Deal Conditions Don’t Make TV Landscape Equal, Speakers Say
Independent programmers face challenges, former FCC commissioners, an ex-FTC chairman and industry experts said Wednesday. Some said even with fragmentation of the TV market increasing ways for consumers to watch content, indies including beIN SPORTS and NuvoTV, which were represented at the Georgetown Center for Business and Public Policy event, don't always have access to traditional pay-TV distribution. Indies fretted about the impact on their industry of consolidation, but others said the market is good for consumers.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
Indie programmers "are small ships out there among big ships on big waves," NuvoTV CEO Michael Schwimmer said. “Any independent saying ‘this merger is good for me’ is making a personal decision based on recent history and not the industry as a whole. Reduction in the number of buyers is typically not seen as positive for someone who has something to sell.”
The Communications Act requires many voices in a market, said PCIA CEO Jonathan Adelstein, a former FCC commissioner. “There’s a need for a diversity of voices in any country, especially a democracy such as ours.”
Changes have brought more consumer choice, some said. “The days where we had three network channels are gone,” said Robert McDowell of Wiley Rein, a former FCC commissioner. “It’s a wonderful time to be a content entrepreneur. There are lower barriers to entry. People watch OTT [over-the-top] content on their smartphones.”
People create content and distribute it online, which isn’t the same as mass distribution on a linear channel, but it’s a “wonderful opportunity available in this fragmented environment,” said Andrew Schwartzman, senior counselor at Georgetown University Law Center’s Institute for Public Representation. “It boils down to let them eat YouTube.” There's a limit to the amount of distribution someone can achieve through OTT versus traditional linear channels, NuvoTV's Schwimmer said. Usage caps also limit OTT distribution, Schwartzman said. Piracy shows what consumers want to watch, McDowell said, calling himself an advocate for preventing piracy. "They’re doing a disservice. But it shows a disruption in the market. Who succeeds might be those who have the cheapest content."
Many consumers still pay for traditional multichannel video programming distributor services and won’t stop anytime soon, Adelstein said. “The diversity is not there. All of that programming is owned by one of five companies. Anyone that wants diverse content should go to the Internet, because they’re not going to find it on pay TV,” he said. “Quality programming on TV isn’t carried because it’s quality TV, it’s quality TV because it’s carried,” Schwimmer said. Cable companies influence online distribution of programs through cable carriage, Schwartzman said. “People who increase the gene pool of ideas of content need distribution. Consolidating those means of distribution causes serious public policy problems and interferes with diversity." Other discriminatory treatments, including tier placements and content delivered in standard-definition versus HD, greatly affects independent programmers, said Roy Meyeringh, beIN SPORTS senior director-business development and strategy.
These are reasons regulatory agencies exist to protect the public interest, said antitrust expert and ex-FTC Chairman Jon Leibowitz of Davis Polk. The firm represents Comcast, which is buying Time Warner Cable. He said having two agencies review transactions is important. In the communications sector, the FCC reviews deals as does the FTC or Justice Department. The first two agencies promote competition to benefit the public, Schwartzman said. They outline conditions, and the companies involved agree voluntarily to the conditions or decide not to go through with a deal, McDowell said.
Adelstein said regulators should account for indie content when devising conditions. “You have to look at the behavior of the company,” he said. “What’s its record with independent programmers? Are they being treated well? This is something the FCC can look at under protective orders.” Structural conditions can be effective, but behavioral conditions don’t work as well, Schwartzman said. Companies can find ways around conditions, Adelstein said. “There are complex ways companies that control the pipes can alter the ways a programmer gets programming to the public. Conditions can be very difficult to enforce.” And conditions aren’t designed to cure all evils, Schwimmer said. “They aren’t designed to change the nature of relationships between all independent programmers and all MVPDs.”