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Unbundling in the Air?


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125 replies to this topic

#61 OFFLINE   tonyd79

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Posted 07 March 2013 - 08:42 PM

This thread has morphed to prove my point: analogies are a waste of time and effort as they invariably fail, and the "discussion" turns to the inaccuracies contained therein, not to the meat of the matter.


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#62 OFFLINE   pdxBeav

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Posted 07 March 2013 - 09:29 PM

This thread has morphed to prove my point: analogies are a waste of time and effort as they invariably fail, and the "discussion" turns to the inaccuracies contained therein, not to the meat of the matter.


I agree. Lots of inaccuracies.

#63 OFFLINE   unixguru

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Posted 08 March 2013 - 08:27 AM

You still don't have the software/chip company thing aligned properly to the TV series thing.


Lots of things are similar but not exactly the same. They don't have to be exactly the same to see my point.

The argument for entertainment price is that the cost model is totally, completely, absolutely different than everything else.

My analogies are to show that there are many similarities, not that they are exactly the same. The root of it is whether entertainment is similar enough to say that it doesn't deserve the different business model that it has.

Yes, a new episode is more like a new version but not quite. I don't know many designs that are updated every week, plus there is no reuse other than the characters and the theme song. The rest is a brand new product every week.


There is not a new product every week. You consume it every week for a few weeks at a time. When doing an analysis of whether I should keep sat I looked up the cost of buying premium series and found the following:

Dexter (SHO) 12 episodes/season
Homeland (SHO) 12 episodes/season
Borgias (SHO) 9 episodes/season
True Blood (HBO) 12 episodes/season
Game of Thrones (HBO) 10 episodes/season
Strick Back (MAX) 10 episodes/season

So many expensive series are 10-12 episodes a year. A maintenance release is similar to a single episode. A major release is similar to 4 or more episodes. 4 maintenance & 1 major a year is similar to 8 episodes. You can play with the numbers all you like but there are many software products that cost more per year to produce than TV series.

You devalue TV series when you say little reuse. It's not just the characters, theme song, production, etc. The very basis of the story line is a huge value. Each episode is an evolution of the story line. The story line is the high risk initial investment. Yep, similar to software (or hardware).

But, why do you continue to compare a startup company to a new TV series? It is more akin to an existing company starting a new product.


It doesn't matter. Some of entertainment is like that. A good deal is not like that. It isn't the network that starts a new entertainment product, it's a production company. The network may or may not have an initial investment but they rarely own the whole thing. These production companies invest in the initial development and then they have to sell distribution rights. The same production company may sell one thing to one network and different thing to another (even one network selling to another: 60 Minutes Sports on SHO). It's not unusual for production companies to pop into existence and then vanish later. Mostly it's just pseudo-independent people that form companies for the purpose of a single production. Even when the production company goes on and on the bulk of a series are contract writers, actors, crew, etc.

Failure rates are far lower in that case for software/chip design than they are for new TV shows. Far lower. Any company in design that fails as many times a pilots are rejected would be out of business. Don't try to sell us otherwise.


You see failure as black and white. It's not. Many software/chip are extremely weak from a business perspective. They may not get killed completely but they also don't make enough money to support a company. Lots of companies can't innovate so as long as products make some profit they remain. One step above a failure. Lots of TV series are like this as well; they stay on the air but the viewership is barely enough. Both have an ROI and it's poor.

You just argued that TV is about existing companies starting new products. If so then they rarely have everything riding on a single product. They too create new products all the time. They may have products that aren't hits but do make enough money to stick around. When a product doesn't pan out... the people just get moved to a new product or their contracts are terminated.

#64 OFFLINE   Laxguy

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Posted 08 March 2013 - 10:54 AM

Lots of things are similar but not exactly the same. They don't have to be exactly the same to see my point.

The argument for entertainment price is that the cost model is totally, completely, absolutely different than everything else.


I stopped reading there. No one has asserted what you've just stated.
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#65 OFFLINE   unixguru

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Posted 08 March 2013 - 03:12 PM

I stopped reading there. No one has asserted what you've just stated.


Really. All the justifications for the current business model claim that it is different from any other industry and it has to be that way or it will either fail miserably or drastically reduce content.

I have not seen a single other industry named that is similar to entertainment. Not one.

Edit: let me rephrase that... Supporters of the TV business model have never named another industry that was likewise special and deserving of a different approach.

Edited by unixguru, 08 March 2013 - 03:26 PM.


#66 OFFLINE   Diana C

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Posted 08 March 2013 - 06:18 PM

Really. All the justifications for the current business model claim that it is different from any other industry and it has to be that way or it will either fail miserably or drastically reduce content...


Actually, what most people would, I think, agree to is that there are many different models under which the broadcast entertainment industry could operate. The broadcast industry could be non-profit, for example, and be supported by a TV tax instead of subscription fees. The United Kingdom operated under such a model for years. It produced some extremely high quality entertainment, but only supported 3 channels.

It could also operate on a fully advertising supported model, where no one pays any subscription fees for content. The United States operated under such a model for many years. That supported 1 to 6 channels, depending on size of the broadcast market.

It could operate on a fully subscription based model, with no advertising at all. HBO, Showtime, Starz and Epix operate on this model, and it supports 4 services across about 50 or so channels, but only a small amount of original programming.

Or, it can operate on a mixed subscription fee and advertising model, where each provider markets a "package" of channels and, to maximize advertising revenue, they strive to be distributed to as many viewers as possible. This model is what we have today in multi-channel broadcasting. It supports almost 300 channels of varying quality and originality, but with a wide breadth of diversity in content.

Finally, it could operate under a combination subscription and advertising model where each channel is offered individually, without any packages. This model was implemented in C-band satellite broadcasting for a few years. It has also been experimented with in Canada. It remains unclear whether or not the costs to the consumer for such a model would be less or more than the package model, since in every case where it has been tried, it has "piggybacked" on the package model.

To be clear, any of these models are viable. They have all been tried, at least partially. However, the marketplace lead to the current model in the US. Some people may feel that this model is unfair to them. Others feel differently. Some feel we should try the a la carte model, but unless and until it were THE standard model, it would be impossible to say whether it was successful.

Personally, it is my opinion that the current model seems to work best IF your goal is breadth of diversity and choice. If your goal is something else, then one of the models may work better. I like the breadth of options I have when I turn on the TV and am trepidatious about altering the model by government fiat, without any evidence that it will deliver the promised benefits.

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#67 OFFLINE   tonyd79

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Posted 08 March 2013 - 06:46 PM

Beautiful post, Diana.
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#68 OFFLINE   Justin23

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Posted 08 March 2013 - 06:57 PM

Beautiful post, Diana.


Agreed...one of the best ever on this forum.

#69 OFFLINE   pdxBeav

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Posted 08 March 2013 - 07:43 PM

....To be clear, any of these models are viable.....


Exactly! Well said. The current model isn't the only one that can work. I agree with you 100%.

#70 OFFLINE   unixguru

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Posted 10 March 2013 - 05:44 PM

Todays newspaper contained a www.parade.com magazine insert with an article titled What People Earn.

It says Mark Harmon, the star (and exec producer) of the CBS series NCIS (#1 TV show), is estimated to make $38 million from his new contract. Says a "healthy raise" over his previous 2-year contract for $500,000 an episode (google search has many estimating $700,000 per episode).

As a side, for those that were bemoaning music industry salaries in the other thread, it also says Adele is estimated to make $32 million.

Obscene. Wealth Inequality in America

#71 OFFLINE   sigma1914

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Posted 10 March 2013 - 05:49 PM

Todays newspaper contained a www.parade.com magazine insert with an article titled What People Earn.

It says Mark Harmon, the star (and exec producer) of the CBS series NCIS (#1 TV show), is estimated to make $38 million from his new contract. Says a "healthy raise" over his previous 2-year contract for $500,000 an episode (google search has many estimating $700,000 per episode).

As a side, for those that were bemoaning music industry salaries in the other thread, it also says Adele is estimated to make $32 million.

Obscene. Wealth Inequality in America


If someone was willing to pay you millions for a skill you have, then you'd decline?
If you stop responding to them or put them on ignore, then eventually they'll go away.

#72 OFFLINE   dpeters11

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Posted 10 March 2013 - 06:06 PM

Todays newspaper contained a www.parade.com magazine insert with an article titled What People Earn.

It says Mark Harmon, the star (and exec producer) of the CBS series NCIS (#1 TV show), is estimated to make $38 million from his new contract. Says a "healthy raise" over his previous 2-year contract for $500,000 an episode (google search has many estimating $700,000 per episode).

As a side, for those that were bemoaning music industry salaries in the other thread, it also says Adele is estimated to make $32 million.

Obscene. Wealth Inequality in America


And how much does Adele make for her record label? If she makes that much, you can bet the label that pays her makes much more. If she didn't make what she does, the label would be even richer off her talent.

#73 OFFLINE   Tom Robertson

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Posted 10 March 2013 - 06:13 PM

Haven't we had these cost analogies already beated to death (multiple times) in another thread?

And to move things back on track, this is not a wealth inequity forum, much less this thread.

Peace,
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#74 OFFLINE   unixguru

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Posted 11 March 2013 - 01:38 PM

If someone was willing to pay you millions for a skill you have, then you'd decline?


Of course not! If they are that stupid then so be it.

I would like to decline to contribute to anyone in the TV business that makes anywhere close to that much. But I'd have to stop using TV delivery services entirely. (Ironically, I'd still get to watch that guy for free OTA.) I do feel stupid that I pay what I do for the entertainment I get. There doesn't seem to be much I can do about it other than go cold-turkey.

Like CEOs, pro sports, etc, nobody is justified in making 100's of times more than the average person.

Haven't we had these cost analogies already beated to death (multiple times) in another thread?


How is Mark Harmon's pay an analogy? He is an actor and executive producer of a TV series.

The arguments have been about how they need to make big bucks on the series that are successful to pay for the 70% that fail completely. Mark Harmon and others like him are not a network or a production company. That's his personal pay. How much do people think he turns around and risks on new entertainment projects? I'd bet zero.

He can't be faulted in any way for doing this. It's the system he works in and if he doesn't take all the money he can get then others will. It's the system I have a beef with.

#75 OFFLINE   Diana C

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Posted 11 March 2013 - 01:56 PM

...I would like to decline to contribute to anyone in the TV business that makes anywhere close to that much. But I'd have to stop using TV delivery services entirely. (Ironically, I'd still get to watch that guy for free OTA.) I do feel stupid that I pay what I do for the entertainment I get. There doesn't seem to be much I can do about it other than go cold-turkey....


You'd also have to stop buying cars, food, soft drinks, and anything else that is advertised on TV. The VAST majority of the money that Mark Harmon earns comes from advertisers, not the relatively tiny amounts the affiliates collect in retransmission fees. Advertising rates on NCIS run around $170,000 per 30 second spot. With an average of 20 minutes of advertising per hour in primetime, CBS is collecting almost $7 million per episode.

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#76 OFFLINE   Tubaman-Z

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Posted 11 March 2013 - 02:01 PM

So, I wonder how that lawsuit between Cablevision and Viacom (with Time Warner Cable and DirecTV making statements supporting Cablevision) will turn out? I hear that Cablevision wants the courts to force Viacom to allow for unbundled channels. Anyone want to put (virtual) bets on how it will turn out?

(Oh, my apologies - that was an on-topic post in this thread).

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#77 OFFLINE   Tom Robertson

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Posted 11 March 2013 - 02:48 PM

...
How is Mark Harmon's pay an analogy? He is an actor and executive producer of a TV series.

The arguments have been about how they need to make big bucks on the series that are successful to pay for the 70% that fail completely. Mark Harmon and others like him are not a network or a production company. That's his personal pay. How much do people think he turns around and risks on new entertainment projects? I'd bet zero.

He can't be faulted in any way for doing this. It's the system he works in and if he doesn't take all the money he can get then others will. It's the system I have a beef with.

Yet this thread is not about entertainment pay. So, please :backtotop

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#78 OFFLINE   JoeTheDragon

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Posted 11 March 2013 - 08:05 PM

So, I wonder how that lawsuit between Cablevision and Viacom (with Time Warner Cable and DirecTV making statements supporting Cablevision) will turn out? I hear that Cablevision wants the courts to force Viacom to allow for unbundled channels. Anyone want to put (virtual) bets on how it will turn out?

(Oh, my apologies - that was an on-topic post in this thread).


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#79 OFFLINE   unixguru

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Posted 12 March 2013 - 02:13 PM

Yet this thread is not about entertainment pay.


Then your idea of on topic is too narrow.

Bundling is claimed to be necessary to support the weaker content from the revenue of hit content. We got to help those poor networks and producers who take risks otherwise the breadth of available entertainment will dry up. This implies a good deal of the profit from a hit is reinvested back into the business to fund less successful projects. People involved in hits should be reasonably rewarded too.

What that persons pay shows is that the rewards are obscene; that they don't need the kind of profits they are making to support the weaker content (otherwise they couldn't spend so much on pay).

The facts are that the consumer is being fleeced by the whole industry from the top far down (not to the bottom average worker bee).

If they can afford to pay him that much for his face appearing on TV a few minutes a week then you don't even want to think of what those above him are making.

Sheeple need to wake up.

#80 OFFLINE   dennisj00

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Posted 12 March 2013 - 02:32 PM

Sheeple need to wake up.


Just curious. Have you cancelled your pay TV, any services like Netflix, or any DVD purchases?

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