[opendtv] Re: Freeview business model
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Tue, 30 Jan 2007 08:56:32 -0500
At 5:59 PM -0500 1/29/07, Manfredi, Albert E wrote:
This is the difference between the Freeview model and the OTA scheme we
have here. Your association with BE is much more similar to what
broadcasters do here with their affiliates and with the cable companies.
What difference? In both cases (U.S. and Freeview) the content is
"primarily" paid for from the advertising revenues that can be
generated. The only difference here in the U.S. is that broadcasters
now expect to receive significant ADDITIONAL compensation from
subscriber fees.
The reason content networks are paying to get their content
onto Freeview is obvious. They can control how they use the
channel(s) and keep all the ad revenue they generate. Bottom
line, if you can generate more revenue than you pay to Freeview
for carriage, you should make a profit.
So why don't you work that with BE? Pay them a fixed fee, and see if you
can't increase your profit?
That's an interesting idea, however, it is not their business model.
They have the infrastructure to sell the advertising - my leverage is
how well I can attract readers, and advertisers that request
placement adjacent to my columns.
Thanks to Internet distribution I "could" go direct to the customer
and sell advertising. I have given this some consideration, however,
the potential "rewards" do not seem to justify the effort.
My point was simple, and I think you missed it. Either model can work
just fine. Either you pay BE, as in Freeeview, or BE pays you, as in
cable and DBS in the US. There's no reason to ask that question over and
over, Craig.
No Bert, you are the one who is missing the point. The Freeview model
is the same as the U.S. commercial broadcast model, with the
exception that broadcasters each operate their own facilities in the
U.S.
Both provide access to viewers for content producers. Both generate
revenues via advertising.
What is different here in the U.S. Bert, is that government
regulation of the TV industry prevents the marketplace from
operating, with the result that multiple entities are skimming
significant additional profits off the top of a highly profitable
business. These entities include Local, State and Federal
governments, broadcasters, muilti-channel distributors, and the
content oligopoly. Even with "State Support" of TV in Europe via TV
set licenses, U. S. viewers pay SIGNIFICANTLY more for TV than
viewers in Europe (except for the small percentage of viewers who
accept an inferior OTA service with limited program selection.
Regards
Craig
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