The Economics of 4DTV

[bmcglynn]

The real key to the survival of 4DTV is the economics. If there is money to be made, there surely will be companies that serve our community. The big concern I have is whether or not there is a critical mass the sustain this service. I got thinking to see if there is an opportunity to put together a service that offers first generation feeds from PowerVu and other formats. There are always people that want premium quality video and audio - which is only available on master feeds. I looked at Dish, etc... and the quality of the images is heinous.

The first thing we would need to do is to put together a financial model. To do this, we'd need some variables like:
1. Cost to lease a satellite transponder for a year (the Authorization channel on G1 channel 3)
2. Price paid to programming originators (how much coin from our subscriptions need to get paid to HBO, Showtime, etc...)
3. Number of active subscribers
4. Potential subscribers for enhanced service (who would come back, or pay more for more service)
5. Fixed costs for staff, systems, etc....

There might be enough of an interest for Videophiles and Audiophiles (like many of us here) that pay the extra bucks for first generation feeds. Also, this model could give us some sense as to how long 4DTV could stay alive.

I can come up with #4 and #5 on the list easily, although would look for some help in #1, #2, and #3 on my list to put together the model. From there, we can see how long 4DTV will stay on the air.

Can anyone help with these cost items?

Brian

 

[lonewolf454]

Someone with the funds (not me) could buy the ACC business from moto since they won't need it-

 

[bmcglynn]

The number I came up from some Google searches for a transponder is roughly $1.4M/year. Ultimately, Motorola needs to pay this fee for the G1-3 transponder rights, plus pay for the staff to keep up the authorization service as well as pay for a dedicated earth station. My guess is that the overall cost for the Authorization service is around $2M/year.

The other issue is keeping the 4DTV units alive. Motorola was not selling enough, so there is no business case to keep them in production. One alternative is to purchase the rights for the units (for a royalty), then pay for the fabrication of the units elsewhere. Once again, there would need to be a significant upside for that to take place.

Another approach is to license the DCII technology and produce a CAM that is compatible with an AzBox, or other hardware supplier. From there, these boxes could control the dish and use the code in the card to decipher the signals. This is probably the best approach for economics reasons, although there would likely be some hurdles to get over in getting Motorola to license the technology out to where the security could be compromised.

It all comes down to the following:
1. Enough people interested in paying for the service
2. Willingness of Motorola to license DCII (Or Scientific Atlanta for PowerVu)
3. Willingness of program producers to license their programming to subs directly (they may have contractual agreements with DTV, DN, and Cable - nor may not want the headache of dealing with a small subscriber base)

The most important variable above is #1. If there are enought people who want the service, then #2 and #3 are not an issue.


Brian

 

[lonewolf454]

Marketing, marketing, marketing. People for the most part don't even realize there is any satellite, other than dish network or directv. They dont realize that they are actually reuplinking signals from c-band masters, etc. This is due to the deep marketing tactics and gimmicks used by companies such as dish and direct.

I am sure if it was economically viable, to offer general population a choice of inexpensive programming via satellite, even if they would use their own hardware, it would be successful, with the correct marketing. A-la-carte type packages would have to be offered as well, some folks don't care about news, others need sports, or kids programming, etc.

America needs a satellite service for people, with no contracts, etc, programming starting around $20-25 a month

Even a basic package of say 10 channels, for $10-15 a month would probably get a lot of takers. From what I've heard and read, a lot of people don't like shelling out $50 a month for dish, when they only want to watch a little tv, but get locked in to the 2 year contracts.

 

[tvropro]

Marketing, marketing, marketing. People for the most part don't even realize there is any satellite, other than dish network or directv. They dont realize that they are actually reuplinking signals from c-band masters, etc. This is due to the deep marketing tactics and gimmicks used by companies such as dish and direct.

I am sure if it was economically viable, to offer general population a choice of inexpensive programming via satellite, even if they would use their own hardware, it would be successful, with the correct marketing. A-la-carte type packages would have to be offered as well, some folks don't care about news, others need sports, or kids programming, etc.

America needs a satellite service for people, with no contracts, etc, programming starting around $20-25 a month

Even a basic package of say 10 channels, for $10-15 a month would probably get a lot of takers. From what I've heard and read, a lot of people don't like shelling out $50 a month for dish, when they only want to watch a little tv, but get locked in to the 2 year contracts.

We do need ala cart and no contracts especially with the pizza providers. I got Direct tv one week ago since I was forced into it by what is happening. I have their choice package of 150 channels for $24.99 a month. I'm not willing to spend much more. For the most part 90% of the cable channels I'm getting now are crap. I will downgrade to the family package next year for $29.99 a month. It has enough in it for me. I hate the whole contract idea but they strong arm you these days.

I would love to see something happen for the good with the bud again. I much rather have c band masters. I hope someone somewhere with clout and deep pockets can make something happen again. I will be first in line to subscribe.

 

[Anole]

look to history

How many years has Voom been dead?
Didn't they try to market a premium quality service to the masses?
Can anything be learned from their business model?

On the other hand, StarChoice (or whatever they're now called), seems to be alive 'n well.
I've read they deliver quality better than DirecTV/Dish/BEV, but that's not something I know for sure (nor care to argue about).
How's their business model...?
... or, would they be a viable choice of better picture, if the whole 4D revitalization idea falls through?

I don't know... just tossing out ideas. -

 

[Corrado]

As far as my economics for 4DTV...

I paid big money for all of my equipment. I just want to get the most out of what I paid. (Yes, it is too much considering the decades old technology it is.)

I don't have the other answers. The lack of modern HD and DVR equipment and having to install, maintain and troubleshoot our own systems is beyond the typical TV viewer. These also count against taking steps forward.

 

[pendragon]

On the other hand, StarChoice (or whatever they're now called), seems to be alive 'n well.
I've read they deliver quality better than DirecTV/Dish/BEV, but that's not something I know for sure (nor care to argue about).
How's their business model...?
... or, would they be a viable choice of better picture, if the whole 4D revitalization idea falls through?

When HD effectively ended on 4DTV, I added Shaw Direct (aka Star Choice). The data rates vary, but my premium movie channels look pretty close to 4DTV masters and are sometimes better. I don't miss 4DTV any longer, but YMMV. I'm still subscribed to DN from a long time ago, but have been dropping channels and packages since the switch to Shaw.

 

[crackt]

starchoice is now known as shaw direct. their picture quality is great. but there programming options lack a bit of punch and flexibility. bell has some channels shaw doesnt. but the digicipher2 video quality is better. shaw also forces you into the bs tiered packages. im over 50 bucks just so i can get treehouse for the kids. its funny how you need 4 packages to sub to 1 channel. 4dtv would have never suffered this fate if hd was supported a little less fugly by the service. ah well i was never a moto fanboy anyways.

crackt out,.

 

[tvropro]

I know one thing to me it seems like GI designed the video circuit in the 4DTV's to be hot. I think the level exceeds 1vpp, or it's that the other receivers run the video shy to cover up the digital mess. That can account why the picture seems sharper and crisper on the 4D over DVB and pizza boxes.

 

[pwrsurge]

I believe the main issue with 4DTV is the fact that Motorola hasn't made any new receivers for several years now. This issue alone made it very difficult to market 4DTV to new subscribers as other services have more current receivers (i.e. PVR, HD, etc...)
This also had the effect of making it very difficult to get new receivers to sell, especially in Canada. Over here, a LOT of people simply did not upgrade their analog receiver when VCII+ was phased out and went straight to one of the pizza pan services.

In order to save 4DTV, we need to act quickly and create an organization comprised of members willing to keep supporting 4DTV financially as nobody can do it alone.
Based on the amount of capital required, organization members would get shares based on the funds they contribute.
Once this organization is formed, we then need to take action quickly.

As far as I see it, we have the following options:

1. Contact Motorola and find out how much it would cost to takeover the 4DTV ACC. Our organization would then assume responsibility in operating it with profits from ACC programming fees distributed to organization shareholders.

2. Contact Motorola and find out how many receivers our organization would need to commit to in order to resume production of 4DTV receivers.
a) If Motorola keeps running the ACC
b) If our organization assumes responsibility in running the ACC
Profits from receiver sales (and ACC programming fees if we run it) would be distributed to organization shareholders.

3. Contact Motorola and find out how much money it would cost to license the Digichipher II technology in order to create a CAM module and card compatible with 4DTV. Find a company to produce the modules and modify the firmware of a Linux based FTA receiver (i.e. AzBox) to enable tuning these signals. For activations, we could either use Motorola's ACC or create our own as we are now licensed to use the Digichipher technology. This option has the advantage of us not having to commit to a certain number of expensive satellite receivers but a CAM reader/card instead. However, it might take time for Motorola to accept licensing their technology to a 3rd party so this option might not be achievable by the end of this year.

 

[trinidex]

1) I would be interested in investing
2) I think a different receiver is needed, some relation to the Shaw boxes
3) Multiple satellites could be controlled by external DISECQ positioners
4) I think it is appalling that 4DTV/DSR410/Consumer DCII is not promoted more - people need to know there is a choice
5) I think it is funny that pizza customers complain about the lack of channels I get on my Skyvision sub - without a contract!
6) I think HD option is needed for the future of the 4DTV/DSR410 - even if it is upscaled output
7) I think DVR option is needed for the future of the 4DTV/DSR410
8) A CAM option for FTA receivers would provide an excellent option

my 2c

 

[truckracer]

absolutely. the pizza pan people did quite an extensive job ridding the country of c band back years and years ago. they preyed on people who didn't know any better and tv sets were not as good as they are now so many people probably couldn't tell the difference. society at that point had started turning into a plug and play world. a place where you worked or maintained nothing- you pull it out of the box, plug it in and go on to something else...when it quits working throw it in the trash and get another... thats sort of what happened to c band among other things. i remember when people used to work on their own cars!! it was a common sight to see your neighbor doing his own tune up and oil changes or even putting a new engine in that old car he loved. now you just throw everything away and get another...c band requires some maintenance. it will be hard to get people willing to go that route.. i love c band

 

[pwrsurge]

Although working on a CAM option is a good long term strategy, I believe our immediate priority is to keep existing 4DTV receivers working as we don't want to lose the remaining customer base. This entails keeping the ACC operational, either by purchasing it from Motorola and assuming its operations or by convincing Motorola to keep running it by committing to purchase x amount of receivers over a certain time frame. We would then have to launch a marketing campaign to revive 4DTV in order to sell these new receivers. Preferably, these new receivers would feature:

- Megapipe support (i.e. MPEG-4/HD Digicipher 2)
- PVR
- HD with HDMI output
- 3D TV support

I believe a strong selling point for these new receivers would be for their ability to tune megapipe broadcasts as most HD channels are now using this format.

 

[trinidex]

On the issue of quality, isn't it amazing how soft pizza looks on LCD TVs compared to CRT TVs?!

This gets worse the larger the LCD panel.

 

[trinidex]

Although working on a CAM option is a good long term strategy, I believe our immediate priority is to keep existing 4DTV receivers working as we don't want to lose the remaining customer base. This entails keeping the ACC operational, either by purchasing it from Motorola and assuming its operations or by convincing Motorola to keep running it by committing to purchase x amount of receivers over a certain time frame.

Agreed

 

[trinidex]

i remember when people used to work on their own cars!! it was a common sight to see your neighbor doing his own tune up and oil changes or even putting a new engine in that old car he loved. now you just throw everything away and get another...c band requires some maintenance. it will be hard to get people willing to go that route.. i love c band

You've hit a very important point right there truckracer

The populous is becoming lazier and more drone like daily - IMHO

 

[pwrsurge]

In order to give us a kick start in forming this organization, we should begin by identifying candidate members and see if they are interested in getting on board. Once enough organizations are interested, we could then proceed in creating the organization.

Potential members include:

- Skyvision
- Satellite Receivers Ltd.
- NPS
- Dish Supplies
- Satellite Communications Source (Canada)
- SAMI dish

Also, large satellite equipment retailers carrying C-band equipment:

- Sadoun
- Galaxy Marketing / WS International
- The Satellite Shop
- Satellite Mart
- All Things Digital
- Stallions Satellite and Antenna
- Satellite One
- Dr. Sat (Canada)

I'm sure there's many more but I'll leave it to other forum members to post the other ones.

 

[bmcglynn]

I believe a strong selling point for these new receivers would be for their ability to tune megapipe broadcasts as most HD channels are now using this format.

A phased approach seems to be the most logical, and I do like the idea of creating a programming entity that we all own shares in. First, would be to stablilize the Authorization service and existing 4DTV system. Next, developing DCII CAM technology on a unit like an AzBox followed by approaching Scientific Atlanta for licensing PowerVu.

I believe that another key to success is supporting PowerVu. PowerVu is very prevalent on much of the movie channels, along with other transmission formats. It is essentially DVB from my understanding.

One of the most critical items would also be approaching the programming producers to understand the costs and willingness to sell programming direct through a programming broker (which the 4DTV model essentially does). Without the programming options, the system would be dead on arrival.

The new venture would need some leadership from someone in this industry who has connections with equipment manufacturers and programming providers to start the dialogues.

Ideally, this system could get some legs and take off. Satellite programming providers could offer this option along side with DN, DirecTV as the "videofile" or "ultra-high Def" option.

Does anyone on the group have experience with programming providers, Scientific Atlanta, or Motorola?

Brian