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ITALIAN926
join:2003-08-16

ITALIAN926

Member

Dilemma?

Who has the answer?, I surely dont. As streaming video , and piracy, continue to erode video revenues for incumbents, how are these companies supposed to make money, and survive? Are they all supposed to go belly up or should they raise rates?
jvanbrecht
join:2007-01-08
Bowie, MD

1 recommendation

jvanbrecht

Member

This is not a dilemma, this is companies who should never have entered the content provider business. Telco's should remain telco's, and content providers should remain content providers. The telco should be nothing more than a pipe to connect the two.

They have been using their position as gatekeepers to jack up rates using one bullshit argument or another. It was their own fault that they did not adapt to new models when they had the chance. They entered a market ill prepared.

Also, Piracy, which an issue for content creators, is not really an issue for when it comes to selling content, this has been proven over and over again, and in fact, in some cases, piracy has increased sales and exposure of content.

ITALIAN926
join:2003-08-16

ITALIAN926

Member

Not a Dilemma? They should not have done what? Do you know anything about the 96 Telecom Act? Its main purpose was to get the two industries to compete against each other, therefore, dont blame the companies, blame our government. In addition, the cable industry had a massive head start in offering phone service, and had a network in place to handle it. The telcos continue to play catchup at a huge disadvantage having to build and maintain a second advanced network.

Piracy increases sales? Umm no.

You have plenty of opinions there, but no answers on how these companies are supposed to make money as streaming video erodes their video revenues. eg, maintain/improve networks (to erode their revenues even faster), pay their existing employees, overhead, etc.

Nightfall
My Goal Is To Deny Yours
MVM
join:2001-08-03
Grand Rapids, MI

Nightfall

MVM

said by ITALIAN926:

Not a Dilemma? They should not have done what? Do you know anything about the 96 Telecom Act? Its main purpose was to get the two industries to compete against each other, therefore, dont blame the companies, blame our government. In addition, the cable industry had a massive head start in offering phone service, and had a network in place to handle it. The telcos continue to play catchup at a huge disadvantage having to build and maintain a second advanced network.

Piracy increases sales? Umm no.

You have plenty of opinions there, but no answers on how these companies are supposed to make money as streaming video erodes their video revenues. eg, maintain/improve networks (to erode their revenues even faster), pay their existing employees, overhead, etc.

You bring up some valid points. Some would say that the profits from these cable/telco providers should be reduced or eliminated in order to pass down savings to the consumer. I am not against that personally, but I know that the shareholders would be upset if they did that.

There really are no easy answers. These are similar questions that the music industry was answering years ago. Now you have more music digitization. Maybe that is the future of TV as well.
kaila
join:2000-10-11
Lincolnshire, IL

1 recommendation

kaila to ITALIAN926

Member

to ITALIAN926
Perhaps they should enter the ink cartridge industry if enjoying a monopoly position with high margins (»ycharts.com/companies/CM ··· t_margin) isn't enough.

FFH5
Premium Member
join:2002-03-03
Tavistock NJ

FFH5 to ITALIAN926

Premium Member

to ITALIAN926
said by ITALIAN926:

Who has the answer?, I surely dont. As streaming video , and piracy, continue to erode video revenues for incumbents, how are these companies supposed to make money, and survive? Are they all supposed to go belly up or should they raise rates?

It is inevitable and also common sense that as video streaming grows and grows and as the infrastructure has to be improved to support it, that costs will increase. And if costs go up, so will prices for the service increase. But people who think government should supply all our wants for free(as long as WORKING taxpayers foot the bill), also think businesses shouldn't make a profit for delivering services.

Jim Kirk
Premium Member
join:2005-12-09
49985

1 recommendation

Jim Kirk

Premium Member

So sayeth the angry old white man!
silbaco
Premium Member
join:2009-08-03
USA

1 recommendation

silbaco to jvanbrecht

Premium Member

to jvanbrecht
said by jvanbrecht:

This is not a dilemma, this is companies who should never have entered the content provider business. Telco's should remain telco's, and content providers should remain content providers. The telco should be nothing more than a pipe to connect the two.

They have been using their position as gatekeepers to jack up rates using one bullshit argument or another. It was their own fault that they did not adapt to new models when they had the chance. They entered a market ill prepared.

Also, Piracy, which an issue for content creators, is not really an issue for when it comes to selling content, this has been proven over and over again, and in fact, in some cases, piracy has increased sales and exposure of content.

This company, clearly a cable company, should not have entered the content provider business because their product is declining? That makes no sense. And they don't create content, they deliver it. Therefore they are not a content provider.

If Telcos remained telcos and cable companies remained cable tv companies, neither would be in business today. Their core products do not have enough profit margin to maintain them anymore. And our internet access in this country would be in even worse shape than today.

Piracy not an issue to selling content? Tell that to the music industry when Napster hit and years of piracy caused music sales declined like never before.

BonezX
Basement Dweller
Premium Member
join:2004-04-13
Canada

BonezX to kaila

Premium Member

to kaila
that kinda makes you wanna throw up a bit when you see 60%+ profit margins, but they nickel and dime their staff and refuse to expand or upgrade infrastructure.
Skippy25
join:2000-09-13
Hazelwood, MO

Skippy25 to ITALIAN926

Member

to ITALIAN926
The 96 Telecom Act was so bastardized and torn apart by these very companies (whom helped to draft it) that you even mentioning it is laughable.

Where is the 45/45 connections for video they promised as part of that? Where is the 100% coverage?

They helped to draft a bill that had no teeth knowing full well they would not be held to it and would be able to modify it at their will. Which is both the government and these companies fault.

How they make money is not our problem. I would propose they finally admit and become the dumbpipes they are and then they can concentrate their business model on that instead. If they means splitting into 2 different companies (one for the pipe and one for the content) then so be it. I would even recommend it as then they can truly focus on how each can profit and will make decisions independent of the other.
tanzam75
join:2012-07-19

tanzam75 to BonezX

Member

to BonezX
said by BonezX:

that kinda makes you wanna throw up a bit when you see 60%+ profit margins, but they nickel and dime their staff and refuse to expand or upgrade infrastructure.

Comcast has a 10.7% net profit margin.

60% is the gross profit margin, i.e., before subtracting out marketing, administration, depreciation, amortization, taxes, etc.
jvanbrecht
join:2007-01-08
Bowie, MD

jvanbrecht to silbaco

Member

to silbaco
The difference there is that those who used napster, and similar services, who never had any intention of buying the content, cost the entertainment industry nothing, as there was no sale to begin with. It is not the same as walking into a store and stealing a physical medium. Those who do intend to purchase, tend to use piracy as a try before you buy. This was in the days before itunes, amazon and what not offer sample clips of music.

Nightfall
My Goal Is To Deny Yours
MVM
join:2001-08-03
Grand Rapids, MI

Nightfall

MVM

said by jvanbrecht:

The difference there is that those who used napster, and similar services, who never had any intention of buying the content, cost the entertainment industry nothing, as there was no sale to begin with. It is not the same as walking into a store and stealing a physical medium. Those who do intend to purchase, tend to use piracy as a try before you buy. This was in the days before itunes, amazon and what not offer sample clips of music.

Then you have people who don't intend to purchase and use piracy as a way to get the content without buying.

Piracy does affect sales negatively, but measuring that is difficult to do.

davoice
join:2000-08-12
Saxapahaw, NC

davoice to tanzam75

Member

to tanzam75
10.7% NET margin is still WAY higher than most other industries. Compare it to the others: »pages.stern.nyu.edu/~ada ··· gin.html

Net margin averaged across all industries = 7.84%

Nightfall
My Goal Is To Deny Yours
MVM
join:2001-08-03
Grand Rapids, MI

Nightfall

MVM

said by davoice:

10.7% NET margin is still WAY higher than most other industries. Compare it to the others: »pages.stern.nyu.edu/~ada ··· gin.html

Net margin averaged across all industries = 7.84%

So at what point should companies be forced to give back? 2%? 3%? I doubt in a capitalist country you will find companies willing to give anything. Especially when the stockholders are calling the shots.
34764170 (banned)
join:2007-09-06
Etobicoke, ON

34764170 (banned) to Nightfall

Member

to Nightfall
What will the shareholders think when the customer base erodes and there are no customers after all the rate hikes? That will really work out well.

Nightfall
My Goal Is To Deny Yours
MVM
join:2001-08-03
Grand Rapids, MI

Nightfall

MVM

said by 34764170:

What will the shareholders think when the customer base erodes and there are no customers after all the rate hikes? That will really work out well.

True that.....there has be a happy balance. The price of services go up as time goes on due to inflation. Seems that DSL, Cable, and Satellite providers price goes up faster than that though.
34764170 (banned)
join:2007-09-06
Etobicoke, ON

34764170 (banned)

Member

It's even worse as most of them are adding caps if they didn't already have them. Some like Rogers/Bell in Canada have ridiculously low caps (.e.g. 60 / 80 GB) and bump them up a tiny bit and customers are so brainwashed its like OMG they're doing me a favor.
34764170

34764170 (banned) to FFH5

Member

to FFH5
said by FFH5:

It is inevitable and also common sense that as video streaming grows and grows and as the infrastructure has to be improved to support it, that costs will increase. And if costs go up, so will prices for the service increase. But people who think government should supply all our wants for free(as long as WORKING taxpayers foot the bill), also think businesses shouldn't make a profit for delivering services.

They're selling customers services they can't deliver as it is. So now they have to pay more for less? Only in North America. There is a big difference between profit and extreme greed.

ITALIAN926
join:2003-08-16

ITALIAN926 to Skippy25

Member

to Skippy25
quote:
Where is the 45/45 connections for video they promised as part of that? Where is the 100% coverage?
Can you please give me a reference where this was promised , and guaranteed by the 1996 Telecom Act, thanx..
Skippy25
join:2000-09-13
Hazelwood, MO

Skippy25

Member

I never said it was promised nor guaranteed by the Act itself. You and I both know there is not a bought government official or lobbyist out there that would allow for a concrete statement like that to be put in any law. That would remove the wiggle room they (and you) need to discredit the failures.

It was based on the information the telcos put in their annual reports to deliver on the fiber they promised to deploy broadband, defined by them as 45/45mbps, in them helping to create the Act.

»www.teletruth.org/docs/b ··· free.pdf