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Unbundling in the Air?


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#101 OFFLINE   OneOfOne

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Posted 15 March 2013 - 08:46 PM

the whole argument against unbundling of channels is negated by the fact that in the days of the big dish you could buy your channels a la carte. there is no valid argument against a la carte. period. if you only want 20 channels or 5 channels or 105 youll pay what you think they are worth to you. the niche channels that the providers say would die exist solely to sell more ad space. some of us would get mainly sports channels and news channels. others would get some other mixes. there is no reason why this shouldnt be the case right now. there is no provider who really is interested in what the customer wants and the broadcasters dont really care either. thats the real issue, 2 entities drinking your water before it gets to you and not caring that you dont like the taste of the result.
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#102 OFFLINE   KyL416

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Posted 15 March 2013 - 09:52 PM

the whole argument against unbundling of channels is negated by the fact that in the days of the big dish you could buy your channels a la carte. there is no valid argument against a la carte. period. if you only want 20 channels or 5 channels or 105 youll pay what you think they are worth to you.

And that's negated by the fact that with C-Band there was no middleman (DBS or Cable or Telco) that had to cater to the viewing habbits of their entire service area and not just your house when getting channels from Turner, Viacom, Disney, NBC Universal/Comcast and other providers.

the niche channels that the providers say would die exist solely to sell more ad space.

Considering in most cases said niche channels air programming that is not seen on their parent channel (i.e. shows that air on Science vs Honey Boo Boo on TLC, the shows on H2 vs Swamp People on History, Degrassi and Dance Academy on TeenNick vs the endless Spongebob reruns on Nickelodeon), they are more than just places to sell more ad space, heck in the early days of digital cable before many of them reached that 40 or 50 million subscriber threshold many of them weren't even ad supported.

some of us would get mainly sports channels and news channels. others would get some other mixes. there is no reason why this shouldnt be the case right now.

Unbundling and a-la-carte are not one in the same.

Unbundling = The cable or DBS provider not having to carry additional channels like Nicktoons, TeenNick, BET, MTV Hits, VH1 Classic to get MTV, VH1, Comedy Central and Nickelodeon. Providers actually can do this if they want to, they just have no motive to because in addition to losing the discount if they get them in bulk, they are well aware that they serve multiple homes with varying viewing interests and need to cater what they offer to the overall viewing interests of the areas their systems serve. In most areas they have subscribers with nearly every possible combination of viewing habbits so it's in their best interest to offer all of them to their subscribers, but they can make customizations based on the area. i.e. many cable companies in New Hampshire and Vermont do not carry BET or MTV Jams but they had no problem getting MTV and VH1.

A-la-carte = The subscriber being able to purchase any channel they want individually, provided the cable or DBS company offers said channel.


This lawsuit has nothing to do with a-la-carte and the elimination of tiers. Heck Cablevision is one of the worst offenders since their digital tiers also include premium cable channels. Their primary digital tier includes Encore, if you want the channels in the secondary digital tier, you have to get a package that also includes HBO, Starz and Showtime, and you can't swap them out for other premiums like Cinemax, The Movie Channel, Flix or their Sports Pack (which for some weird reason is the only way to get GSN)

Cablevision is crying foul on digital nets they picked up voluntarily over the past 11 years and renewed a year ago without being forced to pickup the multiple Viacom channels they never carried (Nick 2, MTV Jams, mtvU, CMT Pure Country, BET Gospel, Epix) or being forced to give greater penetration to the existing ones. They had Noggin (now Nick Jr), Nick GAS (who's feed is now TeenNick) and VH1 Classic when they launched their digital cable service, they were one of the first affiliates of Nicktoons and MTV Hits, and they had Palladia HD since the MHD days. They also picked up multiple other Viacom channels like Logo, Tr3s and VH1 Soul over the years. In most cases it was outside of the renewal period when they added them. In articles about the lawsuit, they singled out MTV Hits (MTV's channel that actually plays music videos 24/7), VH1 Classic, and Palladia HD (music programming like the MTV World Stage concerts), channels that are not in the same expanded basic tier as Viacom's core channels.

Cablevision isn't suing to split them out in different tiers, they already do that, Cablevision doesn't want to offer these channels at all, channels that just happen to be the biggest competition of the Dolan's own music channel Fuse. It would be like Comcast saying no to Disney Junior and Nick Jr because they want every subscriber with a preschooler to watch their own Sprout.

Edited by KyL416, 15 March 2013 - 10:00 PM.
Adding notes about when they picked up the channels


#103 OFFLINE   unixguru

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Posted 17 March 2013 - 08:00 AM

And that's negated by the fact that with C-Band there was no middleman (DBS or Cable or Telco) that had to cater to the viewing habbits of their entire service area and not just your house when getting channels from Turner, Viacom, Disney, NBC Universal/Comcast and other providers.


Doesn't internet delivery enable the same kind of no-middleman scenario?

Ignore the current issues of bandwidth, etc, etc (as they won't remain roadblocks forever).

Cablevision isn't suing to split them out in different tiers, they already do that, Cablevision doesn't want to offer these channels at all, channels that just happen to be the biggest competition of the Dolan's own music channel Fuse. It would be like Comcast saying no to Disney Junior and Nick Jr because they want every subscriber with a preschooler to watch their own Sprout.


Of course it's all about greed. The legal system is a funny thing - getting a judgement for one thing can have side effects.

If they win then all the delivery services are going to run a comb through all the channels cutting out the stuff that they don't want to carry on their service. The consumer will be left with a couple of options where there is potential that none of them have the combination of programming that they want.

All this shows is that the current system, and any variation sought by delivery companies, is not good for the consumer.

At best this is stirring up the issue. Maybe someday the government will go after the bundling/product-tying for what it is - illegal.

I'd like to see this:

  • Services delivering content into the home be treated as public utilities
    • Regulated and required to offer a basic level of content
  • Pay for the delivery service itself as a separate line-item
    • discounted for "volume" of content purchased
  • Pay for content a la carte
    • or mini-bundles offered by content providers at a discount


#104 OFFLINE   JoeTheDragon

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Posted 17 March 2013 - 09:39 AM

Doesn't internet delivery enable the same kind of no-middleman scenario?

Ignore the current issues of bandwidth, etc, etc (as they won't remain roadblocks forever).



Of course it's all about greed. The legal system is a funny thing - getting a judgement for one thing can have side effects.

If they win then all the delivery services are going to run a comb through all the channels cutting out the stuff that they don't want to carry on their service. The consumer will be left with a couple of options where there is potential that none of them have the combination of programming that they want.

All this shows is that the current system, and any variation sought by delivery companies, is not good for the consumer.

At best this is stirring up the issue. Maybe someday the government will go after the bundling/product-tying for what it is - illegal.

I'd like to see this:

  • Services delivering content into the home be treated as public utilities
    • Regulated and required to offer a basic level of content
  • Pay for the delivery service itself as a separate line-item
    • discounted for "volume" of content purchased
  • Pay for content a la carte
    • or mini-bundles offered by content providers at a discount


Also maybe do some about being foreced to rent there box (with tech / shipping fees when it fails to get it replaced) and or stop the outlet / mirroring / client / ect fees for useing you own or boxes that you payed full price for.
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#105 OFFLINE   unixguru

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Posted 18 March 2013 - 03:15 PM

Verizon Seeks to Shake Up Fees for TV Channels

The air is starting to smell burnt... like the smoldering has turned into a fire...

:icon_da:

#106 OFFLINE   FLWingNut

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Posted 18 March 2013 - 03:20 PM

Doesn't internet delivery enable the same kind of no-middleman scenario?

Ignore the current issues of bandwidth, etc, etc (as they won't remain roadblocks forever).

Of course it's all about greed. The legal system is a funny thing - getting a judgement for one thing can have side effects.

If they win then all the delivery services are going to run a comb through all the channels cutting out the stuff that they don't want to carry on their service. The consumer will be left with a couple of options where there is potential that none of them have the combination of programming that they want.

All this shows is that the current system, and any variation sought by delivery companies, is not good for the consumer.

At best this is stirring up the issue. Maybe someday the government will go after the bundling/product-tying for what it is - illegal.

I'd like to see this:


[*]Services delivering content into the home be treated as public utilities

[*]Regulated and required to offer a basic level of content

[*]Pay for the delivery service itself as a separate line-item

[*]discounted for "volume" of content purchased

[*]Pay for content a la carte

[*]or mini-bundles offered by content providers at a discount


Why should they be regulated like a public utility? It's TV we're talking about, not water or electric service. Pay TV is not a necessity. If you're unhappy with it, drop it and put up an antenna.

#107 OFFLINE   tonyd79

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Posted 18 March 2013 - 03:20 PM

Verizon Seeks to Shake Up Fees for TV Channels

The air is starting to smell burnt... like the smoldering has turned into a fire...

:icon_da:


Nothing to do with you or me. They are just trying to lower their costs. It does not say ANYTHING about you getting to pick your channels or your bill changing because of what you watch.

They are just trying to replace ratings with actual viewership.

No smoke at all.
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#108 OFFLINE   tonyd79

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Posted 18 March 2013 - 03:23 PM

Why should they be regulated like a public utility? It's TV we're talking about, not water or electric service. Pay TV is not a necessity. If you're unhappy with it, drop it and put up an antenna.



Cable is regulated in most places. It is just a matter of what is regulated. An example, all cable systems in my county must carry the local information and entertainment channels run by the county and the community college. So, it is just a matter of how regulated.
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#109 OFFLINE   sigma1914

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Posted 18 March 2013 - 03:25 PM

Verizon will measure viewership? I don't see any channel agreeing to that; they'll want a 3rd party measuring. Also, this is Verizon we're talking here; they're a small and pretty insignificant player due to their extremely limited area.
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#110 OFFLINE   FLWingNut

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Posted 18 March 2013 - 03:50 PM

Cable is regulated in most places. It is just a matter of what is regulated. An example, all cable systems in my county must carry the local information and entertainment channels run by the county and the community college. So, it is just a matter of how regulated.


That's because cable uses infrastructure -- public right of ways and such -- that satellite doesn't use. And cable has a "franchise" agreement with various city and county governments. Whole different animal.

#111 OFFLINE   pdxBeav

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Posted 18 March 2013 - 07:58 PM

Verizon Seeks to Shake Up Fees for TV Channels

The air is starting to smell burnt... like the smoldering has turned into a fire...

:icon_da:


We've been told numerous times that the current pay tv economic model is the best and can't change so this article must be false.

#112 OFFLINE   Laxguy

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Posted 18 March 2013 - 09:22 PM

We've been told numerous times that the current pay tv economic model is the best and can't change so this article must be false.


Few, if anyone here, have said it can't or won't change. I also doubt that more than a couple folk have waxed quixotic about it, either.
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#113 OFFLINE   tonyd79

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Posted 18 March 2013 - 09:46 PM

We've been told numerous times that the current pay tv economic model is the best and can't change so this article must be false.


All they are trying to change is the ratings system. This is not a change of the model, just a change in how the price is determined. Rather than using Nielsen sampling, Verizon wants to use hard data. Not a change in the bundle system.

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#114 OFFLINE   pdxBeav

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Posted 18 March 2013 - 09:57 PM

All they are trying to change is the ratings system. This is not a change of the model, just a change in how the price is determined. Rather than using Nielsen sampling, Verizon wants to use hard data. Not a change in the bundle system.

#grabbingatstraws


I read the article. I know it's not a change in the bundle system, but it's a change in how Verizon pays the programmers. That, by definition, is a change in the current model. If it means less revenue for any network then people are going to be up in arms because it'll mean the loss of quality programming. At least that's what we've been told.

#backingawayfrompreviousclaims

#115 OFFLINE   tonyd79

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Posted 18 March 2013 - 10:04 PM

I read the article. I know it's not a change in the bundle system, but it's a change in how Verizon pays the programmers. That, by definition, is a change in the current model. If it means less revenue for any network then people are going to be up in arms because it'll mean the loss of quality programming. At least that's what we've been told.

#backingawayfrompreviousclaims


No, it is not a change in the model at all. It is just a replacement of the ratings system. Would you claim if Nielsen were replaced by another company, the model changed?

#notunderstandingwhatamodelis

It still means bundling. It still means a contract. It still means companies will ask and get money.

How is the model changing?

Companies get money, not channels.
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#116 OFFLINE   pdxBeav

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Posted 18 March 2013 - 11:14 PM

No, it is not a change in the model at all. It is just a replacement of the ratings system. Would you claim if Nielsen were replaced by another company, the model changed?

#notunderstandingwhatamodelis

It still means bundling. It still means a contract. It still means companies will ask and get money.

How is the model changing?

Companies get money, not channels.


It is 100% a change in the model for the affected networks. Here's the link again:

http://online.wsj.co...NzExNDcyWj.html

It is not just a replacement of the ratings system. They want to use the new ratings system to determine how much to pay the networks. This is completely different than the current system.

I agree that this proposed change won't affect end users now, but it's a start.

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#117 OFFLINE   Tom Robertson

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Posted 18 March 2013 - 11:30 PM

It is 100% a change in the model for the affected networks. Here's the link again:

http://online.wsj.co...NzExNDcyWj.html

It is not just a replacement of the ratings system. They want to use the new ratings system to determine how much to pay the networks. This is completely different than the current system.

I agree that this proposed change won't affect end users now, but it's a start.

#bythewayienjoyyourhashtags ;)


On the one hand, this is a complete rework of the system. Pay for use. Yet...

In theory this just refines the data that is used to measure the value of a channel. Rather than Nielsen ratings, it will be set-top data. Not a really big difference.

But... The real meat is value of the content too. Is USA worth $5/month? Is ESPN worth more then $.68?

Let's face it, ESPN won't take less than the $500M per month they get now. They will find a way to get it no matter how the market changes. Because their costs are so high.

(Then there are all the sidebar issues, does USA ever get as many viewers as ESPN does for Monday Night Football? Do you count peak per week, month, or quarter? Do you toss out the top 5 timeslots?)

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#118 OFFLINE   Diana C

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Posted 19 March 2013 - 05:40 AM

As it happens, my company's client list includes both several of the content providers mentioned as well as a couple of multi-channel operators. In my work with these companies I have gained a certain amount of insight into their operations and cost structures. Confidentiality prevents me from going into too much detail, but let me just throw out a few points....

The revenue earned from advertising time on virtually any non-sports channel has barely kept up with inflation, let alone the rise in operating costs. This is why channels are more and more turning to subscriber fees. This fall off in advertising revenue is caused by two factors: the increase in channels (which all compete for the same ad dollars by delivering ever more narrow demographics) and the advent of DVRs. Advertisers have been tracking DVR use for years and have a very good sense of how many people skip commercials. They build this "discount" into what they are willing to pay. Meanwhile, costs continue to rise - most channels have yet to pay off the costs of HD conversion, to use just one example.

You would also be surprised at the portion of your monthly bill that has nothing to do with content. The cost of providing the delivery service itself, including billing, customer support, delivery medium maintenance, etc. makes up a larger portion than most would expect.

Do you know what a MCO's biggest headache is? Tracking subscriber counts - knowing how many subscribers have access to which channels. The more "tiers" and packages an operator has, the more difficult the problem. Managing and tracking multiple tiers, grandfathered packages, and the monthly changes subscribers make, not to mention blackouts, special promotions and PPV purchases, is a huge headache and a major expense. Having an accurate count is also critical since that determines how much they pay people like Disney, Viacom and Fox.

Over the past several weeks there has been a lot of discussion on this site, spread over two different threads, about the evils of "bundling" and the virtue, if not the inevitability, of al a carte pricing models. However, even those that most ardently promote the al a carte model do not deny that it will mean the demise of several channels (often with a "good riddance" added on). This, unfortunately, is the largest obstacle to al a carte taking hold. In survey after survey and by their buying habits, consumers have shown that they prize variety more highly than any other quality.

For proof, all you need do is look at the history of DBS. The way DBS services are measured most often comes down to channel counts. In the early days it was raw channel counts, these days it is HD channel counts. Nowhere do we see advertising touting a provider with fewer channels, but "high quality" ones. The reason is simple...in a nation of 100 million households the definition of "high quality" is highly debatable.

As long as the American consumer is more focused on quantity than on quality, and as long as television is a for-profit industry, the future will look a lot like the past.

One comment on Internet delivery: yes, it is in its infancy right now. However, there needs to be some fundamental changes in the delivery technology for it to scale to the level required to be a challenge to linear broadcasting. Session based IP delivery from central servers works in the early adopter phase, but is not sustainable. To become truly an alternative to broadcasting will also require a massive investment in broadband Internet infrastructure across the country. Many parts of the country are severely under served when it comes to high speed data delivery and this is a prerequisite for IP delivery to become a real market place factor.

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#119 OFFLINE   unixguru

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Posted 19 March 2013 - 08:03 AM

Let's face it, ESPN won't take less than the $500M per month they get now. They will find a way to get it no matter how the market changes. Because their costs are so high.


Maybe. Let's imagine what would happen if the consumer actually had a choice as to whether they funded ESPN (a choice other than not having a TV delivery service at all).

  • The price of ESPN would be visible to all
  • A consumer could decide if the value is right for them
  • If there were a reduction in consumers:
  • ESPN would see less revenue
  • Like any other business ESPN would negotiate lower costs
  • This would propagate down to the leagues, team owners, players, ...
In other words... like any other business! The pressure of reduced revenues due to being overpriced keeps everything in balance. If you can't build a part (or service or whatever) for a reasonable cost then you don't build it.

Today there is very little balance. The entire foodchain just names their price and gets it. If you could name your pay would you go for fair? Of course not. You'd aim high. But not 2X what others are getting. Then every year (or contract) you would raise it as much as you could without being radically different than others. All your colleagues would do the same so the trend would be wonderful (for all of you). After all, it's the "going rate" so who can challenge it? That actor/producer I referred to... 40% raise over prior 2 year contract. Yeh, 40% every 2 years... that seems... fair :grin:. CEOs, Wall Street, and lots of others figured this out sooner than sports.

#120 OFFLINE   pdxBeav

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Posted 19 March 2013 - 08:18 AM

Let's face it, ESPN won't take less than the $500M per month they get now. They will find a way to get it no matter how the market changes. Because their costs are so high.


If ESPN was unbundled they would get what the market will bear. I know we've gone in circles on this issue, but without bundling ESPN would set their price to maximize profits. It really is that simple.




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