Friday, March 30, 2007

C3SR Criterion Report - Mores Holes Exposed

March 30, 2007

More on the C3SR/NAB sponsored Criterion Economics report.

In the report, authored by Sidak, he states:

"As I demonstrate below, the marquee content offered by SDARS is generally prohibited on broadcast terrestrial radio due to indecency standards. The demand for indecent content is widely considered to be inelastic. For example, evidence indicates the demand for adult oriented content is highly price inelastic. Pay-Per-View adult entertainment on cable systems, for instance, garners some of the highest profit margins of any programming. Some analysts claim the margins for cable or direct broadcast satellite operators of up to 80% on each purchase. Other studies show price inelastic demand for indecent content on the internet. This inelastic demand means that most current consumers of indecent content are "inframarginal" consumers who will tolerate a price increase. Although such content may compete weakly against playboy magazine and other indecent content consumed in the privacy of one's home, indecent content over radio is distinguishable because it can be consumed in the car, while driving, and in remote geographical locations."

SSG Comments:

Nice outline of your point, but are you neglecting to remember that consumers have access to a wide variety of content delivery systems????? Did you forget about I-Pods, MP3 Players and CD's? What you term as indecent content can be delivered via those methods as well. Why did you leave these important categories out of your report in this section? Is it that you are slanting this report to terrestrial radio and failing to consider the other competition that consumers have access to?

How does the profit margin of Pay-Per-View television equate to the current model of satellite radio? Do you really want us to believe that if Sirius charged $2.00 for Howard Stern that $1.60 of that money would translate to the bottom line for Sirius????? Come now Mr. Sidak....surely you know the cost of the Howard Stern deal.

Ever see a George Carlin CD? Ever see other CD with warning labels on them? Can those CD's with indecent content be played in the car? Ever see the kinds of programming that can be downloaded to an I-Pod? Do you want us to believe that out of the 90,000,000 I-Pods sold that no one is using them in their car?

Another note......Local content. Why is it that your clients want terrestrial radio to have the monopoly on local content??????? Does that provide an advantage to terrestrial radio?

Mr. Sidak.......your report is generating many questions. Surely someone with your experience and background can provide answers.

Labels: c3sr, criterion report, sidak