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TV Networks want share of Retransmission Consent Fees [Telecom]

I subscribe to Broadcasting and Cable magazine's online news forum
"B&C Today" for news of the latest shenanigans in the broadcast TV,
cable TV, and satellite TV industries.

http://www.broadcastingcable.com/newsletter/B_C_Today/

Several recent articles have discussed attempts by broadcast TV
networks to "share" retransmission consent fees that affiliate
stations have extracted from cable TV and satellite TV
retailers. Here's a link to a recent article that summarizes the
situation:

| Networks Seek Dual Revenue Stream
| Media chiefs want retrans cash for O&Os--and affiliates
| By Claire Atkinson -- Broadcasting & Cable, 11/6/2009

http://tinyurl.com/yerry86

At the moment, this is a private squabble between the broadcast TV
networks and their affiliate stations.  But if the networks are
successful in this effort, it will impact stations' bottom lines.  The
stations, of course, will then attempt to extract even more money from
cable TV and satellite TV retailers.

This is the latest round of a battle that's been going on for years.
Traditionally, networks have paid their affiliate stations
"compensation" for carrying their programming.  Prior to the Cable Act
of 1992, the stations got a free ride on cable TV and satellite TV
retailers, but stations couldn't charge retailers for retransmission
rights.  But it was still a sweet deal for the stations: they got paid
for carrying network programming and got a free ride on retail
distribution networks.

When Larry Tisch was running CBS, he attempted to cut compensation,
with disastrous results.  Coupled with his decision to drop NFL,
affiliates revolted, and many of them switched to Fox after Fox picked
up NFL.  CBS lost many of their major market VHF stations, and Fox
managed to turn the Big 3 into the Big 4.  (See Ken Auletta's "Three
Blind Mice: How the TV Networks Lost Their Way" for a fascinating
account.)

The 1992 Cable Act allowed stations to impose "retransmission consent"
fees on cable TV and satellite TV retailers.  For several years after
1992, retailers were successful in refusing to pay these fees.  But in
the past few years, the stations have been increasingly successful.
The ultimate sweet deal: they get paid compensation by the network for
carrying network programs, and they get paid retrans fees by the
retailers that distribute the programming to their customers.

Understandably, the networks want a piece of the retransmission
consent pie. You can guess who will end up paying for it.

Neal McLain




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nmclain (7)
11/10/2009 12:59:22 PM
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