Linked by Thom Holwerda on Fri 25th May 2012 07:39 UTC
Legal Dish' DVR has an 'auto-hop' feature, which automatically skips commercials on recorded TV. Fox is now suing Dish over this feature, because they claim it will destroy the business model of ad-driven television. "We were given no choice but to file suit against one of our largest distributors, Dish Network, because of their surprising move to market a product with the clear goal of violating copyrights and destroying the fundamental underpinnings of the broadcast television ecosystem," said Fox. This is the photographic film industry suing digital camera makers. It's so utterly absurd I can hardly believe it's for real.
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RE: US vs the World
by Alfman on Sat 26th May 2012 02:34 UTC in reply to "US vs the World"
Alfman
Member since:
2011-01-28

deathshadow,

"Something our friends from overseas may not grasp -- and we've seen it both in Thom's little rant and from a few posters here... is that broadcast TV is FREE in the US to consumers -- it is paid for ENTIRELY by advertising. Blocking advertising removes all broadcast channels income."

I think this needs more elaboration, since it's not accurate for US cable subscribers. It's only truly free for broadcast viewers. However the majority of US viewers are actually cable. They either don't want to fiddle with an antenna every time they change the channel, or they are in a rural/suburban region that has insufficient coverage.

http://tvbythenumbers.zap2it.com/2008/12/03/updated-where-did-the-p...


Cable tv viewers DO pay for broadcast TV programming, even though they are generally included with the basic bundle rather than value added options. They may pay less than premium channels however the fees are multiplied over every single subscriber, even those who don't watch those networks. Another thing to consider is that cable internet users have to pay for basic cable channels even if they're using a dish network for TV. All the businesses here who have cable internet are paying for basic tv even when they don't have a TV. Some of those proceeds go to Fox and other ad supported networks.

http://kimberly-shumway.suite101.com/tv-business-model-explained-a1...

"These cable/satellite providers pay cable networks a monthly fee for each subscriber. According to Broadcasting & Cable, providers pay an average of $.26 for each channel that they offer to customers ('Business model unraveling for TV networks,' 29 December 2009). Some channels cost more, like ESPN which goes for almost $4; others cost less, like MTV2, which goes for a few cents."

"Fox is an illustrative example; for the quarter ended September 2009, its broadcast network reported a 54% drop in operating income while its cable networks reported a 41% increase. NBC's Jeff Zucker has told investors 'the cable model is just superior to the broadcast model'"


Our local cable monopoly apparently pays Fox $70M/year, and fox had threatened to pull it's network if it didn't get $150M. Anyone who watched TV on cablevision during these past few years will probably remember the scrolling banners that networks injected onto their cablevision feeds, telling cable subscribers to call up the cable company and demand they not discontinue the network's programming. Fox is still there, but we lost other basic channels over failed negotiations. All are ad supported channels.


http://www.nytimes.com/2010/10/14/business/media/14fox.html

I think this link is a good read for anyone who wants to understand the fighting over fees that goes on behind the scenes (and sometimes spills over as a scrolling banner on top of the programs people are trying to watch).

Hopefully the link is not behind a paywall for anyone.

Edited 2012-05-26 02:47 UTC

Reply Parent Score: 4

RE[2]: US vs the World
by deathshadow on Sat 26th May 2012 03:44 in reply to "RE: US vs the World"
deathshadow Member since:
2005-07-12

Cable tv viewers DO pay for broadcast TV programming, even though they are generally included with the basic bundle rather than value added options.
an amount that really only covers transmission charges -- case in point:

According to Broadcasting & Cable, providers pay an average of $.26 for each channel that they offer to customers


Let's take... the Commiewealth of Taxachusetts, southern NH and Rhode Island as an example... and use WFXT 25, the local fox affiliate -- which totals by US Census and FCC numbers somewhere around 3.6 million homes; let's highball and say all those homes are paying that 26 cents to have WFXT carried via satellite or cable.

3.6 million * 0.26 = 936 million dollars a month sounds impressive...

But compare to say... the dozen or so prime-time advertising slots averaging $100k/pop PER SHOWING? They make that billion or so in a DAY of advertising. I mean sure, you can run a 30 minute informercial for $5 a pop at 3AM -- daytime and primetime broadcasts? $50k is the low end and how many of those can they run EVERY DAY? Admittedly nailing down rates is tough since cost is DIRECTLY tied to Neilsen ratings and/or expected viewership (see the 2.4 million dollars every 30 seconds superbowl price), you add up the advertising costs over a month, and it makes the fees from cable and satellite providers look like chump change; certainly not enough to operate on without advertisements.

... and it's NOT a difference between networks and their affiliates; two thirds of every minute of advertising is devoted to national ads, the remaining third for local. Even without the broadcast model, the local affiliate is still an essential part of the infrastructure when it comes to news, regional broadcasts, and tailoring of content delivery to the community.

... and that's just talking ONE channel; if we're talking every Fox broadcasting channel -- FX, Faux News, Fox Sports, etc, etc... that's a significant multiplier that makes those fees seem even more pathetic.

Also, I would question that 26 cents given the top 200 over basic plans is typically 15 to 30 bucks more -- I very much doubt they're paying 52 dollars per household for that. A little common sense and reverse engineering can really lay waste to that type of information.

Reply Parent Score: 1

RE[3]: US vs the World
by ilovebeer on Sat 26th May 2012 04:02 in reply to "RE[2]: US vs the World"
ilovebeer Member since:
2011-08-08

... and it's NOT a difference between networks and their affiliates; two thirds of every minute of advertising is devoted to national ads, the remaining third for local.

I'm curious to know where you got those figures from. There's no way you're talking about a 24 hour average so I'd also like to know while time slot that ratio is supposed to refer to.

Even without the broadcast model, the local affiliate is still an essential part of the infrastructure when it comes to news, regional broadcasts, and tailoring of content delivery to the community.

While there's no denying that, for now, local affiliates are still important, you can't ignore the on-going data which shows people are moving away from local tv stations and more towards pay-service & streaming content providers. The playing field is changing shape along with the way people want and receive their "news" & entertainment.

Reply Parent Score: 3

RE[3]: US vs the World
by Alfman on Sat 26th May 2012 06:07 in reply to "RE[2]: US vs the World"
Alfman Member since:
2011-01-28

deathshadow,

"3.6 million * 0.26 = 936 million dollars a month sounds impressive... But compare to say... the dozen or so prime-time advertising slots averaging $100k/pop PER SHOWING? They make that billion or so in a DAY of advertising...."


I'm truthfully having trouble following most of your figures, so I won't attempt a rebuttal.

I wish I had enough money to nonchalantly dismiss hundreds of millions of dollars per year like you do ;)

Reply Parent Score: 2