[opendtv] Re: Court Tosses FCC's 'Net Neutrality' Rules
- From: Albert Manfredi <albert.e.manfredi@xxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Sat, 18 Jan 2014 20:28:11 -0500
Craig Birkmaier wrote:
> Radio had a near death experience. They fully embrace the ad
> supported business model; they even use "FREE" to compete with
> subscription services.
And the subscription radio services are not all that successful. TV uses BOTH
models, and the younger generation is showing signs of bailing from the
so-called "traditional" MVPD model. Maybe not yet a "near death experience,"
but I find it difficult to believe that the TV networks, seeing the trends,
would do no better than clamping down even more with the MVPD model. Although I
do see signs of that level of stubborn-obtuse behavior, e.g. wrt to the way
they require MVPD subscriptions to view Olympics coverage online (as we already
discussed).
> Not necessarily. Look what Amazon has done for shopping - they
> have in essence cut out the brick & mortar middlemen. Clearly
> the congloms and MVPDs are VERY profitable. What would happen
> if one or more new competitors entered the market with a
> business model that was break even or even loses money on the
> content, if they make money in a related business. Perhaps
> Google could sell highly targeted ads at a premium over the
> shot gun advertising used today?
Profitable or not, stubborn-obtuse is not going to cut in the long run. This
recent article describes the shifting tides well, I think.
http://www.post-gazette.com/ae/tv-radio/2013/08/11/I-want-my-E-verywhere-TV/stories/201308110130
> What if the cost to gain access to a "portal" is far cheaper
> than the MVPDs? Subscribers pay far more than the cost of the
> STB to an MVPD; what if the new STB is $99, or FREE.
Of course portal access can be far cheaper. Because an OTT site can start
fresh, create any number of ad-supported or by subscription tiers they care to,
using readily available techniques that IP can support, without being saddled
with the limitations MVPDs grew up with. And the OTT portals don't have to
babysit the customers with truck rolls. STBs? Whatever for? What if the CE
manufacturers got out of bed with the MVPDs and networks, and started building
standard IP appliances? (Or, people can use their handheld toys as STBs.)
Of course, there's that ISP net and last mile connection that someone has to
worry about. I think though, the net effect of efficiencies you can gain with
IP distribution, plus the effect of new OTT entrants that wouldn't feel
constrained by old MVPD models, and the fact that this IP pipe carries a lot
more services than just TV, can't help but reduce total cost of TV content to
the consumer.
> Moving to IP distribution is obvious. But current licenses for
> content are market based. National competition is not likely
> from MVPDs, and we have already established that to make this
> work the ISPs will need content servers in every market.
This worry about "licenses" is only a concern of the networks. The existing
market limitations are not divinely ordained. They evolved from constraints of
old-style MVPD network architecture, which no longer need to apply. And the
same holds with content servers. They too can be mostly the concern of the TV
networks and/or OTT portal, which would own the servers.
So as far as I can tell, it's only the networks that have to see the light. The
networks merely need to give the nod and all manner of new ideas emerge. And
it's been happening, with OTT sites being classified as MVPDs, right? That's a
start.
Bert
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