[opendtv] Re: News; Affiliates Prepare to Swallow Bitter Reverse-Compensation Pill

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Tue, 15 Jul 2008 00:35:09 -0400

At 5:19 PM -0400 7/14/08, Manfredi, Albert E wrote:
Craig Birkmaier wrote:

 So what happens to a local broadcaster when they start
 collecting retrans consent dollars?

 "The new reverse-comp deals won't always mean cash changes hands.
 In some cases, a station might turn over negotiations for
 retransmission-consent payments from local cable operators and
 let the network keep some or all of what it can get."

In principle, this shift could mean a drastic change in allegiances, or
rather lack thereof.

Take a Euro broadcaster like TF1. They buy content from all of the major
US networks. I've noticed TV affiliates here doing similar things for
sindicated programming, and also in their multicasts.

Why couldn't the affiliates do more of this, also for prime time? The
more the congloms expect from the affiliates, the less hold they would
have on those affiliates, no?

They can and some do. But they generally fall into "Third World TV" status. The advantage of affiliation with a broadcast network is promotion of the network and the programming.

You have a number of independent broadcasters in your market(s). They are able to operate profitably,. but nowhere near as profitably as the major network affiliates. A number of stations have chosen not to renew their network affiliation agreements, choosing to become independents. I know of no examples where the station benefited economically from this decision.

Two examples come to mind. KRON (San Francisco) lost its affiliation with NBC. Ratings and revenues have plummeted and they are having difficulty finding someone to buy the station for a decent price. WJXT (Jacksonville) chose not to remain a CBS affiliate and now focuses on news and syndicated programming. Not sure how they are doing as a result, but the reason they chose not to stay with CBS was related to reverse compensation.

Bottom line, the networks no longer need affiliates. They will suck them dry, then FOTA broadcasting will probably go away.


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