[opendtv] Re: Broadcasters, Cable Spar over Retrans

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Fri, 3 Jun 2011 07:35:13 -0400

At 9:51 AM -0400 6/2/11, John Shutt wrote:

Free Ride?  I don't think so.
Oh, we may not explicitly pay for our spectrum use, but we pay in other ways with required hours of Children's Programming, EAS/DEAS, limits on commercials, limits on explicit content, required public service, and a myriad of other regulations and requirements in order to keep and renew a broadcast license.
Yes there are regulations and some quid pro quo, but I've been in the middle of this for decades. The truth is that broadcasters have all kinds of inventory that is next to worthless due to the small size of the audiences it can attract (which is one reason you see stations running so many informercials). 

If there are limits on commercials, somebody forgot to tell the congloms.
Commercial Clutter: Clutter, particularly on network TV during primetime hours, has risen almost 60% over a 40-year period. In the early 1980s, 19% of TV content was devoted to commercials. By 2010, it had climbed to 25%. (TV Dimensions, 2011)
And this does not include the additional minutes/percentage of promos that the networks and stations run. There was a time that there were about 6 minutes of commercials per half hour of programming. Now there are commercial breaks that are 6 minutes long (network/local/network) station breaks.
The one valid comment is that content restrictions are the Achilles heel of FOTA broadcasting. And this is one of the major reasons that the congloms are developing so much 1st run content for cable networks where these restrictions do not apply.
In addition, we have hand to spend literally millions over the past decade in order to continue to use our "free ride" spectrum in order to comply with the transition to digital broadcasting. This is over and above what would have otherwise spent in basic plant maintenance.
Yes there was a transition cost. This is true for your competitiors as well, except that they spent tens of billions for not one but two systems upgrades during the same time period. And MANY stations added little or nothing to their engineering/equipment budgets to pay for these transition expenses; they just applied a big chunk of their budgets to transmission upgrades for a few years. At best you can make the case that other needed upgrades were delayed; but many stations have cut way back on engineering budgets and investments in new equipment, because of ECONOMIC reasons.
And if we do make additional revenues with our spectrum, we have to pay a percentage to the Feds, so the only "free ride" spectrum is the spectrum used to deliver a "free ride" signal to our viewers.
The percentage is only 5%. I'd wager that more than 5% of your mobile phone bill goes to pay for spectrum. But this is largely irrelevant, as broadcasters have simple focused on multicasting and other opportunities that do not invoke the 5% fee.
Clearly the view from a PBS affiliate is very different than that of a commercial station in a top fifty market. Last time I checked these large market stations are still printing money at rates of return that are virtually unobtainable for any other American industry. 

Regards
Craig


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