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Supreme Court decsion may effect Tivo?

Discussion in 'TiVo Coffee House - TiVo Discussion' started by eboydog, Apr 21, 2014.

  1. unitron

    unitron Active Member

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    I read somewhere recently that local broadcasters are forced to kick back some of the retrans money they get to whichever network it is with which they are affiliated.

    Everywhere you turn these days, rentseekers.
     
  2. lessd

    lessd Active Member

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    The networks don't want to have any more loss of control of their public free signal than they have to. Technology does make some older laws hard to understand and interpret hence the SC, if people on this Thread could not argue so passionately on both sides of this the case, this case would have never made it to the SC.
     
  3. May 1, 2014 #203 of 323
    bicker

    bicker bUU

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    Because so many people are so pathologically hateful toward taxes that even ignorant of the other aspects of the issue, they will choose the option that doesn't have taxpayers paying the cost of operating television stations.

    IMHO, that's a good thing. A balancing of both sides, liberal in the interest of human decency and conservative with regard to non-essential things like ESPN and HBO.

    We'll have to agree to disagree about that.
     
  4. May 1, 2014 #204 of 323
    aaronwt

    aaronwt UHD Addict

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    If Aereo wins all the cable companies would need to do is setup a similar system and then they could avoid retransmission fees altogether.
     
  5. May 1, 2014 #205 of 323
    Diana Collins

    Diana Collins Well-Known Member TCF Club

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    The broadcasters are NOT hostile towards Aereo...they are terrified by it's business model. If the court holds that Aereo is not reqired to pay retransmission fees, then EVERY cable and satellite system in the country will adopt the same approach. I don't see how the court can hold that Aereo is doing something different than cable except by citing the mechanics of what they are doing. That would make cable and satellite eligible to do the same and also avoid the fees. This will completely eliminate a revenue stream that the stations and networks have come to depend upon.

    If, on the other hand, Aereo is found to be subject to retransmission fees then the broadcasters would embrace Aereo as a way to extend their market. Therefore, there is no reason to expect that the fees charged Aereo will exceed those paid by cable and satellite operators (indeed, they might even be less).

    Whatever opinion one may have about the logic or equity of the law, retransmission fees are the result of, among other things, DVRs. There were discussions on boards just like this one, back in the late 1990's about how DVRs would erode advertising rates and that broadcasters would find some way to make up the difference. Product placements and retransmission fees were a couple of the ways they developed. You can consider retransmission fees as part of the cost of skipping commercials.

    This is the fundamental concept that gets lost in most discussions on this subject. OTA broadcasts are NOT free. Inherent in the OTA model is a "contract" between the broadcaster and the government (IOW, the station's license) that grants to the broadcaster the right to use a given set of frequencies, and to insert advertising into their broadcasts to pay for the cost of operations and content development. The amount of money the station charges advertisers is directly tied to the number of viewers that actually see the advertisement. Advertisers have, for the past several years, been discounting a program's ratings by the percentage of viewers with DVRs. In 2008 only about a quarter of households had DVRs while today almost half do. Add in people watching via Netflix and Amazon, and to lesser extent Hulu, and suddenly even immensely popular shows don't bring in the advertising revenue that mediocre success did 10 years ago. That missing revenue has to come from somewhere, since it isn't getting any cheaper to run a TV station.

    Since the model where advertising paid for broadcast TV is no longer working, the only way to keep broadcasting alive was to find a different model. Just like any cable channel, the cable and satellite operators have to pay to carry the channel. That is the new business model. Forget about the "public airwaves" arguments - they are irrelevant. Forget about the fact that the broadcasts are unencrypted and free to recieve - also irrelevant. There is no such thing as "free TV" - either advertisers pay for it, or you do (or, more commonly, a bit of both).
     
  6. May 1, 2014 #206 of 323
    dlfl

    dlfl Cranky old novice

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    Not sure that applies to a discussion of retrans fees (which technically are not taxes), but responding to the statement per se:

    So many people are hateful toward taxes because they know there are so many people, roughly 50% of federal income tax payers, who pay no net federal income tax at all, and thus are prone to favor increased spending (and thus increased debt and/or taxes) even ignorant of the other aspects of the issue -- since there is no cost to them.
     
  7. May 1, 2014 #207 of 323
    dlfl

    dlfl Cranky old novice

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    I hope you're right but the broadcasters would know they have Aereo over a barrel and that kind of power tends to drive fees up -- just because they "need" the money and they can do it.
    Even if one accepts the validity of this concept, consider this quote from an earlier post of mine:
    With this kind of exponential growth of fees, the business model is going to collapse of its own weight. We're going to have to find a new way to accomplish the public benefits of broadcast TV stations, instead of one that amounts to massive transfer payments from cable and satellite subscribers to antenna watchers.
     
  8. May 1, 2014 #208 of 323
    Diana Collins

    Diana Collins Well-Known Member TCF Club

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    They have cable and satellite over the same barrel. The fees charged Aereo will very likely be commensurate with those charged to Time Warner Cable or any other operator.

    I don't argue with what you're saying, but I think there is a LOT of elasticity still in the market. Even if the sum of retransmission fees reached $10 per subscriber (about 4 times or more what they average today) I don't think the model will collapse. The truth is we don't know at what price we hit the ceiling for TV entertainment. Prices have risen, across the board, quite steadily year after year. When you see what ESPN and regional sports networks are pulling in, and consider how much sports coverage (particularly pro football) is on OTA broadcast TV, I think the ceiling for retransmission consent fees is still quite a ways off.
     
  9. May 1, 2014 #209 of 323
    bicker

    bicker bUU

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    There's no reason to believe that: ESPN charges cable companies $24.4B per year - that's one channel that charges eight times as much as all the local channels combined. And there are dozens and dozens of cable channels that charge fees to multi-channel video programming distributors. The retransmission fees aren't going to break the multi-channel video programming distributors' business model.
     
  10. May 1, 2014 #210 of 323
    Bigg

    Bigg Active Member

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    Wow, good catch. I missed the part about the OTA stations "going dark". First of all, they are not just going to shut down and lose millions and millions and millions of dollars as some sort of political stunt. Second of all, if for some reason they feel threatened by Aereo itself, which is a ridiculous concept, they would take a more graceful path to moving the higher value content off to affiliated cable channels, and then backfilling with low-value syndicated content that they can still make money on with an OTA distribution system. They are not just going to go dark overnight. That's crazy fear mongering talk. The networks might threaten that, but it's ultimately a (mostly) empty threat. The real threat is an increase in the pace of moving content to cable, which is already happening.

    The problem is, there is no truly liberal national platform or politicians, outside of a couple of representatives, but that's another story...
     
  11. May 1, 2014 #211 of 323
    Bigg

    Bigg Active Member

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    Unfortunately my POS Macbook Pro eat part of my post (it randomly shuts off due to a failed battery what a POS), so I'll try to get back on my original train of thought here.

    First of all, satellite can't, because they have to distribute with a single stream. Secondly, cable could do it, in theory, but it would require a separate VOD stream for every single sub watching a local channel, which in and of itself would be extremely bandwidth intensive. The middle of the network would be insane, in terms of bandwidth requirements, especially during something like the Super Bowl, with most of the customers in a given area all watching copies of the same thing. And then they'd have to build an antenna farm like Aereo's, but on a way bigger scale. The bottom line is that even if they could engineer something like that, it would end up costing far more than the retransmission fees do in the first place. The broadcasters really have nothing to worry about.

    There is no such thing as free TV, but plenty of people still watch the commercials, and yes, some content is moving off to cable.
     
  12. May 1, 2014 #212 of 323
    Dan203

    Dan203 Super Moderator Staff Member TCF Club

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    When will we actually have a ruling on this?
     
  13. May 1, 2014 #213 of 323
    lessd

    lessd Active Member

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  14. May 2, 2014 #214 of 323
    bundrell

    bundrell New Member

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    As recently as 2010 they passed the Satellite Television Extension and Localism Act (currently in the House for reauthorization) which imposed the "carry one, carry all" requirement on satellite operators (in order to carry ABC, NBC, CBS and FOX they must also carry EVERY channel that asks and can deliver a signal to the POP - and pay for the privledge).
     
  15. May 2, 2014 #215 of 323
    slowbiscuit

    slowbiscuit FUBAR

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    Yep, that was mentioned a while back in this thread. Might want to go back and read through it.
     
  16. May 2, 2014 #216 of 323
    JosephB

    JosephB Member

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    That is currently the law now, except channels that demand carriage under must carry cannot also demand a retransmission fee.

    If they allowed must-carry stations to also charge a retransmission fee, that would be ridiculous. Rates would then go through the roof, and I think that would be the straw to break the cable companies' backs
     
  17. May 2, 2014 #217 of 323
    Diana Collins

    Diana Collins Well-Known Member TCF Club

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    Depends on what (legally) makes Aereo different from what cable and satellite operators are doing now, and how that is recognized and written into the Court's decision. At a minimum, they could do exactly what Aereo is doing, including using the internet to delivery the content. Perhaps satellite might have a problem, since they have a higher percentage of households with slow or no broadband service in their customer base, but cable could do it quite easily (or at least as easily as Aereo). Bandwidth consumption is as much a problem for Aereo as anyone else. Not to mention the possibility, if Aereo's service were to catch on, of the cable operators and other ISPs throttling Aereo's traffic to an unacceptably slow rate.

    The more one looks at it, and plays out the long term ramifications, the more Aereo seems like a short term solution.
     
  18. May 2, 2014 #218 of 323
    telemark

    telemark New Member

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    During oral arguments, the first line of questioning was whether Aereo is a Cable Company and it was suggested then the issue might be remanded.

    If the justices decide to remand we will have to wait for another appeal before having finality on this case.
     
  19. May 2, 2014 #219 of 323
    Bigg

    Bigg Active Member

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    The whole point of Aereo, and the reason that it is legal under current law is that each subscriber gets their own fee. That's the whole point behind Aereo, and why they can legally do what they are doing.

    If they used the internet, they would have to replace almost all of the STBs out there with IP-capable boxes, and then it would still use the same amount of bandwidth, as every user would still need their own feed. It just doesn't scale. No matter what format it gets to the consumer in, it doesn't scale.

    Cable companies are far less incented to do this than Aereo, as Aereo doesn't pay for the last mile bandwidth, whereas if Comcast goes to an Aereo-like solution (imagine scaling Aereo for tens of millions of users- WHOA), then they have to pay for the additional bandwidth, as they forced the change, not the consumer.

    With satellite, many users don't have fast enough internet or a good enough network or the right hardware to pull this off. If it was optional, the adoption rate would be low, and it would still end up costing just about as much, if not more, to do with kludgy work-around than it would to just pay the retrans fees. The only thing that broadcasters should be worried about is the satellite companies going out and putting antennas up, but Aereo has nothing to do with that.

    The bottom line is that making a kludgy Aereo-like hackaround is going to cost more than just paying retransmission fees. There's no way around that.
     
  20. May 3, 2014 #220 of 323
    lessd

    lessd Active Member

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    You have to stop saying it is legal under current law as this case would not have gotten to the SC if your statement were so obviously true. Your not on the SC so your option on the law means nothing as does my option. 9 people will make that decision about this law, not you, or me, or anybody else.
     

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