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mhhf1ve
mhhf1ve
8/12/2016 6:51:33 PM
User Rank
Platinum
Re: OTT channels?
> "a more fragmented OTT video market = better scenario for pay TV providers"

I'm not sure I follow this thesis. If I understand correctly, this only really works out if consumers really don't like a la carte options for their video content. If ESPN goes OTT and other premium or live event video apps launch, then I'm not so sure what Pay-TV is good for unless it actually provides discount-price bundless of channels? 

Sure, it's annoying to have to seek out an HBO GO app and a AMC app and figure out if Netflix or Amazon has the rights to the previous seasons of a show you want to watch -- but if it's a choice between $9/mo or a cable bill that's nearly $200/mo...... 

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JohnBarnes
JohnBarnes
8/13/2016 7:24:50 PM
User Rank
Platinum
Re: OTT channels?
Adi,

I think the more conventional economic interpretation is that a highly fragmented a la carte market means fewer choices, cheaper (the Price's Law extreme of the curve -- it's almost free but there's not much to pick between and it tends strongly to the bland), where a bundled and barriered market is much more niche-, innovation-, and diversity-friendly.  When American Magazine Distributors went out of business in the 1950s they were a near-monopoly but they offered literally thousands of combo packages to newsstands; hundreds of magazines survived only because the newstand had to buy several packages to get TIME, LIFE, NEWSWEEK, LOOK, SATURDAY EVENING POST, etc. and all those other mags were bundled with them.

The abrupt collapse killed maybe 2/3 of the nationally distributed magazines in the US, but the big ones actually declined in price in real dollar terms for most of the decade following. And the newsstand was a lot less fun to go to.

I really wonder if the media pundits of 2035 will be looking back and saying "What really killed the Second Golden Age of Television was undoubtedly XOTT's decision to offer 'full a la carte' single channel packages..."

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