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The Future of Video Hinges on a Definition

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June 04, 2012

The Future of Video Hinges on a Definition

By Julie Griffin
Contributing Writer

The Federal Communications Commission (FCC (News - Alert)) has been asked to reconsider which companies can be defined as Multi-channel Video Programming Distributors (MVPD). Analysts believe that the FCC’s decision could have a revolutionary impact on the market, taking the way we access video and television and turning it on its head. The FCC has made favorable calls on behalf of MVPD’s lately- a group accused of anti-competitive tactics - but they have announced that they will be open for discussion with the public regarding this situation.

The most prevalent MVPD is Comcast (News - Alert), a company that is pioneering data caps and tiered service packages. Time Warner (News - Alert) Cable and DirecTV are also members of the MVPD club. As MVPD’s, these companies do not have to negotiate deals with individual programmers which could be costly – too costly for non-MVPD’s, or Over-the-Top (OTT) internet service providers, such as Hulu, Netflix, Google (News - Alert), etc, to compete.

Market analysts have suspected MVPD’s like Comcast of offering usage-based subscription packages- or data caps- as an anti-competitive tactic that leaves no opportunities left for other types of video service providers. The FCC decided not to regulate usage-based pricing, perhaps because of the consequences this could have on the consumer. Dr. Ford of the Phoenix Center of Analysis said, "A prohibition of usage based pricing may force some consumers to pay more for services they do not want or use, while others are allowed to pay less for services they do.”

Although the FCC has overlooked Comcast’s and other service providers’ usage-based pricing systems, it seems that the FCC would like to see more competition in the market, so they have agreed to have an open discussion with the public regarding the decision for MVPD reclassification. A Christian- based service provider named Sky Angel has been somewhat of a significant voice on behalf of OTT providers. Sky Angel wanted to offer the Discovery Channel to their viewers, but the Discovery Channel opted out of this deal. Perhaps this was due to Sky Angel’s non-MVPD status. Other companies, such as Google and Apple (News - Alert), would like to be MVPD’s so they too can position themselves in the video and television market.

Edited by Brooke Neuman

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