[opendtv] Re: Multichannel New: ACA Members Believe Retrans Fees Will Rise 88% by 2020
- From: Craig Birkmaier <brewmastercraig@xxxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Tue, 20 Feb 2018 07:15:17 -0500
On Feb 19, 2018, at 1:59 PM, Manfredi, Albert E
<albert.e.manfredi@xxxxxxxxxx> wrote:
"It's crazy and unsustainable," Cornelius said in a statement, "If gas prices
did that, a tank of gas would go from about $30.00 to about $70.00."
And if gasoline were a local monopoly, and furthermore not essential, so
nothing for regulators to worry about, your gas station could do just that.
The problem is the local monopoly situation. The rest is entirely to be
expected.
What a bizarre analogy...
In case you had not noticed, gasoline prices tend to move within a narrow
window across all major brands and independents.
https://taxfoundation.org/state-and-federal-treasuries-profit-more-gasoline-sales-us-oil-industry/
However, often ignored in this debate is the fact that oil industry profits
are highly cyclical, making them just as prone to “busts” as to “booms.”
Additionally, tax collections on the production and import of gasoline by
state and federal governments are already near historic highs. In fact, in
recent decades governments have collected far more revenue from gasoline
taxes than the largest U.S. oil companies have collectively earned in
domestic profits.
I agree the problem is with a “monopoly situation,” and that the local cable
companies have been a willing co-conspirator with media congloms, just as the
new OTT services are carrying the subscriber fee water for the congloms to the
internet.
But the oligopoly that the ACA is complaining about is TV broadcasting, a
service that has been granted a government monopoly, and the ability to exact
monopoly rents from the spectrum the broadcasters ARE NOT paying for.
If this money stayed in the local communities served by the broadcasters, one
might be able to build a credible case for the existence of retransmission
consent. But the reality is that most of it flows to the content oligopoly -
four of the five media congloms that control more than 90% of what we see.
If the broadcasters and congloms had to pay for the spectrum they are using,
like the telcos, one might agree that retrans consent is reasonable. But it
flows straight to the bottom line of these congloms, along with the PROFITS
from operating the broadcast networks, which are still supported by advertising
revenues, as they were for more than 40 years before the 1992 Cable Act became
law.
The response from the NAB is disingenuous at best:
And they pointed to other Kagan data showing that retrans is still a small
part - about one-sixth - of overall programming costs. In addition,
broadcast ratings generally exceed that of cable channels, the NAB says.
The reason that is is only 1/6th of programming costs is that the audience for
the broadcast networks is disappearing. Broadcast ratings were off another 10%
this season, and much of the audience (like Bert) DOES NOT view these programs
via an OTA broadcast OR CABLE - the recent NBC story tells us that the eyeballs
are moving to catch-up streaming services.
So why are we paying more and more for something people are using less and less?
The answer is simple: POLITICAL GERRYMANDERING
Fortunately this broadcast “House of Card’s” is about to crumble. Thus it
should come as no surprise that the congloms are going to milk their oligopoly
for every penny they can extort until the audience, and local broadcasting
disappears.
OR - the FCC could fundamentally change the nature of broadcasting, allowing
real competition - the ability for any company to deliver TV content to
stations across a national footprint, with the spectrum utility that delivers
this content OTA paying for the spectrum it uses.
No worries. By 2020, even slow luddites will start to wake up. Options are
available today. The cable industries main role is becoming telecoms, which
is indeed an essential role.
Yes, the Internet is replacing the role that cable and satellite MVPDs play
today in content distribution. But the replacements still exact the same or
higher subscriber fees for the content - the reductions in cost for bundles
like DirecTV Now are nothing more that the elimination of a middleman. And Bert
is correct, those middlemen are evolving into the last mile pipes for the
Internet.
IT’s a WIN, WIN, Lose situation.
The CONTENT CONGLOMS win.
The legacy MVPDs win.
And once again the CONSUMER loses.
Regards
Craig
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