Comcast and Time Warner: The Big Squeeze Begins

Consolidating industries are usually a mark of stress. The Defense industry is notorious for it, trying to reduce competition and cut costs through economies of scale (and screwing over the government customers). The abortive tie-up, since abandoned, of EADS and BAE is a prominent example. The idea being to eliminate or reduce competition and with near monopoly pricing, jack up prices for governments (which is exactly why the German government killed it). Economies of scale matter too, with just one administrative overhead, and often shared factories (with losers closed) but the idea of monopoly pricing is the main motivation. So too with the Comcast deal for Time-Warner Cable.

And here it is not just screwing over retail customers, who will indeed get screwed over, but content providers who will now have one less competitor for exclusive rights to live sports and scripted series, and outfits like Amazon and Netflix (by preventing their streaming content from enabling cord-cutters). In a way, this growing monopoly power of cable giants is good. Because monopolies are really only talented in screwing over customers, to the point where they seek out alternatives left and right. And anything that helps hurt what Stuff Black People Don’t Like called the “Opiate of the Masses” (which is sports not religion) can’t be all bad. And believe me, ever higher prices for the NFL and MLB and the NBA will accomplish just that — price based switching. And maybe, just maybe we will go back to the future. Of broadcast TV, only digital.

The Dodgers Network launching Feb 25 will be exclusively available to Time-Warner cable customers. Called “SportsNet LA,” the network is expected to cost an additional $5 minimum to Time-Warner Cable customers. DirecTV and ATT U-Verse have not agreed as yet to distribute the channel. The Dodgers are getting about $6 billion in the deal, which keeps games off local broadcast channels, where they had been since the team moved in the early 1950’s. The Lakers have a similar network with Time-Warner, and a deal nearly as lucrative. Lakers games will also be missing from local broadcasters.

The impetus for the Comcast deal is clearly to grab that live sports monopoly, as male TV viewing declines into terminal levels for nearly everything else, and DVR timeshifting, online streaming, and often, torrent downloading make scripted and reality TV far less lucrative. Even Singing Contest reality honcho Simon Cowell has been stung by the drop in viewing: The X-Factor has been cancelled after three seasons on Fox. Meanwhile, a combined Comcast/Time-Warner can negotiate significantly lower prices for content by TV broadcast and cable networks.

Yes, consumer prices will go up. And that will in turn lead to cord cutting, and opportunities for free, over the air broadcasters (OTA) and streaming providers through Roku and other devices.

Live sports are the only thing that male viewers will watch on TV now, and the impact on society has been pretty bad. While it is arguably true that the best track and field athletes, the best football, basketball, and baseball athletes are Black, a near monopoly position for these athletes is not a healthy thing for society. The NBA is about 85% Black, with nearly all the superstars being Black. The NFL is not much better, with about 70% of the players being Black and only a few White superstars.

The downside of all this “Opiate for the Masses” is excuse-making for the ever-increasing dysfunction of the Black community particularly in the inner city. Excuse making is never healthy, not for a company nor for a nation. Entire cities: Baltimore, New Orleans, Camden, Detroit, Philadelphia, Oakland, and St. Louis have been turned over to Black dysfunction with disastrous results.

Moreover, the easy money that carriage fees for cable AND broadcast networks has produced enables the worst sort of attitudes among television scripted and reality shows: defacto anti-White male viewpoints, diversity paens, and catering to the worst fantasies of the White female consumer. A lot of what is wrong with culture and society today is due directly to television’s malign influence on America’s public attitudes. Which in turn is a function of basic economics: easy money allows for the worst biases and prejudices of the deeply feminized and gay creative people and executives to run rampant.

For an illustration of this, “ME TV” (Channel 20 on Southern California’s Direct TV feed and available often in many OTA broadcasts) shows the Dick Van Dyke Show, while competitor “Antenna TV” shows the “Burns and Allen Show.” You can’t get more Jewish than Carl Reiner, Mel Brooks, and George Burns. Watch a few of them and notice: how masculine, how normal, how un-gay, un-diverse, un-PC the shows and cultural attitudes were. Then watch any random sitcom like, oh say “Two and a Half Men” or “Big Bang Theory.” See how feminine, how weird, how gay-friendly, and oh so diverse the shows are and the attitudes revealed within.

Again, this is a direct function of the basic economics: in the 1950’s shows like Burns and Allen, or the Dick Van Dyke show, made money off advertising which could not and would not embrace the idiocies of today. Because their mostly female audience back then was mostly married, and did not like insults to their husbands, which reflected upon themselves. Given the low marriage rates of today, women don’t take insults to White guys as an insult to themselves, even if married (because its only temporary, gotcha). Carriage fees make this situation worse: CBS gets over 50% of its revenue from simply being carried on cable and satellite systems.

Naturally, Comcast aims to squash cord-cutting by jacking up data fees for streaming content from Hulu or Amazon or Netflix, or throttling them to the point where streaming content is unwatchable. The recent court decisions throwing out net neutrality (allowing cable providers to throttle or penalize financially various types of data on their networks) makes this an easy play. While cord-cutting is running only about 5% a year, cable companies are not finding growth but seeking to avert revenue erosion.

Hence the mergers and acquisitions. It is one thing for say, Google to acquire a company to grow its product line. The purchase of YouTube back in 2006 was a good example of growth acquisition. But consolidation to prevent erosion of revenues is never a good sign; at best the company seeks to endure hard times with revenue. At worst, the situation resembles two drunks propping themselves up.

Which is where the opportunity comes into play.

OTA broadcasts in many urban and suburban areas are filled with low or no revenue digital subchannels. Really, how much money do five competing Vietnamese subchannels, ten Mandarin or Cantonese subchannels, and twenty Mexican content Spanish language subchannels make in Orange and Los Angeles counties? I’d venture, not much. The costs are low, however. That’s why you see in the LA area, three different evangelical digital subchannels in English alone, and two more in Spanish. Heck even KOCE Channel 50 has an English language digital subchannel devoted to Evangelism.

There is a lot, and I mean a lot (just browse your local digital OTA broadcasts if you don’t believe me) of unused or low-margin capacity in digital TV. I seriously doubt that Christian Crusades, or many competing Chinese broadcasts make a whole lot of money. Meanwhile, there is an underserved market in TV: Men.

It is time for conservatives to get moving. Create an ad-hoc, low cost, broadcast digital subchannel network for their own content. Creating a network aimed at men, showing new (and languishing old) action oriented television shows. Along with low-cost sports, not usually seen in the US. Such as Rugby Union and Rugby League, “Sevens,” and cycling races not called the Tour de France (NBC Sports has that one), auto and motorcycle races orphaned in US broadcast/cable with the death of Speed Network (replaced as Fox Sports 1) and anything else that’s cheap and fun.

There is a lot of global content, that appeals to men, and is fundamentally different from the soap operas that predominate today’s female audience preferences, available for cheap. Just having it on the air and watched by men would make a huge difference in the culture.

To see what I’m aiming at, watch on “ME TV” an episode of “Emergency!” which might also be available on Hulu (I have not checked). Then watch an episode of “Chicago Fire.” In the former Jack Webb produced series, interesting situations involving fireman and paramedics are followed up in the hospital. The drama comes from the situation, external to the characters. Its a tricky rescue, involving flammable chemicals, or allergic reactions, or dangerous powerlines, or malfunctioning cranes. For the latter, it is all hunky fireman fighting over beautiful soap opera style firewomen. The former was created and produced by a guy who aimed to entertain families and show public service workers in a positive and interesting light, the latter is just another soap opera for women (which characterizes most of TV drama particularly the cop genre these days).

Reform through the current system is not going to happen. Unless Google (and there’s your problem right there) rolls out a nationwide wireless internet (which would of course choke off anything remotely conservative and masculine and un-pc) there will be no escaping the Comcast type semi-monopolies of cable and internet service. The idea that conservatives can use the internet to deliver entertainment that is culturally positive is self-defeating because the internet delivery system depends on cable providers, mostly. Who are sure to choke off any threat to their own content and particularly anything conservative. That’s WHY among other reasons Comcast is buying Time-Warner Cable. Just to kill Roku and Netflix and Amazon Prime video.

Meanwhile, OTA broadcasts are cheap — once old TVs that have only an analog set up are connected to a converter box are hooked up, there is no annual or monthly fee, and most new TVs have a digital tuner already with no extra cost. Making OTA very interesting to budget pressed consumers, which is most of them. Men particularly outside of live sports find little of interest on cable now.

Getting people to switch will not be easy, but the costs are not that great. Most people will get fairly good reception with even indoor, advanced digital antennas. Existing rooftop analog antennas work just fine. At most a few converter boxes, and gone are $100-$300 monthly fees to cable or satellite providers. Savings can be anywhere from $1,200 to $3,600 a year. That’s not chicken feed.

But it will be content that makes the switch successful. Content that provides interesting, new, and more positive sports (like Rugby, or motorsports, or even adventure sports) to draw male interest. And not so coincidentally, provide a more socially positive message than watching Black gladiators in the NFL and NBA. Ray Rice is not a positive role model nor does his glorification serve any useful purpose. Mix that with programming simply not possible on the major networks or cable outlets, and you have a winning formula.

Cost? Probably something akin to the late, lamented PTEN network, would work out to about three original series at a production cost of $3 million an episode, for 22 episodes each, at a cost of (less advertising fees) $2 million to start, or $132 million the first year, plus whatever rights fees for sporting events (likely to run about wild ass guess around $50 million less maybe $20 million advertising revenues) and administrative/overhead costs of another $50 million. Running “only” $212 million or so deficit financing for a year. Recall that Fox Broadcasting ran a deficit of around $1 billion over ten years; and this envelope math assumes fairly minimal advertising revenues. It is very likely given the underserved market of men and conservative people, that only the first two years would suffer deficits.

Because the broadcast network would not need to incur the massive costs News Corp did in setting up Fox Broadcasting in 1987. Stations would simply run the content during Prime Time and perhaps weekends. Given the huge amount of stations available in most metro areas (I count over 100 available to my TV using a rooftop antenna) prices to run programming will be a lot lower than the analog days, when only VHF (channels 2-13) came in clearly and there were limited network affialites. With digital TV it makes no difference if the channel is say, 4.1 (KNBC-LA in my area) or say, 56.3 (KDOC ME-TV subchannel). They are both equally clear.

Yes, if America is going to remake its culture, it will have to go back to the future. With new, digital OTA technology. Because that medium is the only one overbuilt and with cheap, spare capacity.

About whiskeysplace

Conservative blogger focusing on culture, business, technology, and how they intersect.
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4 Responses to Comcast and Time Warner: The Big Squeeze Begins

  1. Bob Wallace says:

    When my TV is on (which is rarely) it almost is never off of ME-TV.

  2. Anonymous says:

    I haven’t paid for Cable TV since 1994. I am one of the original cord cutters and proud of it quite frankly. I do have Netflix now and I love it, however, my Internet provider is Comcast unfortunately.

    Net Neutrality, hah! Screwed again by our loving and beneficent government.

    • Anonymous says:

      TV used to be simple. Get some food. Turn on the TV. Watch Leave It To Beaver. Or maybe Pasword. Now you have to know all this sh*t about broadband and internets and carriers and 33 different companies and Apple TV and Netflix and Comcast etc. Screw it.

  3. feeblemind says:

    I live in an area where OTA TV is hard to get. Never the less, I have never subscribed to cable because I never wanted to pay for a service that was provided for free over the air.

    Although my reception has limited my channel choices, I used to watch a lot of football and NASCAR. I used to really enjoy baseball but have not been able to watch a game on my TV in decades. The same thing has since happened to NASCAR and football. The sports have moved to channels I can’t pick up or they are completely out of reach on cable. The upshot is that I am not much of a sports fan anymore.

    The point of all this is that if sports are priced out of the reach of some men, will they quit being sports fans altogether? It raises the question: If sports are priced out of the reach of the average Joe, are sports executives inadvertently ruining their businesses (by killing interest) in the long run by jacking fees in the short term?

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