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Intel to Offer A La Cart?

29K views 458 replies 51 participants last post by  housemr 
#1 ·
#377 ·
Tom Robertson said:
So now the story is the Internet will survive long enough for a major dent in the industry ripples back to the content providers?

What would happen is ESPN will still get its money. Dish, DIRECTV, comcast, etc. won't. They will feel the squeeze first. Then Intel will as it grows to a size that ESPN will start charging them more. (If they haven't all along.)
So you're suggesting that we should all just go back into our caves and plan on 4%+ a year increase forever for no increased value?

I don't care how ESPN gets their money. Maybe the consumers of it will actually flip the whole bill instead of being subsidized by those of us who don't use it. The day everyone starts subsidizing my premium channels we can talk.
 
#378 ·
unixguru;3183086 said:
So you're suggesting that we should all just go back into our caves and plan on 4%+ a year increase forever for no increased value?

I don't care how ESPN gets their money. Maybe the consumers of it will actually flip the whole bill instead of being subsidized by those of us who don't use it. The day everyone starts subsidizing my premium channels we can talk.
Every channel you like is being subsidized by others.
 
#379 ·
tonyd79 said:
Best Buy gets replaced by another middle man. So what?
Amazon and the like are middlemen. Their margins are much smaller and their breadth of product much wider. Not much more than wholesale + a tiny markup. Shipping is probably the biggest part.

The so what is that consumers pay a lot less money. The only downside is the delay in getting the product. It's extremely rare to see any product in BB that isn't much more expensive than online. When they start price-matching online then they are toast. BB is going to get taken out by the overhead of physical stores.

If the consumer electronics industry was like the TV industry then none of the manufacturers would sell to internet retailers. They would only sell to big box stores that could buy in large volume. Prices would be much higher - like they used to be. Manufacturers would make more money too. Why aren't things this way?

Blah blah TV distribution is totally different blah blah. Greed is universal. Things are getting ripe.
 
#381 ·
unixguru;3183097 said:
Amazon and the like are middlemen. Their margins are much smaller and their breadth of product much wider. Not much more than wholesale + a tiny markup. Shipping is probably the biggest part.

The so what is that consumers pay a lot less money. The only downside is the delay in getting the product. It's extremely rare to see any product in BB that isn't much more expensive than online. When they start price-matching online then they are toast. BB is going to get taken out by the overhead of physical stores.

If the consumer electronics industry was like the TV industry then none of the manufacturers would sell to internet retailers. They would only sell to big box stores that could buy in large volume. Prices would be much higher - like they used to be. Manufacturers would make more money too. Why aren't things this way?

Blah blah TV distribution is totally different blah blah. Greed is universal. Things are getting ripe.
But linear distribution is actually the cheaper mechanism than heavily burdened Internet with large buildout costs and the need to develop a large caching infrastructure, etc. broadcast is cheaper. So, you example actually works against you position when viewed from cost.

And for your ota comment in another post. In the digital age, fewer people get clean reception than ever. Urban areas have huge multipath problems and signals are not going as far with enough stability as did with analog. Analog, you got ghosts and fuzziness until the picture was so bad you couldn't see it. Digital rejects at a higher level and you get nothing.

With analog, I got far more channels (not counting subs) from a greater distance with an indoor antenna than I can with digital. And I live close between to major cities.
 
#382 ·
unixguru said:
So you're suggesting that we should all just go back into our caves and plan on 4%+ a year increase forever for no increased value?
Based on my own, personal standard of television content value (your mileage may vary) I did see increased value from D* in 2012 and already in 2013. In addition to the national HD channels that were added in 2012 (someone else can provide the specific list if that is necessary) D* added my locals in HD. While I have a deep fringe antenna on a 20' mast on top of a 2 story home with a pre-amp and a rotor the D* supplied locals do come in more consistently (I'm in a wooded valley in a rural area). That in and of itself provided the value to offset the increase. And now in 2013 they've already added 8 HD channels, 6 that are in my tier.

Those changes easily comprise enough value to offset the increase. The functional changes to my HR20? Eh, not so much. I still don't have YouTube working and I dislike what they've done with the To-do List and closed captioning enable/disable. Yes, I am still looking at alternatives and will likely be down to 1 DVR from 3 by mid-year. But that doesn't mean that I think that D* has not increased their YtY value. It just means that I'm cheap. And I plan to keep the 1 DVR due to live sports viewing.
 
#383 ·
tonyd79 said:
But linear distribution is actually the cheaper mechanism than heavily burdened Internet with large buildout costs and the need to develop a large caching infrastructure, etc. broadcast is cheaper. So, you example actually works against you position when viewed from cost.
Agreed that the technology is cheaper and more efficient. In fact, it can be made much more so. Take what I've said about internet DVRs and apply to satellite. Imagine every unique show is pushed out over satellite 2 or 3 times - just for redundancy. Live stuff wouldn't change. What fraction of satellite equipment would be required to deliver the same content?

It's a few content distributors that are pushing this to the breaking point with their draconian business tactics.
 
#384 ·
unixguru said:
Does a portion of every subscribers bill go to the premium channels? No.
Are you sure? Do you have a valid trusted source that says that no portion of the cost of carrying premium channels is paid for by non-premium channel subscribers? Not once cent?
 
#385 ·
unixguru said:
Blah blah TV distribution is totally different blah blah. Greed is universal. Things are getting ripe.
You are missing the huge difference. Manufactured goods can be cranked out in an assembly line along with man power being replaced with automated machines or cheap outsourced labor. TV is not just distribution, those shows you enjoy require a cast and crew. Even things early in the development cycle cost money. For every Game of Thrones there's The Corrections. Even if a show never makes it to air or is cancelled after several episodes the people involved in making the pilot and all the unaired episodes still get paid. The iTunes's, Netflix's, Vudu's and Amazon Prime's don't get their content until after the development is done and they're a proven success on television or when it comes to the failures, if they're included as part of a bulk deal with someone like 20th Century Televison or Warner Bros.
unixguru said:
Obfuscation.

Does a portion of every subscribers bill go to the premium channels? No.
The revenue Turner generates from other networks like TNT and TBS are shared with CNN, which you mentioned you do watch. (Some money generated from HBO gets in the mix further up along the Time Warner line too)

The media companies do not isolate the revenue from each network, the revenue Discovery generates from Shark Week on Discovery Channel and Honey Boo Boo on TLC is shared with BBC America, Science, Military Channel and Velocity. The revenue MTV gets from Jersey Shore and Teen Mom and Nickelodeon gets from Spongebob and iCarly is shared with their other networks to develop and acquire series for their cheaper digital nets like TeenNick, Nicktoons, Nick Jr, Logo, VH1 Classic and Centric.
 
#386 ·
James Long said:
Are you sure? Do you have a valid trusted source that says that no portion of the cost of carrying premium channels is paid for by non-premium channel subscribers? Not once cent?
Nobody that knows the answer is going to say. (And no, I don't know.)

In the big picture do I pay more for ESPN that I don't watch than a non-premium subscriber pays for premiums? I can't see how the answer can be anything other than yes.

If the answer is no then I wager there are a whole lot more non-premium subscribers that should be even more upset.
 
#387 ·
KyL416 said:
You are missing the huge difference. Manufactured goods can be cranked out in an assembly line along with man power being replaced with automated machines or cheap outsourced labor. TV is not just distribution, those shows you enjoy require a cast and crew. Even things early in the development cycle cost money. For every Game of Thrones there's The Corrections. Even if a show never makes it to air or is cancelled after several episodes the people involved in making the pilot and all the unaired episodes still get paid.
I am well aware of that. I continue to contend that I could pay more for the programs I watch that would provide the same level of funding for the shows I watch and cost me less overall.

The easiest comparison is movies. The hits pay for the flops there to. Yet each and every one is priced separately.

KyL416 said:
The revenue Turner generates from other networks like TNT and TBS are shared with CNN, which you mentioned you do watch.
We watch very little CNN and if it cost me $1/mo I wouldn't watch it at all. We never watch TNT or TBS. So there are some of the high-end wholesale costs involved in forced packages.
 
#388 ·
KyL416 said:
You are missing the huge difference. Manufactured goods can be cranked out in an assembly line along with man power being replaced with automated machines or cheap outsourced labor. TV is not just distribution, those shows you enjoy require a cast and crew. Even things early in the development cycle cost money. For every Game of Thrones there's The Corrections. Even if a show never makes it to air or is cancelled after several episodes the people involved in making the pilot and all the unaired episodes still get paid.
I used to do engineering in a very large high-tech R&D company. Those products that come off those assembly lines also had a massive investment and risk to develop with no guarantee they would be successful.

The cost of a typical "TV" show from pre-development to distribution is peanuts compared to the lifecycle cost of developing - and supporting - most technology products. Especially if you consider how technology builds upon prior technology over and over and over again. If you were to sum together the cost of all that development it would be shocking.

Do you think the creative process is any different for coming up with and evolving new technology products? It's actually much harder as there are far more details and real hard limits of physics, etc.

When you talk about manufacturing of technology products you are looking at the cheapest stage. Similar to distributing a TV program.

There is no reasonable argument that entertainment should be treated completely differently.
 
#389 ·
sigma1914 said:
Over half the homes in America with TV don't have a DVR...so they're live viewers. Now, factor in those with a DVR who still watch live and the numbers increase. You make it seem like it's the norm when it's not.

http://rbr.com/dvr-penetration-raising-eyebrows/
I'm curious how much TV the average homes without a DVR watches.
 
#390 ·
unixguru said:
I used to do engineering in a very large high-tech R&D company. Those products that come off those assembly lines also had a massive investment and risk to develop with no guarantee they would be successful.
So true. I find it amusing how some people think that the total cost associated with making a widget is the cost of the actual manufacturing process. This false belief is what leads people to erroneously think that the TV industry is somehow different than other industries. Because if the final product is something you can't touch then it must be magic! :lol:
 
#391 ·
pdxBeav said:
So true. I find it amusing how some people think that the total cost associated with making a widget is the cost of the actual manufacturing process. This false belief is what leads people to erroneously think that the TV industry is somehow different than other industries. Because if the final product is something you can't touch then it must be magic! :lol:
Ignorance is seldom amusing..... R+D, testing, QA are all part of the cost to get something out and into the market place, but after a few million units, those costs have been pretty well absorbed in the unit price.

The TV industry is not like all other industries, nor is it totally unique from all others. One reason why most analogies fail.
 
#392 ·
unixguru said:
I used to do engineering in a very large high-tech R&D company. Those products that come off those assembly lines also had a massive investment and risk to develop with no guarantee they would be successful.

The cost of a typical "TV" show from pre-development to distribution is peanuts compared to the lifecycle cost of developing - and supporting - most technology products. Especially if you consider how technology builds upon prior technology over and over and over again. If you were to sum together the cost of all that development it would be shocking.

Do you think the creative process is any different for coming up with and evolving new technology products? It's actually much harder as there are far more details and real hard limits of physics, etc.

When you talk about manufacturing of technology products you are looking at the cheapest stage. Similar to distributing a TV program.

There is no reasonable argument that entertainment should be treated completely differently.
Manufacturing, with its associated R&D, engineering, marketing, etc. costs has absolutely nothing to compare with TV production and distribution. Ok, there are a few similarities. Marketing. The pitch.

After that, think about doing all the R&D and engineering necessary to develop and produce a new product EVERY week. Or every NIGHT! There is no economy of scale as there is in manufacturing. You can amortize all that R&D across many products, each with a manufacturing cycle of many thousands or millions of units to be sold.

TV is human intensive, just like the R&D and engineering portion of product development. But once the robots get it, there is very little human knowledge worker involvement. Sure, a few people on the assembly line, but no knowledge worker required. Just people who are patiently able to do the same thing again, and again, and again, and again, thousands of times a day.

Tell me you can product a whole new product 22 times a year. The script is empty. The page is blank every new week.

And every week CBS has to make 38 new products: 7 news products, 21 prime time products, plus 10 late nite products. Every one of them is brand new, 22 weeks out of the year. (Some 52 weeks.) Tell me how your R&D started with a blank page every week. There is no comparison.

Peace,
Tom
 
#393 ·
Tom Robertson said:
Manufacturing, with its associated R&D, engineering, marketing, etc. costs has absolutely nothing to compare with TV production and distribution. Ok, there are a few similarities. Marketing. The pitch.

After that, think about doing all the R&D and engineering necessary to develop and produce a new product EVERY week. Or every NIGHT! There is no economy of scale as there is in manufacturing. You can amortize all that R&D across many products, each with a manufacturing cycle of many thousands or millions of units to be sold.
No difference. You can amortize the TV show over many thousands or millions of TV viewers watching each episode.

Tom Robertson said:
TV is human intensive, just like the R&D and engineering portion of product development. But once the robots get it, there is very little human knowledge worker involvement. Sure, a few people on the assembly line, but no knowledge worker required. Just people who are patiently able to do the same thing again, and again, and again, and again, thousands of times a day.
Once TV production is done then the computer gets it and it's broadcast with little human knowledge worker required. Just people who are trained to make sure the broadcasts get transmitted hour after hour after hour.

Tom Robertson said:
Tell me you can product a whole new product 22 times a year. The script is empty. The page is blank every new week.

And every week CBS has to make 38 new products: 7 news products, 21 prime time products, plus 10 late nite products. Every one of them is brand new, 22 weeks out of the year. (Some 52 weeks.) Tell me how your R&D started with a blank page every week. There is no comparison.

Peace,
Tom
I don't think anyone would argue that writing scripts is hard work, but so are most other jobs. Nobody has shown why it's harder or more challenging to produce TV content than other widgets.
 
#395 ·
pdxBeav said:
No difference. You can amortize the TV show over many thousands or millions of TV viewers watching each episode.

Once TV production is done then the computer gets it and it's broadcast with little human knowledge worker required. Just people who are trained to make sure the broadcasts get transmitted hour after hour after hour.

I don't think anyone would argue that writing scripts is hard work, but so are most other jobs. Nobody has shown why it's harder or more challenging to produce TV content than other widgets.
Excellent points.

Yet...

Yes, easy to write a script. Seems like everyone writes one script or novel in their lifetime.

Hard to write a great script. One that would be a single episode of Big Bang Theory and garner millions in ad dollars. That is where it's tough.

Then the acting, directing, costumes, score, etc., etc. Every week.

Everyone can play football. Few can play well enough to be in the NFL.

Whereas manufacturing is about making millions of units.

Peace,
Tom
 
#396 ·
pdxBeav said:
No difference. You can amortize the TV show over many thousands or millions of TV viewers watching each episode.

Once TV production is done then the computer gets it and it's broadcast with little human knowledge worker required. Just people who are trained to make sure the broadcasts get transmitted hour after hour after hour.

.
Live sports / live TV needs a lot more work.
 
#397 ·
Again I find myself going back to a point made many pages ago...all the comparisons to high tech manufacturing, supermarkets or even water buffaloes (that one made me giggle, thanks Hoosier) miss the most important salient point: we, the viewers, are not the real customers.

The TV industry (the producers, creative teams, actors, directors, makeup artists, camera people, etc.) all work to produce a product that we never buy. Rather, it is sold to advertisers. The car companies, the fast food chains, the perfume makers, the household cleaner manufacturers, THAT is the industry's customer. They are in the business of selling advertising time. The content they produce is previewed to the advertisers and, if they think it might attract viewers, they buy the advertising space within it. We are no more the customers of the content producers than the bees are the customer of the bee keeper.

The only influence we have is whether we watch a given program or not. If few people watch (if the bees don't colonize the hive) the network fails to deliver the promised "impressions" (no honey is produced) and the advertisers don't pay (no honey gets sold). The more households that receive a channel (the more hives that are built) the greater the chance someone in that household will watch the channel's show (the greater the chance bees will colonize a hive). That means that the only goal the network has for distribution is to insure that it can get into the greatest number of households.

Al-a-carte pricing is like leaving it up to the bees to decide where to place a hive and how big to make it. While that's nice for the bees, it can't support a commercial honey industry. Likewise, letting viewers restrict the channels they might watch to only the channels they know they will watch can't support the TV industry since it limits the number of impressions the networks can promise to advertisers. This further erodes their revenue stream, already damaged by the "DVR discount" advertisers already factor into their buying decisions.

Sure, we pay the MCOs to deliver all this programming, wrapped up in a nice service, with a program guide and all sorts of extra services, just like the bees go out and collect the pollen and bring it back to the hive. There is no incentive for MCOs to fight for al-a-carte since it will make their business more complicated and less profitable, just like beekeepers trying to harvest honey only from natural hives in the wild. In both cases, it is not a sustainable business model.

What I have yet to see from anyone that thinks al-a-carte can work is for them to actually run the numbers. Take any of the widely distributed channels like TNT, or USA, or FX, or MTV and show how, in an al-a-carte world even really popular channels don't end up reaching a small fraction of the households and potential viewers they do today.

Remember that the basic issue here is that even the most outstanding and amazingly entertaining program ever produced will make no money if it is on a channel that only 2 million homes receive. Therefore, new programming would end up being restricted to the handful of channels that every household would end up buying. We already had that model...it was called broadcast TV circa 1965.
 
#398 ·
unixguru said:
Obfuscation.

Does a portion of every subscribers bill go to the premium channels? No.
Depends on how widely you look. ESPN is part of Disney Media, which is part of the Walt Disney Company which owns Disney Studios. So the money from ESPN, at least in part, helps support the production of films that you see on the premium channels.

From a commercial point of view, the larger entertainment industry is an overwhelming success. The US exports entertainment in vast quantities. Our films, music, TV shows, books and magazines are eagerly consumed by people all over the world. The wealth of entertainment options available to the average American is the envy of the world. When you compare what we have, and what it costs, to the options available elsewhere, you'll soon find that what we have is a relative bargain.
 
#399 ·
Tom Robertson said:
Manufacturing, with its associated R&D, engineering, marketing, etc. costs has absolutely nothing to compare with TV production and distribution. Ok, there are a few similarities. Marketing. The pitch.

After that, think about doing all the R&D and engineering necessary to develop and produce a new product EVERY week. Or every NIGHT! There is no economy of scale as there is in manufacturing. You can amortize all that R&D across many products, each with a manufacturing cycle of many thousands or millions of units to be sold.

TV is human intensive, just like the R&D and engineering portion of product development. But once the robots get it, there is very little human knowledge worker involvement. Sure, a few people on the assembly line, but no knowledge worker required. Just people who are patiently able to do the same thing again, and again, and again, and again, thousands of times a day.

Tell me you can product a whole new product 22 times a year. The script is empty. The page is blank every new week.

And every week CBS has to make 38 new products: 7 news products, 21 prime time products, plus 10 late nite products. Every one of them is brand new, 22 weeks out of the year. (Some 52 weeks.) Tell me how your R&D started with a blank page every week. There is no comparison.
Tom Robertson said:
Excellent points.

Yet...

Yes, easy to write a script. Seems like everyone writes one script or novel in their lifetime.

Hard to write a great script. One that would be a single episode of Big Bang Theory and garner millions in ad dollars. That is where it's tough.

Then the acting, directing, costumes, score, etc., etc. Every week.

Everyone can play football. Few can play well enough to be in the NFL.

Whereas manufacturing is about making millions of units.
You assume that it's a physical product. You assume that one is made and then everybody other than manufacturing and distributing is done and goes home.

I used to do software engineering. The "product" was a massive expensive pile of bits (just like TV/movies!). A version is released/distributed. Hundreds of people came to work in large buildings for years with massive infrastructure (labs - computers, networks, etc, etc). Many millions of dollars to produce one version. And after a release... start all over again with a lot of new innovation (creativity!) and hard/expensive work to produce the next version. The more successful the product is the more demands there are and the more people/infrastructure is needed for the next version. Innovative products don't come out of grunts writing code that does A+B. Creative people cost more in software too (although they DON'T get rewarded in any comparable way to entertainment). My particular case would be considered a hit (100's of millions of $ a year). Not so different from episodes.

Guess where the "profits" go in software? It isn't to the people working hard to make the product. It goes to executives, middlemen, and shareholders. Not so different from entertainment industry.

Continuing to say that entertainment is mostly different from the real world is just plain wrong. And please don't justify the greed of executives, middlemen, and shareholders with the fictitious expense of the workers making the product.
 
#400 ·
Diana C said:
Again I find myself going back to a point made many pages ago...all the comparisons to high tech manufacturing, supermarkets or even water buffaloes (that one made me giggle, thanks Hoosier) miss the most important salient point: we, the viewers, are not the real customers.

The TV industry (the producers, creative teams, actors, directors, makeup artists, camera people, etc.) all work to produce a product that we never buy. Rather, it is sold to advertisers. The car companies, the fast food chains, the perfume makers, the household cleaner manufacturers, THAT is the industry's customer. They are in the business of selling advertising time. The content they produce is previewed to the advertisers and, if they think it might attract viewers, they buy the advertising space within it. We are no more the customers of the content producers than the bees are the customer of the bee keeper.

The only influence we have is whether we watch a given program or not. If few people watch (if the bees don't colonize the hive) the network fails to deliver the promised "impressions" (no honey is produced) and the advertisers don't pay (no honey gets sold). The more households that receive a channel (the more hives that are built) the greater the chance someone in that household will watch the channel's show (the greater the chance bees will colonize a hive). That means that the only goal the network has for distribution is to insure that it can get into the greatest number of households.
Then the content should be free. You have said that the content is 40%+ of Premier subscription. And that doesn't make us a customer as well?

Diana C said:
Sure, we pay the MCOs to deliver all this programming, wrapped up in a nice service, with a program guide and all sorts of extra services,
At a high cost with little free market influence.

Diana C said:
Depends on how widely you look. ESPN is part of Disney Media, which is part of the Walt Disney Company which owns Disney Studios. So the money from ESPN, at least in part, helps support the production of films that you see on the premium channels.
Which also means ESPN helps put movies in the theaters. So what? By that logic, if I buy an HP computer I have helped support the production of Windows that you run. (Which I pay for even if I don't use Windows on it.)

Diana C said:
From a commercial point of view, the larger entertainment industry is an overwhelming success. The US exports entertainment in vast quantities. Our films, music, TV shows, books and magazines are eagerly consumed by people all over the world. The wealth of entertainment options available to the average American is the envy of the world. When you compare what we have, and what it costs, to the options available elsewhere, you'll soon find that what we have is a relative bargain.
Replace entertainment with "software" and your statement holds as well. Still does nothing to justify anticompetitive business practices.
 
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