[opendtv] Re: [Re: opendtv] Incrementalism
- From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Thu, 9 Jan 2014 09:34:40 -0500
> On Jan 8, 2014, at 4:47 PM, "Manfredi, Albert E"
> <albert.e.manfredi@xxxxxxxxxx> wrote:
>
> Craig Birkmaier wrote:
>
> Craig confuses the argument. With respect to day-to-day TV programs, yes, the
> networks are missing an opportunity (international, mostly). With respect to
> movies, the WSJ article Craig posted confirmed, instead, that the movie
> studios ARE using the Internet effectively. They are not, for example,
> insisting on using only MVPDs, or only movie theaters, to release their
> content. Instead, they are using the Internet, and in doing so, with
> middlemen that add value FOR USE OF THIS MEDIUM. I don't have to go buy a
> movie ticket at Regal Cinema, in order to stream a movie from Amazon.
How are the networks missing the opportunity? Any content that has lasting
value makes it to the international markets via syndication - they make huge
profits on this. Content that has no lasting value may get to international
markets. The networks cannot distribute live sports to international markets
because they do not own the rights. Just look at how the Olympics rights are
licensed. Most news organizations either operate localized portals around the
world, or have sharing agreements with other international news
organizations... A weather forecast from anywhere in the U.S. Is of no real
value in Germany.
>
> Even more importantly, the article indicates that online distribution and
> BluRay disk distribution are the most profitable, for the studios.
Yup. Right after the box office receipts, and for crappy movies the secondary
markets can be more profitable than the theaters. But the congloms take
advantage of every distribution opportunity, even if less profitable, as they
wring every last drop of value from a "content franchise."
>
> Again, Craig misplaces emphasis and muddles the argument.
No Bert. You are guilty of this. The article clearly focused on the growth of
downloads
>
> First point: online distribution can consist of *either* streaming *or*
> download ahead of time. The article DOES NOT differentiate, until the end.
The whole article was focused on the growth of the Digital HD download window,
comparing the growth of this segment with the other distribution media the
studios use. It is worth noting that the TV content market uses similar
channels, but any are ad supported rather than paid.
>
> Secondly, the issue here is why retain unnecessary middlemen, e.g. why pay
> MVPD fees for content that is being streamed (or downloaded, who cares which)
> online, with no involvement of an MVPD network infrastructure. The article
> points out that the movie houses are using the Internet effectively, when it
> comes to movie distribution.
Yup. And they use the following effectively:
1. MVPD distribution via premium movie channels
2. MVPD distribution via VOD and Near VOD services
3. MVPD distribution via ad supported networks
4. International syndication to all of the above
5. U.S. Broadcast distribution to independent stations
6. Packaged media sales and rentals
>
> Thirdly, if Craig had read the article to the end, it did address the
> increasing popularity of streaming:
I read the article Bert. That's why I posted it. Obviously Netflix gobbles up a
ton of Internet bandwidth. We are now a Netflix subscriber for the streaming
service. We looked for a movie last night and gave up - everything we wanted to
watch is only available via their DVD mail service. They have much more to
offer with old TV series.
This should tell you something Bert. They created the Digital HD Download
window to help sell more movies at a higher profit before packaged media
release. Streaming media release may be years down the road, based on what
Netflix, Amazon et al are willing to pay for the rights.
> "Meanwhile, physical media sales-a category that includes both DVDs and
> high-definition Blu-ray discs-dropped 8% to $7.78 billion.
>
> "DVD rental subscriptions, the category that Netflix Inc. pioneered, dropped
> 19% to $1.02 billion, while rentals at stores fell 14% to $1.04 billion.
>
> "Subscriptions for movie streaming, a category dominated by Netflix, remained
> increasingly popular, though, with revenue up 32% to $3.16 billion."
>
> Up 32 percent. Not bad, Craig. Looks to me like people are streaming, as
> their increasingly preferred method of online purchase.
Streaming is not typically a purchase. It is a rental or part of a
subscription. ITunes rents movies for streaming with a 24 hour viewing window,
similar to the daily fees for DVDs.
Shiny discs and Digital HD downloads are purchases - for downloads the media is
stored locally on your devices, and often in a cloud server like iCloud, where
it can be downloaded again or streamed after authorization.
The main takeaway from the stats above is that there are still collectors who
buy discs and now downloaded bits, and the rest of us, who are moving from
physical rentals to streaming rentals and/or subscription services like Netflix.
Regards
Craig
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