Separate names with a comma.
Discussion in 'General DISH™ Discussion' started by Paul Secic, Nov 23, 2013.
Station Retrans Fees To Reach $7.6B in 2019: SNL Kagan
Researcher, Citing Higher Rates, Station Group Consolidation, Revises Forecast Higher
SNL Kagan has revised its projection upward for the amount of retransmission-consent fees TV station owners will collect over the course of this decade.
The Monterey, Calif.-headquartered researcher forecasts that retrans fees will reach $7.6 billion fees in 2019, up from $3.3 billion this year. SNL Kagan attributes the growth projection to the rising monthly sub fees TV station owners have garnered in recent negotiations, as well as the consolidation of the business over the last couple years, which has often led to higher retrans rates after acquired stations are brought under larger groups' umbrellas.
SNL Kagan’s current projections call for retrans revenues to jump to $7.15 billion by 2018, compared with the group’s 2012 forecast of $6.05 billion for that year. SNL Kagan said the environment has improved for TV station owners, which have increasingly obtained rates they believe are closer to the value they bring to multichannel video services.
CBS set the bar. By 2017, it will be getting 2 dollars a month. That means that the other networks (ABC, NBC, FOX, UVN) will also get as much, except for Telemundo, which will settle for 1.50. So, by 2017, we'll be paying 11.50 a month for OTA broadcasters.
In the past few years as these fees keep going up, many subscribers have dropped to smaller packages. There is a limit on what people will pay. However, I don't think Dish sells any main packages without locals do they? At one time locals were not included. The super stations may go in time though. That will be a shame if we lose those. I think they are grandfathered in now, so no new subs can sub to them. But more of the same fighting and the subscriber will lose the local station for a time. I guess the OTA antenna will be out best bet in the future, if available. The big advantage of the OTA is the sub channels.
Would this be on top of the $5 we pay now?
DIRECTV and dish need to go bak to separating out locals payment for sat feeds so those that can grab them over the air can do that and not pay for locals assuming that these stations get paid by the number of subs.
I stil say it should be flat out illegal to charge a retrans fee to someone who's simply pushing their signal along a different technical path but to the exact same customers they can or should be able to reach over the air.
I really hope aero wins and that will at some point out an end to retrans fees or limit them big time at least.
The big advantage for me with OTA is the higher picture quality. My Dish LiLs are riddled with artifacts and color quashing. Better than nothing by a long shot. Even better than NTSC was. But nothing like what I get with an antenna.
If it wasn't for PBS - I wouldn't bother with SAT for my locals. I get them great, and fortunately for me - my locals look good on Dish as well. They also look great OTA (except PBS).
As I've said before and have also seen from a few others, they should be paying to be carried, not being paid.
I wonder if the national networks will start scrambling their signals and require a box and subscription fee?
You mean would they just drop their over the air and become a cable channel only? Ha, good luck making as much money that way. And I'm sure the FCC would be happy to sell the bandwidth to someone. They can't scramble and force people to pay to receiver their channel via antennas. Which is part of the reason retrans fees are bogus in the first palce. It's allowing them to get around the law that says they can not charge people to receive their channel over the air!
I can see both sides of this issue. On the one hand, we the customers have the means to receive the programming for free, so why should we have to pay for it? But on the other hand, your cable company, Dish, DirecTV, etc. are all companies that are making profits by distributing copyrighted programming, and why should they make a profit by taking someone else's copyrighted programming and redistributing it without paying for it? The reality is that Dish and DirecTV dedicate massive amounts of bandwidth to LiL carriage not out of the goodness of their hearts but because they know it is necessary in order to have serious market penetration. Satellite only took off in popularity when they could offer locals.
While I'd love to see the LiL offered as an add-on package, that probably isn't going to happen. Especially with Dish, since the PTAT feature is so heavily touted.
Here's the "logic" the way I see it.
If I'm the station owner...
I'm distributing a signal for free. I have a "franchise" that says I'm the only one in the area who can broadcast that signal.
How do I make money? By charging for commercial time.
Some people can't get my signal very well for any number of reasons.
So here comes someone who offers to take my signal and get it out to those people who can't get it - still inside my franchise area.
So what do I do? I charge them through the nose to take it.
...and that's where the logic breaks down. They didn't complain when cable carried their signals back in the 70s and 80s. Only when recording technologies came of age, threatening their advertising model did this insanity start.
Remember, the stations got FREE USE of the PUBLIC AIRWAYS for DECADES and then got a FREE upgrade in bandwidth when HD came around. Oh, they cried about all the money they'd have to spend on the equipment to support it but somehow I failed to she a tear after all those years of free use.
Now the production companies are starting to discover that they don't need the networks and those networks are wondering if they really need the local stations. After all, it's not just HBO and other cable nets making a splash. Now Netflix and Amazon are getting in the game - cutting out more than one middleman in the process.
So why are they so desperate for the retrans money? One theory I have is consolidation. The billions of dollars spent on buying up bundles of stations has to be paid for SOMEHOW and those loan payments aren't cheap.
...but wasn't that ONE of the reasons that ORIGINALLY, the networks were NOT ALLOWED to do what they've done? (In addition to the whole 'foster competition' thing and 'maintain local ownership of local stations').
I fully agree. I don't watch TV much because most of it is junk.
The biggest change between the original cable systems and what we have today is not the recording technology it is the competition. The first cable systems rebroadcast television stations. There might be a community access channel or a locally produced weather channel but there was not competition from satellite fed cable channels. The competition that cable brought to the community was a clearer signal from existing stations and possibly a distant signal picked up by a huge antenna few home viewers would bother installing or relayed by microwave.
Recording technology only came into play as it introduced the concept of copying television feeds. Before the home VCR people couldn't copy and potentially share content. When stations complained about that copying they realized that rebroadcasting their signals was also copying - and copyright was applied to rebroadcast. Cable systems were given permission to retransmit content ONCE over their networks, either live or delayed but only once. Eventually systems were prohibited from any retransmission without permission.
If you were a station owner you would be looking at competition for your station's viewers and advertising dollars lost because viewers have something else to watch.
A station owner would not consider the airwaves free. The annual fees that they pay the FCC make the airwaves non-free. Older stations may have originally got their channels for free back in the 50s or 60s - but they also have many decades of free transmission plus the requirement to continue free transmission on their OTA feeds. They are not required to allow free retransmission of their OTA feeds on cable and/or satellite.
More dollars lost to competition. At least in the eyes of a station owner. Every popular show that ends up on cable cuts into their potential earnings.
Cable and satellite broke the competition. Maintaining local ownership wasn't one of the original goals ... the goal was to provide a diversity of voices. The rules were there to protect communities from one voice dominating the media. Those rules are still in place but with so many additional voices available multiple ownership is easier. Did the rule that an owner could not own more than seven stations prevent a single voice from becoming the only voice in the country? At the time it was put into effect it probably did. But with so many voices that rule is no longer needed.
Economic reasons drove the stations to look for any additional revenue stream they could find. In recent years they have been pushed by their networks to raise money through cable/satellite retransmission fees. If you ever get to talk to a station owner or manager ask about "non-traditional revenue". Anything they can do to make an extra dollar or million and keep the station running.
At least as a station owner the above may be their views.
As a satellite home viewer I agree with you, not the station owners, and believe retransmission should be free. If there are any fees due because of "copyright" then such copyright fees should be a statutory rate paid to the content owners - not a "non-traditional revenue" fee paid to stations who themselves are retransmitting someone else's content. But as a station owner - they are not going to give away anything for free unless they have to.
I am sure that cable companies and sat companies don't make money on over the air channels and if they do its probably less than any other channel ever. They have to spend millions ever year for all the facilities for all channels many of which may not even ever be watched (there's no way I watch even half the stations that are carried by DIRECTV in my area).
They carry them because they facilitate other profit centers, namely the other packages, but they themselves aren't really making money on these channels in any given market and yet now they have to increase fees to pay for retrans fees for just a couple channels that have larger audiences. If over the air channels where broken out and had to be paid for and they set the pricing to make money on them I'd bet they'd charge close to $15 or more a month per market. Heck in Los Angeles they'd probably charge $25 we have so many dang channels.
I suppose there are obtuse business and legal reasons preventing this, but I could imagine Ergen (and soon followed by D*) to not markup locals, and bill them prominently and separatelyevery month.
The cost of delivering locals to one customer in a market is the same as the cost of delivering them to all customers, plus the per customer fees charged by the station. If DISH allowed people to opt out DISH would lose the income but only save the retrans fees.
If the customer cost of locals in a market was JUST the retrans fee then DISH could continue to collect the money needed for the infrastructure regardless of if people subscribed or not. The only problem I see with that is that it would expose the retransmission fees being paid. Such things are generally considered confidential. But a little sunlight would be nice.
The key would be how many people would opt to go over the air and how much money the channels would lose. DIRECTV has already mentioned about rethinking their over the air hardware and direction... If they could save customers $15 a month that may mean customers would stay rather than look to leave for another provider or cord cut. Better to give up some income than all of it,
I know the spotbeam technology would limit this greatly, but allowing stations to sell their signal outside of their assigned DMA might be an income source worth pursuing.
I would be interested in buying stations from my state capitol DMA as my local stations do not cover my states governance AT ALL, and then I would at least have a clue what is going on in the legislature.