[opendtv] Re: TV Programmers Put Subscriber Caps on Skinny Bundles | Media - Advertising Age

  • From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Fri, 10 Apr 2015 09:24:42 -0400

On Apr 9, 2015, at 8:29 PM, Manfredi, Albert E
<albert.e.manfredi@xxxxxxxxxx> wrote:

When you have a walled garden distribution network, where there is a natural
gatekeeper who controls all of the content on the net. When customers are
only tied to one such physical network, the customer is at the mercy of that
gatekeeper. Therefore, the sources of content that share that network can
make all manner of colluding agreements. They have a captive audience.

This was true for broadcast TV before, cable got into the content business, and
it will be true of the Internet when everyone uses it instead of the dedicated
MVPD networks.

It is the ability to access the content you want where the gatekeeping occurs,
and this is driven by business decisions, not the infrastructure used to
deliver the bits.

Want to "Watch House of Cards?" There is only one OTT service that offers it as
part of their subscription entertainment bundle. Want to watch ESPN? You will
need to subscribe to a service that offers a bundle of twenty or more channels.

Is the Internet helping to create competition?

Perhaps.

There is no question that it has allowed companies like Netflix and Amazon to
bypass the traditional oligopolies and offer new and used content. There are
even cases of the Internet allowing individuals to get in the content business
- You Tube (and Facebook) can be considered the new public commons where people
can share their "content."

But the big oligopolies are not rolling over and giving up. They are learning
how to adapt to this new medium, and TO CONTROL IT.

With the Internet, as long as it is neutral, that can't happen. Anyone can
set up a new site any time they want. There is no single gatekeeper, and no
way for all of the content sources to be able to collude.

SEE ABOVE. There is nothing to stop the collusion that exists today. Yes, if
you want to invest a few billion you can start the next Netflix, but you will
likely need to buy content from the oligopoly. There is NOTHING about the
Internet that will keep the oligopoly from continuing to require the bundling
of their most valuable content to attract subscribers.

Just ask Apple, which got prosecuted for monopolistic behavior
when they entered the e-books market, which was dominated
by a monopolist, Amazon.

Not at all the same thing, unless you are beholden to Apple, as you are. I
use all manner of Internet sites. I don't allow any one company to dictate
what I can consume, Craig.

Not the same? Books are entertainment too.

The fact is that Amazon had a virtual monopoly on e-books, and was using
classic monopoly pricing tactics to keep make it unattractive/unprofitable for
other companies to enter this space. Apple tried to move the business model
from "wholesale" to the agency model they use to sell music, TV shows and
Movies. They got prosecuted for monopoly behavior (it was not) and the
Monopolist was protected by the government.

We will see how this all plays out with Apples appeal, but it serves as a
classic example of how the Internet can be used to support monopoly business
models.

As for your use of the Internet, you are misrepresenting reality. Yes you have
access to many free/ad supported sites. Apparently this is sufficient to
satisfy your desires for entertainment content. But please stop the bullshit -
you DO NOT have access to much of the content that is available because you are
unwilling to pay for it.

So, back to the CEOs. They will not be able to set caps on OTT site
membership for very long, if/when they see their faithful loyal MVPD
subscriptions continue to fall.

Time will tell. It's not like they are giving up, or giving away the family
jewels. Let me know when you decide to PAY for CBS All Access, or Sling, or
Netflix, or Hulu Plus.

Yes I know you have Amazon Prime:

http://www.broadcastingcable.com/news/washington/survey-says-free-shipping-trumps-video-driving-amazon-prime/139537

Survey Says: Free Shipping Trumps Video in Driving Amazon Prime

The chance to get two-day free shipping on Amazon is apparently a bigger
driver of Amazon Prime subscriptions in the U.S. than the unlimited streaming
of TV shows and movies that comes along with the service.

That is according to a just-released study from Strategy Analytics, which
found that 55% of U.S. respondents who had Amazon Prime said free shipping
was "very important" to their subscribing, while 46% said instant video was
very important.

The company found also that of those who have subscribed to Amazon Prime,
more said they used Netflix (63%) in the previous month than said they used
Prime Instant Video (59%), though that difference is within the margin of
error.

The Internet is just the pipe Bert, and it can easily be used
to support monopolies.

That amounts to banality, Craig.

I prefer a more accurate term: reality


Regards
Craig

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