[opendtv] Re: News: Northwest Station Pulls Signal In Retransmission Battle
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Wed, 3 Jan 2007 08:50:36 -0500
At 2:46 PM -0500 1/2/07, Manfredi, Albert E wrote:
But this is standard business practice, Craig. The way this should work
is that consumers should have alternative means to get to that content,
via competing distribution media, and it turns out one of those is FOTA
TV. If there's anything out of kilter here, it's that the umbillical
media, and possibly also the broadcasters, seem to think that demand for
umbillical TV distribution services is completely inelastic. As long as
the programming *is* available FOTA, from the broadcasters, I just can't
get all worked up over any of this.
It may be standard business practice Bert, but it can only happen
because Congress gave the broadcasters the legal ability to demand
these extortion payments.
Ask yourself this Bert. Why is it that this is the only country in
the world that I am aware of, where a broadcaster can demand
compensation for something that has already been paid for? In the
rest of the world, broadcasters are queuing up to PAY for the right
to be carried on the popular distribution platforms?
Please explain to me why broadcasters should be compensated for
carriage of their programming, when, as you point out, these signals
can be pulled out of the air for free. And remember, the deal between
the broadcasters and Congress is essentially free use of a valuable
public resource in return for offering their programming in the free
and clear. We all know that it is not free, as the commercials are
expected to pay for the content that is delivered.
So now, the broadcasters are demanding millions in retransmission
consent payments, while they basically run the free OTA franchise
into the ground. And the government does not get a dime of this. In
fact the politicians pay dearly to use this medium to run their
campaign commercials, and we all pay dearly, because the politicians
spend most of their time raising money from special interests to run
for re-election. I saw a story yesterday about the poor prospects for
ad revenues this year for broadcasters. Ad revenues are flat, if not
declining, the cost per thousand has hit the glass ceiling, and
ratings are going down. But the biggest reason that revenues will be
lower in 2007 than 2006, is that the broadcasters will not get a $3
billion cash infusion from the politicians. Not to worry
though...they will probably pull in $5 billion in the 2008 election.
Perhaps I am being a bit too harsh on Bert. After all, he is the one
who is standing up for principle here. He refuses to pay the
extortion demands, and is willing to live with the content that he
can access for free. If we all were like Bert, this would not have
happened.
Maybe he would get more excited about the prospect of having this
mess extended to the Internet. At least for now, with the Internet
there is a clear distinction between carriage and content. You pay a
fee for net access, and you have the ability to access content from
anyone who wants to offer it in the free and clear - and you ALSO
have the right to pay extra for content if you want to.
Contrast this with cable or DBS. Clearly a portion of your monthly
subscription fee is applied toward the cost of building and operating
the distribution infrastructure. This is an industry (cable and DBS)
that has invested significantly more than $200 billion in
infrastructure since the mid '80s. This is an industry that has a
customer support infrastructure with trucks that roll to maintain the
infrastructure and guarantee service at your location. And this is an
industry that collects billions in subscriber fees for "competitors,"
the vast majority of which flow back to four media conglomerates.
Why is there not a breakdown on our monthly cable/DBS bills that
informs us what we are paying for. For example:
Carriage - the amount charged to pay for the infrastructure and
customer service;
Taxes - actually this IS typically broken down on our bills;
Subscriber fees - this is the black hole that no one wants to talk
about, much less quantify.
Why is the industry so opposed to ala carte selection of channels?
Could it be that the present tiered system forces us all to pay for
content that we rarely if ever watch?
The piece claims that the amount asked for is not that big:
"Neither side will say how much KAYU is seeking, but the station says it
is asking for fees smaller than what cable companies pay many cable
channels for the right to carry their programming."
Would you pay $2.70 per month for the Fox network? That is the
rumored average that ESPN receives per subscriber. This accounts for
about 35% of the gross revenues for the Disney corporation. ESPN is
clearly the highest, but there are many channels that are getting
between $0.50 and $1.00 per month per subscriber. Fox News has been
asking for $1 per sub per month, and recently has signed deals
rumored to be in the range of $0.75 per month.
The word on the street is that broadcasters are asking for $1/mo per
subscriber, although it is unclear that any have actually attained
this goal. Even if the station was only asking for $0.50 per month,
what justification is there for this, other than the reality that
everyone is jumping on this bandwagon and screwing the consumer?
The only good news in all of this is that they are building a classic
house of cards, that may fall down under its own weight if a new
channel of distribution is able to bypass them.
AND THAT is where this whole network neutrality debate gets interesting.
If the media conglomerates, together with cable and the telcos can
charge a premium to get bits from one source versus another, they may
be able to protect their existing cash cows. IF, on the other hand,
we can download content form any source, without paying a "use tax,"
we may see alternatives that provide real competition, which will, in
turn, cause the house of cards to crumble.
For $70 per month I can buy a lot of content, especially if my cost
is apportioned reasonably. The actual cost to create and deliver even
the most expensive content to my home is measured in pennies, not
dollars. CBS estimates that a set of eyeballs generates about $.035
to $.050 per hour. I would gladly pay $0.50 to watch a one hour show
WITHOUT commercials.
All I can say here is "boo hoo." The only bad guys in all of this are
the consumers who cave in, instead of taking alternatives that are
already available to them.
I fully understand your position. I even respect the fact that you
refuse to cave in. What i DO NOT respect is your complacency in all
of this. IF you lived in the U.K. you would now have access to more
than 30 channels of unique content, and it would not cost you any
more than you are now paying.
It's kind of like sex. You don't know what you are missing until you
get it. And then once you get it, you can;t live without it, and you
begin to understand just how much it is really costing you.
;-)
You know, the same thing as consumers who get all sanctimonious about
global warming while driving their Ford Expeditions. Boo hoo. They read
Al Gore's book and feel somehow absolved of sin.
Do you mean solar warming?
Based on my experience, those who have read Gore's Book or seen the
documentary are the ones who get all sanctimonious. What is amazing
is the lack of factual basis for Gore's claims. Just goes to
illustrate how powerful the visual medium is in influencing public
opinion.
TV is the most powerful tool to influence an electorate - or the poor
souls who live under dictatorships - ever put into the hands of
politicians. Can't really blame them for trying to maintain their
control of it. Sadly. in most countries the people understand that TV
is a propaganda tool. Here in the U.S. we are constantly reminded of
the "fact" that the government does not control the media.
So how is it that we wound up with the most powerful propaganda
machine in the world, and now - most of us - pay extra every month to
have the Soma delivered?
Regards
Craig
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