[opendtv] Re: Kagan: TV Ad Revs Less In 2013, Than 2006

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Thu, 11 Feb 2010 08:43:33 -0500

At 6:31 PM -0500 2/10/10, Albert Manfredi wrote:
Well, I tend to doubt it too, because the retrans consent fees go to broadcasters, not to the congloms that have mostly sold off their OTA assets. Yes? I guess one could argue that the retrans consent fees indirectly go to the congloms, via the station groups. 

Two errors here.
The congloms have NOT sold off their OTA assets to any significant extent...yet. I believe only CBS has divested a few stations in smaller markets. But I agree we can expect to see more divestitures.
While retrans payments go to the stations, the congloms are making it abundantly clear that they want a cut. If they do not get their pound of flesh in cash, they will simply reduce the number of local ad insertion opportunities in high value prime time and sports programming.
And yes, all of the revenue from network station groups go directly to the congloms, which are all near the national cap in terms of homes reached (about 40% of U.S. homes).
The motivation to the congloms has to be that their higher quality content gives them whatever leverage they need from MVPDs.
Clearly they use what little "high quality" programming they still deliver as leverage in retrans consent negotiations. It is less clear whether this money will be invested in high quality programming for the broadcast networks, or to develop more original programming for their non-broadcast networks... 

or simply to improve the bottom line to keep stockholder happy.

Regards
Craig






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