
conference audience in 1995 by playing broadcast quality component video from a
Mac (with Media 100) on a giant screen fed by two ganged Sony projectors in San
Francisco. I consulted with the companies that developed the technologies we
are using today, and wrote about it until 2010.

Please don't try to tell me how it happened.

OTT did not become a significant competitive "threat" until at
least 2010, if not later.

2010 is when I dedicated a PC to the TV, for this job. H.264 had made image
quality very acceptable on a TV sized screen. Old news, Craig.

Talk about changing your story...

What a blind spot you have, Craig. I don't remember LG or Samsung, or RCA or
Admiral before them, or Dell or HP or Lenovo, having to make any special
"deals" with any conglom, to stream their content. You still don't get it.

No Bert. YOU still don't get it.

You don't get ESPN.
You don't get TBS
You don't get HGTV
You don't set Discovery
You don't get the Fox News Channel or Fox Business
...
You just don't get it!

You think that the crumbs they give away are nirvana.

The fact that the networks provide FOTI streams of some of their
shows is irrelevant to this discussion.

ROTFL. Nor does Amazon, or Hulu, have to make special deals with Dell or HP,
or any of the others.

Irrelevant. The content owners are simply experimenting with their web site.
They have already duplicated this capability with free Apps. Get over it.

Where there has been competitive friction - e.g. blocking Google TV - it has
been the content owners blocking devices.

The content owners negotiate with the MVPDs Bert, and pull their content in
order to get higher subscriber fees. There is nothing new here except new
services to sell their content to.

It seems that nobody cares about access to the broadcast networks
but you.

Laughing again. That's why the blackouts cause such a stir among you
MVPD-addicts.

And what content are they using to greenmail the MVPDs? Mostly sports, like the
NFL games you cannot buy from CBS All Access.

That's not up to Apple. If Amazon wants to sell stuff through Apple
TV they can create a app for their stores.

That's funny. I guess Dell must be a lot more clever, then. I seem to be able
to do all of this without making up silly excuses why it can't be done.

Clever? Dell does not have an ecosystem. They are becoming a server company.

Apple must be pretty clever too. I can access everything a Dell computer can on
my Mac, and the Amazon stores on my iPhone and iPad.

Regards
Craig

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