AW: [SAT-TOPIC]: Xtra continues?

Hello Domagoj,

I'll try to answer your questions:

	Von:  Domagoj Maric[SMTP:doma@iridis.com]
	Gesendet: Mittwoch, 5. November 1997 08:33
	An:  sat-topic@tags1.dn.net
	Betreff:   [SAT-TOPIC]: Xtra continues?

	Hi Taras!

	Thanks for the information, I can understand much more things
now. I still
	lack some information to complete the picture. Let's try to
answer those

	1. ADR seems to be cheaper then MPEG. When more stations go
digital (move
	to Astra 1D and up) could all those transponders be used for
ADR? If so, it
	will get even cheaper. But what are radio broadcasters waiting
for? What is
	Xtra waiting for?

	There is a so called "full transponder mode" which gives the
possibility to put 48 ADR channels on one transponder. Obviusly this is
an exclusive use. But the cost will be twice as high as in the shared
mode - 8 milion / 48 channel equals 166.000 DM per year. The real point
of ADR is that it uses some unused "free" bandwith behind the "real"
transponder carrier. The main TV broadcast already pays the transponder!
	However they are still lots of transponders with place to
accomodate supplemental ADR channels. The only drawback of ADR is the
reason for that: the audio/radio broadcast data stream has to be mixed
to the baseband of the main (TV) sat-uplink. The transport cost from the
source to the uplink often exceeds the ADR subcarrier fee.

	2. Another problem (cost) is music copyright fees. MCE is owned
by Sony and
	Warner, both having a huge collection of copyrights. With such a
	background, MCE could  produce their program at a lower cost
than DMX. E.g.
	to produce a CD it costs just a few cents, but even wholesalers
pay a few
	dollars for a CD with copyrighted material. This means copyright
does cost
	a lot, and to produce 24 hours, 60 channels program you need a
lot of
	copyrights. How will Xtra deal with copyrights?

	Commercial users ( pubs, hotels, shops ) have to pay the
copyright fees directly because they are volume dependent. For private
users the copyright fees have to be payed to local copyright agencies.
Services like DMX or MCE have to shell out something between 10 and 50
percent (sorry, I can't be more specific here due to a NDA) of the
subscriber revenues to cover copyright. The copyright owners (Sony,
Warner etc) will the recover some of the money from the agencies
afterward, but this isn't a advantage for MCE as the copyright will be
payed only based on the music which was aired and not by whom.

	3. There is a problem with the content of DMX channels. DMX
channels are
	produced in the USA, for American market. What is popular there
need not to
	be popular in Europe. To get high customer satisfaction Xtra
would have to
	produce some of the channels exclusively for European market,
like MCE

	You're quite right there, the programming has to be extended
with european channels. However, the incremental cost of physically
reading CD's and typing titles is smaller in a bigger playout center
like DMX's in Denver than locally.

	4. What about cable operators and program package providers
	Premiere, ...)?

	That was a very sad part of the history: Due to the competition
between DMX and MCE in Europe the management of both companies tryed
very hard to get into the digital TV bouquets. DMX got all 3 available
packages but had to give up the programming for nearly free. This was
catastrophic from the marketing view: a) subscribers were lost because
they got DMX "for free" in the TV package, b) the value of the
programming was impaired, as the saying is "you only get junk or
worthless samples for free", c) DMX did not get any revenue to cover the
lost ADR subscribers.


	Greetings, Taras
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