On Feb 10, 2014, at 9:05 PM, "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx> wrote: > That's almost totally irrelevant. We're talking about new competing sources > of content. > > TV sets virtually saturate the market. I think we can agree. So if this > ubiquitous TV system offers three channels only, and each is equally popular, > you'd expect a huge viewership for each one. Say, 33 percent audience share > per. With greater competition, duh, you'll get a smaller viewership for any > incumbents. The objective is to increase competition, Craig. The total > audience share is already as close to 100 percent as it's going to get! Nice description of the world in the '60s. But more choice does not equate to more viewing; there are only so many hours a person can watch TV. Competition is good, but not necessarily profitable. Profitability can only come in a few ways: 1. Get people to pay for the programming - this works well for movies, but not so much for TV. ESPN could probably get away with this (actually the do, as 85% of U.S. Homes pay >$5/mo for ESPN. 2. Attract enough eyeballs to sell ads at a price great enough to make a profit. 3. Get people to pay for programming they don't watch - the cable bundling model. For broadcasters, the marginal cost/revenue for additional multicast channels typically is not a major issue, as the profits from the primary channel pay the bills and then some. As I pointed out previously, multicasts actually caused some consolidation, as some of the second tier networks like CW and MyTV, which were carried on separate UHF channels could now be carried as sub-channels. For a network affiliated broadcaster, the cost of adding a sub-channel is very low, so the required ROI is also low. In some cases they pay nothing for this content, as it allows niche services to reach a larger audience. Only a limited number of sub-channels are carried by MVPDs, as they are not covered by must carry/retrans consent. And almost NO MVPD channels are carried in broadcast multi-casts. All this raises another issue that Bert may have a difficult time arguing about. The dramatic rise in specialty niche TV channels was fueled by the growth in capacity of the MVPD systems. It provided market access for all manner of special interest programming, and only needed an audience in the hundreds of thousands to make economic sense (along with the subscriber fees they could collect). An audience of one million homes (nationally) could be very profitable, as these channels also have desirable demographic targets (e.g. Home Depot and Lowe's advertise heavily on HGTV). But nobody has time to watch all of these "appointment TV" channels, and as Bert points out, programming a DVR requires a bit of planning. The big breakthrough with OTT services is that they are VOD services - no planning required. Services like Netflix are growing because of convenience AND the freedom from commercials. If there is a real threat to the MVPD business, it is the fact that they are still in the appointment TV business. As long as there are enough live programs that people are willing to build their personal schedules around, they can get away with bundling. Thus ESPN and other sports channels are the big "anchors" in their "TV malls." But malls are growing passé' especially in the face of competition from Amazon. Strip centers where you can drive up to door of the store you need to shop at are now the big thing... CONVENIENCE. There is much discussion about how ala carte could kill many of these niche channels. In reality, if they have a viable niche and produce their own programming, they will likely survive the transition to the on demand world of OTT TV. The channels that are most threatened are the retread channels like ABC Family and FX. If you can access all of this legacy programming on demand, and without commercials, why watch an appointment TV channel? > No question, OTA, we have increased the sources of content available to > viewers. (And I assume all the OTA subchannels are also available over MVPDs.) No. see above > So the question you should have asked is, are different local stations more > successful than others, with their choice of subchannels? I don't know the > answer quantitatively, but undoubtedly, qualitatively, the answer is yes. A > clever choice of multicasts will bring in more viewership. One example: our > local Univision station just recently added an English language Get TV > multicast. Do you think that will increase or decrease its market share?? Popular sub channels like CW and MyTV do draw a profitable audience.most sub channels do jot unless there is a local target audience they can serve. For example there are many Spanish language and Asian sub channels in the Los Angeles market. But increasing market share (or number of viewers) requires one of three things: 1. Growth in the number of homes in the market with all else being equal. 2. Offering content that gets people to watch more TV. 3. Taking market share from other broadcasters. When we were debating the addition of multicasting to the ATSC standard, many broadcasters were adamantly against the idea. In essence they said "Why would we want to dilute the market for our primary service. As the number of FOTA ONLY homes has not increased significantly with DTV, they may have had a point. Regards Craig ---------------------------------------------------------------------- You can UNSUBSCRIBE from the OpenDTV list in two ways: - Using the UNSUBSCRIBE command in your user configuration settings at FreeLists.org - By sending a message to: opendtv-request@xxxxxxxxxxxxx with the word unsubscribe in the subject line.