[opendtv] Re: Sony To Take Viacom Over-The-Top | Multichannel

  • From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Tue, 23 Sep 2014 09:20:06 -0400

> On Sep 22, 2014, at 7:18 PM, "Manfredi, Albert E" 
> <albert.e.manfredi@xxxxxxxxxx> wrote:
> 
> Sure, and that also plays into this restructuring of TV as Internet content. 
> It's merely an additional motivation for content owners to get beyond this 
> MVPD "the bundle" model. The point of the article was, this Internet TV stuff 
> can be done right, and here are some guys more likely to get it right.

The motivation is to preserve the bundle and the associated second revenue 
streams as they transition to the new Internet distribution paradigm. With the 
Internet the fundamental capabilities of an MVPD service are enhanced and 
evolve to take advantage of the new technology:
1. Live streams are primarily important ONLY for live events. But they can be 
viewed on a variety of screens both within and outside the subscribers home.
2. Pre-produced content becomes libraries of on demand content associated with 
the channel brand. It to can be consumed anywhere.
3. Improved security is designed into the system so that the weak 
username/password authentication system can be retired. 

The article suggested single user subscriptions, but this seems too limited. 
iTunes has offered very secure subscription services to families for years 
using multiple devices including Apple TV, iPhones, iPods, iPads, and computers 
(Macs AND PCs).

I wrote:
> 
>> The networks DID lose more than half of their audience. But
>> they are still hanging around.
> 
> Overstated. You are only talking about viewership of FOTA ABC, CBS, and NBC 
> shows. The congloms, which own these networks, still create the vast majority 
> TV content, which includes the highest value content, in demand all over the 
> world. So these congloms have simply *diversified*. That's how they responded 
> to MVPDs, in the 1980s, instead of just sitting around. Your contention is 
> more for dramatic effect than anything else. And the broadcasters themselves 
> have increased their value by adding subchannels, and are still experimenting 
> with these. And they have gained some viewership.

Thanks for listening and making my point. 

The networks still have a role despite dramatic changes in the TV landscape. We 
will see what happens after the next round of auctions. I predict that network 
affiliates will hang around, while most of the rest will take the money and run.
> 
>> Each new threat turns into new opportunities. That DOES NOT
>> mean that they are getting ready to ditch the bundle.
> 
> "Threat?" MVPD mouthpiece talk? For existing or aspiring TV content creators 
> or owners, and for Internet entrepreneurs (which btw includes or should 
> include the very same MVPDs), these are all "opportunities." So for example, 
> when Viacom and Sony made that deal, I did not see anything from Viacom that 
> indicated that Sony had to adhere to some archaic and unnecessary "content 
> bundle," to include non-Viacom content. Ditto with HBO. Ditto with Netflix, 
> Amazon, and the others. Whatever they offer is TOTALLY UNRELATED to any MVPD 
> basic or premium tier bundles.

The Motley Fool  article you posted says otherwise:

> What to expect from Internet TV
> Dish seems to have made the most headway with content companies, negotiating 
> deals withDisney and, more recently, A+E Networks and Scripps Networks. Sony 
> has a deal in place with Viacom, and is reportedly speaking with Disney and 
> Fox. Verizon and DirecTV have yet to announce any agreements with content 
> companies despite talking about their plans.
> 
> Sony and Verizon seem to have an advantage over the satellite TV providers. 
> Sony doesn't have to worry about cannibalizing other television services, and 
> has millions of Internet-enabled devices in people's households already. 
> Verizon has the infrastructure in place -- a content-delivery network, a 
> wireless network -- to support Internet TV and keep prices low.
> 
Everyone is negotiating to create the Internet equivalent f a MVPD service. 
They do not have a competitive business until they can offer all of the most 
important content in the bundle. This is fundamental to any business model 
built around subscription access to exclusive content. Otherwise you have 
something akin to ala carte, and the whole system collapses.

>> The "threat" is only to an archaic business model, Craig. Just as the car 
>> was a "threat" to the stable owner who wasn't quick enough to reinvent 
>> himself into a garage owner.

Not relevant. The congloms have a proven track record taking each new 
technology shift and using it to their advantage. The archaic business model 
evolves and we all pay more...
> 
>> Try again. And remember, Netflix and Amazon are spending
>> hundreds of millions on exclusive original content.
> 
> So what? And Sinclair is also considering creating content. The point 
> continues to be, owners of content that was exclusively dependent on MVPD 
> bundle or premium tier distribution *are today* re-evaluating their options, 
> and some are *already* distributing this content independent of an MVPD 
> bundle or tier. Perhaps with some restriction, e.g. next day or next week, 
> but not necessarily. The fact that these content troves may also get into 
> content production is really cool, but it hardly invalidates the current 
> discussion.

It VALIDATES the current discussion. Everyone has access to "USED" content to 
offer as part of a VOD service. It is the exclusive original content that sells 
the subscription.

> 
>> As for ESPN, those subscriber fees have allowed them to lock
>> up most of the most valuable live sports rights in the U.S.
>> Their entire business model is built around access to
>> exclusive content.
> 
> Which John Skipper says he'll distribute using whatever models make sense at 
> the time, is beginning to do so with MLS content, and that he's keeping his 
> options open for the rest.

Skipper said no such thing. Yes, ESPN is facing new challenges, but they are 
not going to bypass the bundle model that has made their exclusive position 
possible. It would take an act of Congress - to require ala carte pricing - to 
kill the bundle.
> 
>> Yup. Unfortunately, this will mean that the existing congloms
>> will leverage the Internet to give people what they want.
> 
> Unfortunately?? "To give people what they want" is now "unfortunate"? Funny. 
> This is not unfortunate for the consumer, nor the conglom, nor the aspiring 
> content creator, nor the Internet entrepreneur. So, who exactly are you 
> talking about? The OTA broadcaster? Yes, unless they carve out an important 
> Internet role, and/or do what Sinclair mentioned.
> 
They always give people what they want Bert. That's what the ratings are all 
about. And they always make us pay. That is not hoping to change because of 
"this" technology shift.

Regards
Craig

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