So what happens when the Deathstar takes over Time Warner?
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I don't think anyone can predict how things with the big 4 networks are going to shake out since there's a lot of uncertainty about the future. The networks will keep making the local affiliates pay more money, the local affiliates will keep making the cable/satellite/streaming operators pay more money, and the cable/satellite/streaming operators will keep charging customers more and more for locals.
Every dollar the rates go up, the more the "hassle" of putting up an antenna becomes worth it to consumers. ATSC 3.0 has features that may allow people who currently can't get OTA to get it in a few years. It uses OFDM modulation which is much better at resisting multipath interference, and single frequency networks - if affiliates actually implement them - will make it easier for people in places that have poor/no reception to get great reception.
My only question is - what's the incentive for local stations to go to the expense of implementing single frequency networks...they talk about it a lot but it seems like a net loss for them. They spend money so that more people can pick up their signal for free, instead of paying for it through an MVPD who then pays the local station.
Another factor is whether streaming MVPDs will do like Sling and make it easy to integrate OTA so people who don't want to pay for local stations and can't get them through the streamer of their choice can put an antenna.
Like I said, a lot of uncertainty... If I owned a local station group the only SFNs I'd approve would be to replace translators, but I wouldn't want to improve coverage at all. And I'd make damn sure that when I negotiated with MVPDs that I required them to pay me based on their total number of subscribers, not their total number of subscribers who have a package including locals - to prevent them from letting people save money by dropping locals and using an antenna. Those seem like obvious business decisions, but who knows maybe there's something I'm missing.
Every dollar the rates go up, the more the "hassle" of putting up an antenna becomes worth it to consumers. ATSC 3.0 has features that may allow people who currently can't get OTA to get it in a few years. It uses OFDM modulation which is much better at resisting multipath interference, and single frequency networks - if affiliates actually implement them - will make it easier for people in places that have poor/no reception to get great reception.
My only question is - what's the incentive for local stations to go to the expense of implementing single frequency networks...they talk about it a lot but it seems like a net loss for them. They spend money so that more people can pick up their signal for free, instead of paying for it through an MVPD who then pays the local station.
Another factor is whether streaming MVPDs will do like Sling and make it easy to integrate OTA so people who don't want to pay for local stations and can't get them through the streamer of their choice can put an antenna.
Like I said, a lot of uncertainty... If I owned a local station group the only SFNs I'd approve would be to replace translators, but I wouldn't want to improve coverage at all. And I'd make damn sure that when I negotiated with MVPDs that I required them to pay me based on their total number of subscribers, not their total number of subscribers who have a package including locals - to prevent them from letting people save money by dropping locals and using an antenna. Those seem like obvious business decisions, but who knows maybe there's something I'm missing.
- Nov 29, 2003
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The DOJ says it was outgunned and outspent during the recent trial over AT&T's $86 billion acquisition of Time Warner. That blockbuster deal was recently approved after a lengthy lawsuit thanks in large part to US District Court Judge Richard Leon, who based his ruling on a comically-narrow reading of the telecom and media markets. For example, at no point in his 172-page ruling did Leon even address the potential combined anti-competitive problems caused by the combination of merger mania, regulatory capture and the death of net neutrality.
DOJ Tries to Blame CNN For Losing AT&T Merger Case
DOJ Tries to Blame CNN For Losing AT&T Merger Case
None of which have anything to do with this simple merger of a content maker company and a content delivery company.
Do you actually know what regulatory capture is?
- Nov 29, 2003
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So that would be a no, then.
Regulatory capture is an economic theory, mostly held by conservatives and libertarians, where big players in an extractive or manufacturing industry quietly advocate for a regulation which they, due to economies of scale, can easly comply with in order to shut out smaller players.
It has no or nearly no application to broadcasting. It certainly has nothing to do with this simple merger of a content company and a delivery company, which, umm, generated no regulations at all.
Regulatory capture is an economic theory, mostly held by conservatives and libertarians, where big players in an extractive or manufacturing industry quietly advocate for a regulation which they, due to economies of scale, can easly comply with in order to shut out smaller players.
It has no or nearly no application to broadcasting. It certainly has nothing to do with this simple merger of a content company and a delivery company, which, umm, generated no regulations at all.
I wonder how much Trump has to do with this decision, https://seekingalpha.com/news/3369814-doj-appealing-and-t-time-warner-merger-approval#email_link? If the DOJ loses again can AT&T sue uncle Sam for their legal costs?
Yes, good points. I've read (and posted) a lot about ATSC 3.0 over the past few years. And I've gone from being excited/hopeful about the technological advances that ATSC 3.0 will bring (free 4K HDR content; improved reception in homes; free OTA TV on mobile phones; interactivity via an internet-based return path) to being increasingly skeptical (or at least uncertain) about the future of free OTA TV, and the longstanding network/affiliate model, from a business perspective.
Because, as you say, what incentive is there really for local broadcasters to improve the quality and ease of reception of their signals, since that would only encourage more cord-cutting and thereby reduce the amount of retransmission money they get paid by MVPDs? And yet many of the biggest broadcast groups, including Sinclair and Nexstar, seem quite gung-ho on 3.0. Why?
Apparently they think that the benefits outweigh the risks. I think that they see more and more US consumers dropping MVPDs and going to streaming services, which could potentially harm their retrans compensation due to reduced subscriber numbers. They also see that their network partners are embracing their own paid streaming services -- Hulu and CBS All Access -- as online homes for their content, largely cutting the local network affiliates out of the picture. So if retrans comp is going to eventually trend downward (although, so far, it's only been going up, as rate increases offset declines in subscriber numbers), local broadcasters figure that they can make up for that with more ad money (along with using their 3.0 spectrum for businesses other than free TV, such as IoT datacasting and various subscription services).
They figure they'll get more ad money in two ways with 3.0: through greater OTA viewership (thanks to improved signals, as well as viewing on phones) and through internet-delivered targeted ads, which fetch higher rates from advertisers. To me, embracing 3.0 looks like local broadcasters saying "We can't sit by while video increasingly shifts to online apps, away from us. We have to take our futures into our own hands, regardless of what our network partners do." And, frankly, support for 3.0 among the networks (who, of course, do own a lot of their affiliates in large markets) has been between lukewarm and non-existent. As I say, it's been the large non-network broadcast groups (Sinclair, Nexstar, Scripps, etc.) who loudly promote 3.0.
So let's say that 3.0 is as good as its promoters say it will be. (And the real-world technical tests so far are promising.) With retrans fees continuing to rise, while 3.0 makes it easier than ever to get high-quality TV from ABC, NBC, CBS and Fox for FREE (with better picture quality than you might get from cable, satellite, etc.), then surely that would only add fuel to the cord-cutter fire. As you mentioned, yes, MVPDs could begin optionally offering STBs based on Android TV (or other platforms) that can integrate free OTA TV alongside their own pay TV in a unified program guide/DVR, thereby letting the MVPD drop that $8 "broadcast fee" from your bill. Sinclair, Nexstar, etc. may be OK with that, given their increased ad revenue and other 3.0-related revenue streams, but I don't see the networks being happy about it. Because a big chunk of that retrans money get passed from the local affiliates back to the networks in exchange for the right to air their content. And that amount would eventually go down as cord-cutting goes up. (At some point, increasing per-sub retrans rates will result in less, not more, total retrans money as higher fees only encourage more cord-cutting.)
So then you're in a situation where both sides -- the networks with their OTT services like Hulu; and the local affiliates with ATSC 3.0 -- are making strategic moves that undermine the other. And look at other developments we're seeing among local broadcasters. It's very common for them to put the local news content that they own online for free (with ads) through their own apps and/or third-party apps that aggregate news from lots of stations. We're also seeing large broadcast groups developing national content to be shared among their stations, in effect acting like their own network. And news just came out that Sinclair is taking their own national content production to the point where they're going to launch their own OTT service that will feature news/opinion (right-wing competition for Fox News), plus series and movies.
In the end, I believe that pretty much all content is going to be delivered OTT direct from the content owner to the consumer. And that ultimately means a breakdown in the very old national network/local OTA broadcaster model. I think you're going to see Disney pulling back more and more of their content spending from ABC and toward Hulu and their forthcoming Disney-branded OTT service. Likewise with CBS and their Showtime and CBS All Access services. (Also, midsized CBS Corp. is ripe for getting acquired by one of the FAANG tech giants and/or merging with another midsize media player like Lionsgate or Sony.) Fox is basically getting out of the expensive content game, selling their film and TV production arms to Disney, and they'll focus their Fox network more on cheap-to-produce news, talk, reality, and game show stuff, plus sports (which, due to their popularity and live-broadcast nature, are increasingly what's keeping broadcast TV afloat). It's rumored that NBC wants to launch their own OTT streaming service and I suspect that they'll sell off their 30% stake in Hulu once Disney becomes the majority owner. So NBC will have an entertainment service that competes against Hulu and CBS All Access, which they'll offer nationwide OTT and probably seek to bundle in with their Xfinity cable TV packages. What happens to the major sports broadcast contracts is the ultimate question, because the fate of not just broadcast networks, but linear TV channels in general, largely rests there.
I see ATSC 3 coming because The Money wants it. I can’t say I understand the benefits to ME. I’m sure they will multicast the heck out of it and PQ will suffer. As today, if you want the best PQ and AQ, you’ll use optical media.
And, being the suspicious lout I am, I suspect free OTA will decrease as they make each nickel scream in pain and they promote pay OTA over any free offerings. I see no reason to pay Dish AND for local OTA AND for certain downloads from different sources.
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And, being the suspicious lout I am, I suspect free OTA will decrease as they make each nickel scream in pain and they promote pay OTA over any free offerings. I see no reason to pay Dish AND for local OTA AND for certain downloads from different sources.
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Well this isn't really surprising - the networks and affiliates have had a symbiotic relationship since the 50s, but now that the apple cart is starting to tip over, they will each rush to pick up as many as they can even if it means shoving each other aside, whether or not they believe that if by working together they could pick up more apples in total.
I'm skeptical about Sinclair's move to put news on the net. There's a big difference between putting local news on the net and syndicating stuff for national consumption. People care about what is going on where they live, where's the upcoming road construction, what's this new school bond vote about, they want to hear about the fires, car chases, and so forth, plus high school sports and the weather. For non-local news there are already SO many sources that I don't see how Sinclair could possibly differentiate themselves. But the biggest problem is WHY would someone want to stream a news program rather than go to a web site and watch videos / read stories about what interests them, and ignore the stuff that doesn't? That's simply a far more efficient way of watching the news. Similar to what you might do today if you recorded the news and just FF through stories that don't interest you, but of course that's usually not possible (and certainly nowhere near as easy even where it is possible) when streaming. No doubt Sinclair will want to force people to watch ads even if they let them skip stories they don't care about.
There seems to be little point in having internet versions of the linear model of watching a half hour or hour long news program (not that most of what is on cable is actually 'news' in the traditional half hour evening news sense, it is more people discussing the news, expressing their opinions, spinning, etc.) Had they created an actual cable network, they could have stolen some of Fox's audience - I would think they could use their leverage as owner of many local stations to force MVPDs who want to continue carrying those stations to pick up their network.
Yes. Although I'm not sure that both sides working together would ultimately be in the networks' best financial interest. Let's face it, they're the ones with the high-value content that can be scaled and sold internationally. The fact that the network-affiliate model has lasted this long is probably attributable primarily to the fact that the networks own and operate many of their largest affiliate stations, so they actually do have some vested interest in the current system. Still though, in the end, the value is mainly in content, not the network/transmission system. Content is king.
Yes, I'm skeptical about Sinclair's move as well (as well as less ambitious moves by Nexstar and others, I think I've read, to produce national content for distribution across all their affiliates). Once you move online, you're competing against a sea of other content, the most popular of which comes from international content producers with far deeper pockets and far greater talent pools. It's much easier to draw viewers when you're offering a differentiated product that few others are offering, e.g. news and information specific to a particular metro area. Once you get into more general-interest content intended for a national or international audience, you're suddenly a relatively smaller fish in a much bigger pond.
As for what Sinclair's OTT streaming content will look like, I don't think we really know yet, but I'd be shocked if it was simply an online live stream of a 24/7 news channel. Like all current news websites/apps, I'm sure it will offer up a lot of their recent content as on-demand clips, perhaps with Haystack-like features that allow the user to create a personalized news stream.
It hasn't been a problem with the Comcast merger (so far) because the judge put some restrictions on them for IIRC seven years. The judge for the AT&T/TW merger didn't put any restrictions, so I could see them putting up similar restrictions to what Comcast had. Unwinding the whole deal at this point would be unlikely to the extreme.
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