Multichannel Video Programming Research Articles

Blackouts in Retransmission Consent Negotiations: Empirical Analysis of Factors Predicting Their Frequency and Duration

This paper examines the factors predicting the frequency and duration of local broadcast television blackouts by Multichannel Video Programming Distributors (MVPDs), as a consequence of breakdowns in retransmission consent negotiations. Using a database of 372 retransmission agreements executed between 2011-2018, the paper uses a binomial logistic regression to identify the factors predicting blackouts, and ordinary least squares (OLS) regression for the duration. It finds the broadcasters’ network affiliations, the number of cable subscribers affected by a retransmission agreement, and a time trend to be the most significant predictors.

There’s Probably a Blackout in Your Television Future: Tracking New Carriage Negotiation Strategies Between Video Content Programmers and Distributors

Video programmers and distributors execute contracts for the mutually beneficial delivery of content to consumers. However, when the parties fail to reach closure on new terms and conditions before reaching the end date of an existing agreement, cable and satellite television operators must “blackout” the content thereby triggering consumer anger and mutual financial injury. Blackouts typically have occurred infrequently and for short time periods, because both parties understand the self-inflicted financial harm these service disruptions generate. Additionally, so-called Multi-channel Video Programming Distributors (“MVPDs”) have been able to pass onto subscribers higher programming costs through increased month rates without significant declines in subscribership. The marketplace for video programming has experienced significant change in recent years calling into question the ability of MVPDs to raise rates well above annual measures of general inflation. Likewise, content distributors have experienced unprecedented declines in subscribership and consumer resentment at having to pay rates, often in excess of $50 monthly, for programming tiers containing dozens of channels, many of which few subscribers have an interest in viewing. New designations, such as cord cutting and cord shaving, refer to the increasing number of video consumers who abandon an MVPD subscription, or incur lower monthly rates by downgrading to a less expensive service tier. Video consumers also have evidenced greater interest in so-called non-linear content, available as downloadable files and streaming on demand, in lieu of conventional “live,” linear content transmitted by television broadcasters and conventional cable and satellite MVPDs. The marketplace success of Amazon Prime, Hulu and Netflix evidences growing willingness of consumers to use their broadband network access for “Over the Top” access to alternative and competitive content sources. This paper assesses whether the video marketplace has, or soon will require major changes in the terms and conditions under which content providers and distributors agree to carriage terms. The paper will explain that while MVPDs, do not operate as common carriers, such as public utilities, they bear legal rights and responsibilities, predicated on marketplace conditions necessitating regulatory support for television broadcasters. Laws and regulations by the Federal Communications Commission now appear to be based on contestable assumptions about the public interest value in promoting local content sources, diversity in programming and ownership and offering broadcasters the option of mandatory carriage by MVPDs (“must carry”) in exchange for relinquishing demands for financial compensation from MVPDs. Additionally, both traditional MVPDs and market entrants using broadband networks for content delivery, have access to ample content alternatives, many of which also can trigger blackouts if carriage agreements lapse. The paper seeks to answer whether television broadcasters have overestimated the value of their content when electing to seek compensation instead of compulsory carriage by MVPDs. The paper also will assess whether non-broadcast video content providers make similar overestimates given the greater willingness of MVPDs to tolerate more frequent and lengthy blackouts occurring throughout the year.

Factors Affecting the Frequency and Length of Blackouts in Retransmission Consent Negotiations: A Quantitative Analysis

ABSTRACT This paper examines the factors predicting the frequency and duration of local broadcast television blackouts by Multichannel Video Programming Distributors (MVPDs), as a consequence of breakdowns in retransmission consent negotiations. Using a database of 372 retransmission agreements executed between 2011 and 2018, the paper uses a binomial logistic regression to identify the factors predicting blackouts, and ordinary least squares (OLS) regression for the duration. It finds the broadcasters’ network affiliations, the number of cable subscribers affected by a retransmission agreement, and a time trend to be the most significant predictors.

A Retrospective Analysis of Vertical Mergers in Multichannel Video Programming Distribution Markets: The Comcast-NBCU Merger

Using data on the prices paid by multichannel video programing distributors (“MVPDs”) for basic cable networks, I conduct a retrospective analysis of the price effects of the Comcast-NBCU merger. Estimates from both the difference-in-differences and lagged-dependent variable models indicate no systematic increase in the prices for Comcast’s networks following the merger, including general interest programming, news channels, and national and regional sports networks. Programming costs, however, exert a potent influence on affiliate prices, with full pass through in many cases. The evidence suggests either that there was no net positive effect on incentives to raise prices above competitive levels following the vertical merger, or else that the behavioral remedies placed on the Comcast-NBCU merger have been effective. Accordingly, excessive concern about the prices of programming following a vertical merger in the MVPD market appear unwarranted, at least when addressed by behavioral remedies.

Designing, Planning, and Executing Immersive Audio for the 2016 Rio Olympics

NBCUniversal, Comcast Cable, and Dolby Laboratories worked together to build, test, and optimize the Dolby Atmos production and delivery of the 2016 Rio Olympics Opening Ceremony. The Opening Ceremony was delivered in 4K/High Dynamic Range (HDR) and Dolby Atmos to selected VIP viewing parties across the U.S. via the Comcast Xfinity platform and distributed to several multichannel video programming distributors along with an ATSC 3.0 over-the-air test channel on WRAL in Raleigh, North Carolina. This is that story.

Serve and Volley: A Political-Economy View of Tennis Channel’s Six-Year Carriage Battle With Comcast

The availability of live sports content on television has reached an all-time high, with the proliferation of dozens of regional sports networks (RSNs). Sports networks charge individual subscriber fees, anywhere from 20 cents to more than $8.00 per month, and frequently negotiate carriage agreements with multichannel video programming distributors (MVPDs) to receive those fees. Since 2010, the independently operated Tennis Channel has fought to gain broad-based carriage from Comcast Cable Corporation, the nation’s largest MVPD. Using a political economy of media framework, the purpose of this paper is to examine court and regulatory filings to understand how an independent RSN positions itself against the established MediaSport complex and the oligopolistic power concentrated with a select few media companies.

Cable Market Power: The Never Ending Story of Consumer Overcharges and Excess Corporate Profits in Video and Broadband

The never ending story of the abuse of cable market power in the multichannel video programming distribution (MVPD) and the broadband Internet access service (BIAS) markets involves the central themes of communications policy over the past fifty years. Public policy must create the conditions for competition and entry. However, the economic characteristics of communications networks make it extremely difficult for workable competition to grow and inevitably lead to the abuse of market power, if regulation is too light or deregulation is premature. Cable TV needed policies like local franchises and guaranteed access to programming under the compulsory license §111 of the 1976 Copyrights Act to get off the ground. Cable quickly became the dominant video transmission and Congress twice deregulated cable long before competition existed. Cable abused its market power to raise consumer prices and prevent entry of new video distribution systems, like head-to-head (intramodal) competition from overbuilders and intermodal competition from new technologies like satellite (intermodal competition). Today, cable operators and broadcasters team up to vigorously resist the entry of Internet-based competition and consumers still suffer from the billions of dollars of overcharges as a result. Internet-based cable operators like Filmon, who are the best hope for competition, qualify for the same compulsory license that wireline cable operators have used for four decades.

The Future of HBO NOW: Investigating the Effects of the Charter-Time Warner-Bright House Merger on Over-the-Top Services

This paper aims to examine the effects of media ownership concentration on over-the-top (OTT) services. To do so, it will examine the Time Warner-Charter-Bright House merger as a case study, as well as explore current regulation for OTT services, particularly as multichannel video programming distributors (MVPD), and compare concerns for OTT services that previous moves to consolidate media ownership, like the failed Comcast-Time Warner merger, raised. Specifically, this paper will examine the relationship of HBO and HBO NOW, as an OTT service, and potential impacts of the merger on such content. Charter has argued that the merger will not negatively affect OTT services and lauds their benefits to consumers. However, the argument from those who have voiced opposition to the merger suggest that Charter will restrict the distribution of OTT services in order to preserve the exclusivity of its content. The case of HBO NOW offers a unique position as it is selling their content directly to consumers as OTT but also continues to be included in cable bundles through its traditional HBO cable channels. This paper hopes to explore this tension within the context of the Time Warner-Charter-Bright House Merger in order to address the effects of media consolidation on innovation and consumers.Including popular press, as well as press releases and blog posts from the relevant companies, data will be gathered from filings with the FCC, SEC, among other regulatory groups and activist organizations. This paper intends to conclude with a determination on how the merger might affect OTT services and a recommendation for changes to media law and policy on ownership in order to promote access to citizens, improve consumer welfare, and reduce barriers to entry in these media markets. The relationships explored in this paper between infrastructure, innovation, media ownership, and law and policy, are important sites of investigation – particularly for understanding how these forces impact citizens.

When Media Companies Insist They're Not Media Companies and Why It Matters for Communications Policy

A common position amongst online content providers/aggregators is their resistance to being characterized as media companies. Companies such as Google, Facebook, BuzzFeed, and Twitter have argued that it is inaccurate to think of them as media companies. Rather, they argue that they should be thought of as technology companies. The logic of this position, and its implications for communications policy, have yet to be thoroughly analyzed. However, such an analysis is increasingly necessary as the dynamics of news and information production, dissemination, and consumption continue to evolve. This paper will explore and critique the logic and motivations behind the position that these content providers/aggregators are technology companies rather than media companies, as well as the communications policy implications associated with accepting or rejecting this position. In conducting this analysis, this paper first explores the importance of classification in communications policymaking. Drawing on examples from U.S. communications policy, this paper illustrates how and why disputes over the appropriate classification of communications technologies and services often have had profound policy implications. Examples to be discussed include the importance of the telecommunications service versus information service classification in network neutrality policymaking and the classification of multichannel video programming delivery (MVPD) services in relation to access to broadcast content. Next, this paper explores the meaning of a media company and its important points of distinction from the meaning of a technology company. This paper explores this distinction within the context of arguments from online content providers/aggregators that they are more appropriately classified as technology companies rather than media companies. Drawing upon a data set of position papers, trade press stories, conference presentations, and public relations/promotional materials in which this argument is put forth by representatives of a variety of online content providers/aggregators, this section examines and critiques this position. In considering these arguments, this section puts forth a set of parameters as to what constitutes a media company and illustrates how online content providers/aggregators fit within these parameters. The final section discusses why it is important that these online content providers/aggregators be understood as media companies by communications policymakers. As this section illustrates, the functionalities provided by many of these online service providers are increasingly overlapping and intersecting with those of traditional media companies, particularly in terms of the production, dissemination, and consumption of news and journalism; yet this has happened absent the normative governance frameworks that characterize other communications platforms that serve a significant journalistic function. The danger here is that the production, dissemination, and consumption of journalism will increasingly be dictated by institutions devoid of any governance structure oriented toward serving the public interest as it pertains to the role of journalism in a democracy. From this standpoint, should communications policymakers embrace the notion that these online content providers/aggregators are technology companies rather than media companies, the implications for how well the contemporary media ecosystem serves the information needs of citizens in a democracy could be profound.

Minority Television Project, Inc. v. FCC, No. 13-1124, Brief for Amici Curiae Law Professors in Support of Petitioner

This brief amicus curiae in support of petitioner Minority Television Project in Minority Television Project, Inc. v. FCC, 736 F.3d 1192 (9th Cir. 2013), petition filed, No. 13-1124 (March 17, 2014), urges the Supreme Court of the United States to overrule Red Lion Broadcasting Co. v. FCC, 395 U.S. 367 (1969). The brief presents three reasons why the Court should overrule Red Lion. First, overwhelming technological change compels reexamination of Red Lion. The proliferation of electronic media for distributing multichannel audio and video programming has undermined Red Lion’s scarcity rationale. Second, Red Lion has been so thoroughly discredited in all branches of government that further adherence to that precedent would undermine rather than promote respect for the Court’s decisionmaking process and for the rule of law. Finally, this case demonstrates how the continued isolation of broadcast media from First Amendment norms that govern all other media and conduits inflicts serious harm to the constitutional interest in free speech.The academic signatories of this brief were: Ashutosh A. Bhagwat (UC Davis), Dale Carpenter (Minnesota), James Ming Chen (Michigan State), Eric M. Freedman (Hofstra), Patrick Garry (South Dakota), Mehmet K. Konar-Steenberg (William Mitchell) Lyrissa Barnett Lidsky (Florida), Kevin Francis O'Neil (Cleveland State), Michael Stokes Paulsen (St. Thomas, Minnesota), Daniel D. Polsby (George Mason), Lucas A. Powe, Jr. (Texas), Matthew L. Spitzer (Northwestern), Eugene Volokh (UCLA).

Vertical Integration in Multichannel Television Markets: A Study of Regional Sports Networks

Regional sports networks (RSNs) have become among the most important and expensive programming carried by multi-channel video programming distributors (MVPDs), many of which have acquired RSNs in whole or in part. Under Nash bargaining theory, vertical integration creates incentives to charge downstream distribution rivals license fees in excess of what an independent RSN would negotiate. We show that the Nash framework also implies that this premium increases with the size of the MVPD’s local downstream footprint, and we estimate a reduced-form econometric model of RSN affiliate fees, which yields results consistent with theory. Finally, we discuss various policy implications.

Does genre type influence choice of video platform? A study of college student use of internet and television for specific video genres

With the introduction of multichannel video programming distributors and different types of video platforms, consumers have more choices of channels and platforms than ever. Specifically, the present study focuses on television and the Internet as video platforms.Given the dynamics of the video programming industry, this study examines (1) how motives for watching video content predict intention to use television and intention to use the Internet as a video platform, (2) how the motives for watching a particular video content genre differ by video platform types, and (3) how audience’s choice of video content genres differs by video platform types. A survey method was used to obtain data for this study. Before the main survey was conducted, a pilot test was undertaken to test the wording of the questionnaire and reliability of items for constructs. A total of 149 students at a large university located in the southern part of the country participated in the main survey. The study reveals that motives for viewing the same genre of video content differ according to video platform types. It also discovers the underlying reason behind the popularity of certain genres online.

The Effects of Cable Clustering on the Flow of Cable Programming Networks

Over the past two decades, the horizontal concentration of most media distribution markets at the national level has increased, and the same is true for the multi-channel video programming distribution (MVPD) market as well. In particular, regional concentration or clustering (the combination of geographically contiguous cable systems) in the cable TV market was typical after the 1990s, because it enabled cable operators to take advantage of the economies of scale to provide a full range of digital and broadband services. As a result, in 2008 87.5% (50.7 million) of all basic cable TV subscribers were served by cable systems within clusters, with the average size of each of those clusters consisting of 600,000 subscribers.Theoretically, clustering itself allows cable operators to offer more cable programming through economies of scale (the “pro-competitive” effect). However, when regional concentration is combined with vertical integration, the incentives of vertically integrated MSOs to favor carrying their own affiliated cable network may increase while, at the same time, the incentives to foreclose a rival network increase (the “anti-competitive” effect). Therefore, such a combination of concentration and integration may also serve to strengthen the foreclosure strategy of a vertically structured MSO. In order to empirically test the effect of cable clustering, this study analyze the carriage decisions of vertically integrated and regionally concentrated MSOs regarding affiliated or rival cable networks, primarily using a 2009 Warrens Publishing’s Television and Cable Factbook database. It was found that the vertical favoritism of vertically integrated MSOs still remains; however, the increase in regional concentration may serve to mitigate this vertical favoritism. Note: This study has not been presented or published at anywhere.Biography: Sung Wook Ji is a fixed-term assistant professor in the department of Telecommunication, Information Studies and Media at Michigan State University. His primary research interests center on the social and economic impact of new media technology on the media industry and its policy implications. Specifically, his research focuses on the new media technologies (Internet and IPTV) and how those technologies have changed our society from the perspective of Economics.

지상파방송 재송신과 공정거래 : 국내 분쟁 사례를 중심으로

Retransmission battles between broadcast television and multichannel video programming providers(MVPD) including cable television systems and direct-broadcast satellite are taking place frequently. Korean Broadcasting Law clarifies that retransmission of channels not subject to compulsory retransmission(or non-‘must carry’ channels) requires agreement between broadcasters and MPVDs. This article reviews retransmission rules and provisions under Korean Broadcasting Law, how to regulate retransmission battles when the disputes do harm competition of the market, whether retransmission rules are in line with market principle by looking into retransmission battle cases.

Effects of Mergers and Competition on Consumer Benefits in the Multi-Channel Video Programming Industry in Korea

This article examines the welfare benefits of cable television (CATV) merger and acquisitions in the multi-channel video programming distribution (MVPD) market. In particular, it seeks to answer whether cable subscribers are better off in competitive markets than in concentrated markets. This article estimates the impact of mergers by examining Korea's regional market-share data for MVPD operators with a hierarchical-choice model. First, the estimation results show that the consumer value of the CATV platform, in terms of the category values in a nested logit model, was significantly lower in the concentrated markets than in the more competitive markets. Second, the study compares these findings with those in the literature about the U.S. market. The following question is prompted: Why is direct broadcast satellite competitive with CATV in the United States but not in Korea? This article points out that differences in regulatory policies, particularly as they relate to the treatment of vertically integrated networks, do have significant effects on the effective boundary of MVPD competition across platforms. To support this argument, this article provides details on the policies and market characteristics of the Korean MVPD industry.

Regional Sports Networks, Competition, and the Consumer

This paper examines competitive issues surrounding sports media rights and multichannel video programming distribution (MVPD) markets. Cable and satellite providers often have significant interests in the Regional Sports Networks (RSNs) that jointly coordinate and market the media rights for regional or local sports teams in various U.S. markets. But these markets have a number of features that should factor importantly into analysis. For example, there is often limited in sports media rights and MVPD markets. Ongoing changes in programming content and packaging, and the bundling of sports and non-sports programming also means that market definition is an important issue. Finally, unique consumer preferences for quality and consistency in sports programming should be considered. The paper argues that changes in the structure of RSN and MVPD markets and non-merger agreements should be closely scrutinized by antitrust and regulatory agencies. This includes mergers at the horizontal MVPD and RSN levels and those that create vertically-integrated content/distribution platforms. Such scrutiny should pay close attention the systems competition issues raised by the two dominant modes of MVPD--cable and satellite. Both antitrust and regulatory agencies should make full use of remedial conditions in dealing with problematic mergers and the Federal Communications Commission should pursue directives geared toward promoting and maintaining in the carriage of sports-related programming.

A La Carte and 'Family Tiers' as a Response to a Market Defect in the Multichannel Video Programming Market

Many policymakers have recently expressed concern over the practice of multichannel video programming distributors (MVPDs) such as cable and satellite video providers, to a large number and variety of channels together into a take-it-or-leave-it package. In this BULLETIN, we describe a set of circumstances in which a market defect will lead to the bundling of potentially objectionable content with generally desired content. Our model focuses on the role that advertisers and video programming vendors play in the network bundling of MVPDs. Our economic model illustrates the role these third parties play in an MVPD's decision to deliver particular channels of video programming to households in a bundle of desired and potentially objectionable programming that does not give consumers the option to exclude objectionable programming from the purchased bundle. Forced appear in both monopoly and competitive structures because the conditions that give rise to this market defect make these bundles resistant to changes in market structure. As a result, policymakers should look at all participants in the multichannel video distribution market, not just retail distributors, as potential sources of forced bundling problem.

Vertical Foreclosure in Video Programming Markets: Implications for Cable Operators

This paper argues that a cable operator with sufficient market power in the downstream multi-channel video programming distribution (MVPD) market can deny access to unaffiliated programmers, resulting in an upstream programming rival's exit or impaired dynamic efficiency. Further, market dominance by cable operators may harm consumers of video programming through higher prices and less choice in the downstream MVPD market. The reason is that as unaffiliated video programming becomes affiliated programming, the latter is then withheld from rival MVPDs. This analysis is then applied to the recent acquisition of Adelphia by Comcast and Time Warner.

The Consumer Welfare Cost of Cable 'Build-out' Rules

Firms that wish to offer wireline, multichannel video programming services in direct competition with cable incumbents are being faced with calls by those incumbents and policymakers to to entire communities as a pre-condition of receiving a franchise. This requirement is often incorporated into local cable franchising process, which FCC over a decade ago called the most important policy-relevant barrier to competitive in local cable markets. In this Policy Paper, we show that build-out mandates are actually counter-productive and serve primarily to deter new entry, increase profits of incumbents, and harm consumers. With both a theoretical model and an empirical simulation, we show that build-out rules cause new video entrants to bypass certain communities entirely and sharply lower number of communities in which new network construction would be profitable. We show that consumer welfare is likely to be higher with free entry policies that impose no build-out requirement.

Estimating the demand for cable service in the U.S. in the presence of measurement error in the data

This paper looks at the effect of direct broadcast satellite service on the demand for cable service in the United States. To measure the competitive influence of the noncable providers, the Direct Broadcast Satellite (DBS) share of video subscribers in each franchise area is used in modeling the demand for multichannel video programming subscription service. After examining some important econometric issues including the appropriate functional specification, whether the error terms are homoscedastic, and the presence of outliers in the data, data from the 2002 FCC Annual Cable Price Survey are used to estimate the demand for analog and digital cable service. One anomaly arises in the measurement error associated with the DBS penetration variable.