I understand what you are trying to say. However, you are being quite naive. That's just not how the world works. Sometimes you just have to sacrifice for the future. That's what the local stations are doing.
You seem to believe that this case is like other forecasting cases. It isn't. The local stations are in an odd position. Under normal circumstances, they wouldn't have put towers up. They wouldn't even be broadcasting. They are doing so because they got such a deal and this is a condition of the deal. This is essentially sunk cost to them and they realize that.
If any of your assertions were true, you would see other things. For instance, they would all be broadcasting at actual power levels. They would be trying to maximize their OTA viewership. They aren't. They are doing what they are required to do; that's all.
Money. Anyway you look at it, in your model they are losing it. This is due to unrealized revenue streams. But more so today, by the associated costs of broadcasting H/DTV.
a) That is exactly what they are attempting to do, realize another revenue stream (in addition to the same content in the analog realm) b) Perhaps you didn't know that HD users aren't counting in viewership numbers. That's right -- for every person that watches the HD signal, they LOSE viewers when it comes to ad sales.
I know your statement is promoting the belief they're all running under the "we aren't losing any viewers by not having it, so we have no reason let Comcast have it unless they meet our demands". That's a rather backward business philosophy. What they don't have is an increase in viewers. You don't make money by sitting on your laurels and not trying to increase your business. Especially when you have the means to do so. Stations don't make money without adding viewers and revenue streams.
Then why was Kiro willing to cut of an entire MSO? While it didn't come to actually turning off the signal (nearly impossible), they did take ad space to run ads explaining that Millennium was stealing their signal. They are certainly not against using viewers as pawns.
Viewers are nice, viewers equal money in the long run. But how do you know they aren't losing viewers today? If viewer A can't watch the ABC Sunday Night movie in HD on Comcast, because they don't have it, or he can't get the signal OTA, he may go to ESPN-HD or HBO-HD or another channel rather than watch the SD broadcast of that movie. This may be in part to him owning the DVD or because he's only interested in HD content, or any number of other factors. But he's gone. If they steal even a small portion of viewers who would otherwise be watching another HD or cable SD offering, that's nothing but an increase in viewers and potential for additional revenue from advertisers.
First, that is a VERY FORUM view. Like it or not, this is a macro game. The handful of users that might switch are nothing. We are quite myopic here. While we love the technology and the picture, we really don't count when it comes to a broadcasting world. The interesting thing about that is that we do (to a much larger extent) when it comes to cable. In the cable world we tend to spend more. Cable companies are able to extract this revenue. The locals aren't. This is yet another reason why cable companies wouldn't want to slow down the process.
Can you tell me they aren't also losing potential viewers who would start watching a show at first because it's in HD and may end up becoming fans of the show? There are plenty of those people around the HDTV programming forum, and if there are a few on-line, there are probably more off line.
That's easy. If you haven't noticed they are all doing it together. I'm not going to switch from ABC to CBS because I can't see either. Plus, there aren't many people who would do this. Again, that's very forum thinking. I am about as big an HD advocate as you can find, and often I just watch shows via the TiVo for the hassle-free factor.
Time and time again it has been show that content is what counts. It really comes down to that. Yes, there is an initial reaction to HD. However, that wears off.
But above all this viewer speculation are the operating costs. You have hardware upkeep. Somebody has to be paying for the operating and upkeep costs, and if it's not the H/DTV business, it's coming from somewhere else. That's money lost, plain and simple. There's personnel, facility and utilities costs. So the station is now robbing Peter to pay Paul. So, why is it beneficial for any of the locals to leverage money from other aspects of their business to play this game of chicken?
It's a sunk cost. Think of it as what they are paying for the spectrum. That's what they do.
After all, would you ever GIVE a browser away? People seem to be willing to pay for it. Just ask Netscape.
If anything, they had better strike now as they could soon lose the bargaining power should the FCC have to step in to this fray.
And that's exactly what I am suggesting. I suggest that the FCC put some pressure on the parties. At that point, the locals would realize that they are bargaining in bad faith.
Add to operation costs, the primary acquisition costs. The acquisition of the spectrum may have been "free", but setting up and then putting out even a low power signal isn't. If any one of the stations has taken a loan to purchase the hardware or upgrade their broadcasting facilities, they are now losing money by leveraging funds from other aspects of their business to pay those loans. Every day they leverage funds from the analog, radio or newsprint side to pay the majority portion of that bill, the profitability of that company as a whole is lessened. Here again, why is it beneficial for the locals to delay any additional revenue stream to help offset this negative flow? So now you're stealing more money from your other businesses to cover the losses from this H/DTV venture.
This is not new. They knew this going into it. It's not like this was a surprise.
Lastly, there is a market. Companies do not spend money to enter a market, no matter how negligible that market may appear today, only to ignore any potential for immediate revenue being generated by that market. No matter how little it may appear. The first rule of business is to turn a profit as fast as possible. To do this, you start bringing in money as soon as the opportunity arises and find ways to increase that stream. Not just hope that you can get a slightly bigger cut in a few months because your target may or may not get nervous.
WOW! That is certainly not the first rule of business. It just isn't. Just out of curiosity -- what browser are you using? The point being is that sometimes one division supports the slow growth of another. Many of the best companies wouldn't exist if they followed your "first rule of business."
All this money is revenue lost, no matter how you look at it. Every penny they miss out on today is a penny lost. Every penny they steal from their analog station to cover the H/DTV broadcasting costs is a penny lost. Every viewer lost by not having this service is money lost as well.
Unless you understand the concept of future earnings, I really can't say anything here.
Comcast is not the sole party to blame I never stated that, they are the primary party, but not the sole party. As of April 2003, out of 809 H/DTV OTA capable markets, only 120 have any local cable carriage of their H/DTV signal. You can't tell me that the locals in all of those markets not being serviced by cable companies are running the same business principle as they are here.
I would be willing to bet that of those 120 most are O&Os.
Coincidence? I doubt it.
I have given you many many reasons why the locals have incentives to hardball. Yet you have maintained that Comcast is to blame. You have done so without giving a single explanation as to why.
Why was Comcast able to reach agreements in other markets? Why would Comcast be willing to risk their most spendy customers? Why would Comcast be willing to give up their one true advantage over sat providers? Comcast has a lot more to lose (both in the short term and the long term). All this and you still maintain that Comcast is to blame. I am curious to know why.