[opendtv] Re: Analysis: GET SET FOR COMING D.C. RETRANS FIGHT
- From: "John Willkie" <johnwillkie@xxxxxxxxxxxxx>
- To: <opendtv@xxxxxxxxxxxxx>
- Date: Wed, 7 Mar 2007 12:02:34 -0800
If that turns out to be the case, there is nothing preventing the
distributor from bypassing local stations.
This is the 'tension' in what's called the 'federal-state' form of U.S.
broadcasting. The network's work-around has been (except for ABC/Disney,
and to a lesser extent NBC) to buy up any large market affiliate they can.
John Willkie
----- Original Message -----
From: "Tom Barry" <trbarry@xxxxxxxxxxx>
To: <opendtv@xxxxxxxxxxxxx>
Sent: Wednesday, March 07, 2007 10:34 AM
Subject: [opendtv] Re: Analysis: GET SET FOR COMING D.C. RETRANS FIGHT
> Actually I think the article makes a fairly decent case for retrans
> negotiations. But I still worry the affiliates will be caught in the
> middle in the future, buying network programming and reselling it to
> cable et al. That might or not be a workable business plan in the long
run.
>
> - Tom
>
>
> Craig Birkmaier wrote:
> > A PRO Retrans Consent Editorial.
> >
> > I love this part...
> >
> > But at this point I would say that it is in neither broadcasting's nor
> > cable's interest to encourage over-the-air reception. Instead of handing
> > out rabbit ears in the middle of retrans fights, cable operators would
> > be far better off paying broadcasters and making them partners in
> > driving folks to sign up for cable.
> >
> > Regards
> > Craig
> >
> >
> > http://www.tvnewsday.com/articles/2007/03/07/daily.8/
> >
> > Jessell at large
> > GET SET FOR COMING D.C. RETRANS FIGHT
> > TVNEWSDAY, Mar. 7, 8:46 AM ET
> >
> > Now that broadcasters are getting the upper hand in retrans
> > negotiations, cable wants to gut broadcasters' rights in Washington.
> > Fortunately, broadcasters hold the high ground.
> > By Harry A. Jessell
> >
> > You can almost feel it.
> >
> > Retrans has reached the tipping point.
> >
> > All of a sudden, it seems, the leverage in retrans negotiations has
> > shifted to broadcasters. A growing number are now able to extract fees
> > from cable operators who want to carry their signals.
> >
> > With hard-nosed broadcasters like Nexstar's Perry Sook and Sinclair's
> > David Smith leading the way, TV station groups are tearing up old
> > revenue projections and factoring in millions in new retrans dollars.
> >
> > Two weeks ago, CBS CEO Les Moonves finally made good on his big retrans
> > talk by cutting deals involving nine operators and more than one million
> > subs. He later said the deals will yield $6 million a year-50 cents per
> > sub per month.
> >
> > Moonves senses the shift. "[Did] you noticed that these nine MSO deals
> > were done without a whole lot of noise?" he asked security analysts last
> > week. "The MSOs are realizing that it's better to get along than to
fight."
> >
> > LIN TV is excited because it thinks it has the upper hand and most of
> > its retrans deals with cable are now ripe for renewal. Last week, it
> > announced a deal with Cox involving nine stations in five markets.
> > Nobody is talking terms, but everyone is assuming that cash was
involved.
> >
> > Even Gray Television, which has long had a go-along, get-along attitude
> > on retrans, is starting to talk about getting its "fair share" from
> > cable operators.
> >
> > "We certainly see the momentum shifting," Gray CFO Jim Ryan said at the
> > Bear Stearns Media Conference yesterday.
> >
> > The tipping point was a long time coming.
> >
> > When Congress granted broadcasters retrans rights in 1992, the
> > presumption was that they would immediately begin receiving monthly
> > payments from operators for their signals.
> >
> > For a lot of reasons, it never happened-until now.
> >
> > And let me be clear: retrans is not easy. To squeeze money out of cable
> > operators takes the right set of circumstances and a willingness to risk
> > the short term for the long term. It's not for everyone.
> >
> > Of course, now that broadcasters are having some success, the cable
> > operators want to change the rules. They want Congress or the FCC to
> > shift the leverage back to cable operators by restricting broadcasters'
> > retrans rights.
> >
> > For the most part so far, the effort to gut retrans has been led by the
> > American Cable Association, which represents smaller, independent cable
> > operators who were the first to feel broadcasters' muscle.
> >
> > But as TVNEWSDAY's Kim McAvoy reported last week, cable's big lobby-the
> > National Cable & Telecommunications Association-has now taken up the
fight.
> >
> > That sets up what should be a titanic contest between NCTA and the NAB
> > this year over retrans that will be real test of their relatively new
> > leaders, Kyle McSlarrow and David Rehr, respectively.
> >
> > Nothing less than the financial health of TV broadcasting is at stake.
> > Stations need retrans revenue to offset the loss of network comp and the
> > inexorable decline in national spot.
> >
> > Fortunately, the retrans case for broadcasters is clear and simple.
> >
> > Cable operators pay monthly affiliate fees to cable networks that have a
> > fraction of the audience. If ESPN is worth $2.50 per sub per month,
> > surely the local CBS affiliate (NFL, The Masters, March Madness) is
> > worth 50 cents.
> >
> > Cable operators say that paying retrans fees will cause them to raise
> > rates. Nonsense. They can find money for broadcasters simply by cutting
> > fees that they inexplicably pay to cable networks that hardly anybody
> > watches. Better yet, they can drop those networks and send broadcasters
> > an even bigger check.
> >
> > Broadcasters provide local public service. They have reporters on the
> > street and anchors that show up at community events. They have satellite
> > trucks, helicopters and weather radar that can track tornadoes. Spike TV
> > has World's Wildest Police Videos and Late Night Strip.
> >
> > Satellite TV operators and telephone company offering the exact same
> > service as cable are willingly paying retrans fees. No fuss. They enter
> > a market, and the first thing they do is lock up the best programming in
> > town-the programming they need to compete with cable. If the new
> > entrants can pay, entrenched cable can pay.
> >
> > Cable operators have always recognized the value of retrans rights, but
> > have insisted on non-cash compensation-carriage of cable networks in
> > which the broadcasters had an interest or committing to advertising buys
> > on stations.
> >
> > But now that broadcasters are demanding cash, the operators pretend that
> > the rights have little or no value.
> >
> > Part of cable's anti-retrans rhetoric is that operators shouldn't have
> > to pay for "free TV." Well, guess what? Local broadcasting isn't free.
> > In fact, it costs a lot of money to build, maintain and operate a
> > state-of-the-art TV station, to license syndicated programs and to
> > produce several hours of local news each day.
> >
> > Right now, broadcasters are still paying the bills for digital
> > transmission facilities and they are preparing to spend millions more so
> > that they can produce local news in high definition and stay competitive
> > with other broadcasters.
> >
> > The only thing that's free about broadcasting is over-the-air reception.
> > As part of their pact with the government, broadcasters are committed to
> > making their service available to anyone who can afford a TV set.
> >
> > But at this point I would say that it is in neither broadcasting's nor
> > cable's interest to encourage over-the-air reception. Instead of handing
> > out rabbit ears in the middle of retrans fights, cable operators would
> > be far better off paying broadcasters and making them partners in
> > driving folks to sign up for cable.
> >
> > That's what the satellite operators and telcos have done. When a retrans
> > fight breaks out, DirecTV and Echostar swoop in to pick off unhappy
> > cable subscribers. Mediacom says it lost 7,000 in its recent retrans
> > fight with Sinclair.
> >
> > Cable's call for retrans reform is really a call for more government
> > involvement in what should be-and has been for a decade and a half-a
> > private negotiation. Does anybody really want more regulation, more FCC
> > meddling in their business?
> >
> > The broadcasters are playing defense right now. All NAB has to do is
> > maintain the status quo.
> >
> > But perhaps it should consider offense. Here are a couple of ideas that
> > NAB may want to push when cable comes to shove:
> >
> > An antitrust exemption that allows all the stations in a market to
> > negotiate together for retrans fees. This would balance things out in
> > market dominated by one or two cable operators. Cable could hardly
> > protest. Last year, ACA proposed that small cable systems be allowed to
> > do the very same thing.
> >
> > A minimum retrans fee for every TV signal. In this way, Congress could
> > insure the future of local broadcasting-a cornerstone of its
> > communications policy since the 1920s. To be fair, the fees could be
> > tied to ratings. The more viewers a station has, the more money it would
> > get. Stations could accept the minimum or negotiate for higher fees.
> >
> > In the coming debate, both sides will claim that only they have the true
> > interests of the consumer at heart and that the other side doesn't
> > really care about either mom or pop at all.
> >
> > But, face it, this isn't a consumer issue. This is business.
> >
> > If cable operators want broadcasters' signals, they just have to pay for
> > them.
> >
> >
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>
> --
> Tom Barry trbarry@xxxxxxxxxxx
>
>
>
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