[opendtv] News: Fox News Wants To Double License Fees

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
  • Date: Fri, 6 May 2005 05:31:34 -0400

An indication of things to come?

Would I pay $.50/month to view FNC if it were offered ala carte? 
Perhaps, but if I did, I would not pay for the other news channels, 
so the net to the cable/DBS operator would be less. The dirty little 
secret of multi-channel TV is that they are collecting huge sums of 
money for the content moguls, and with the current tier system we are 
forced to pay for all the stuff we don't watch.



Fox News Wants To Double License Fees...

By John M. Higgins -- Broadcasting & Cable, 5/5/2005 1:56:00 PM

At least. Cable operators are already bracing for tough negotiations 
to renew Fox News Channel, but News Corp. is signaling just how tough.

The network is looking to at least double the license fee it charges 
DBS and cable systems to carry the network. Currently, Fox News' fee 
averages around 25 cents per month, per subscriber.

On News Corp.'s earnings conference call Tuesday, President Peter 
Chernin said that he is looking at another 25 cents per month, at 
least. "Trust me, we think we're worth a hell of a lot more than 
that," Chernin said. 

Since Fox News reaches more than 80 million subscribers, that 
increase "its worth $250 million to the bottom line."

Fox News launched in 1996, so its carriage deals start expiring next September.

The network's average license fee is 37% less than the 40 cents rival 
CNN has managed to secure for its two networks (CNN and Headline 
News), growing the price gradually over 25 years.

But Fox has dramatically eclipsed CNN in the Nielsen ratings and 
wants to leapfrog the network's license fees as well. "We invested a 
lot of money and worked really hard to achieve this over the ten 
years, and we believe we should get an appropriate payback," Chernin 

The quest will be difficult.

First, cable and DBS operators are fiercely fighting increases in 
programming costs. Second, a major reason Fox News' fees are even as 
high as 25 cents is the massive upfront payments the network offered 
operators to launch the channel that exceeded $300 million, including 
payments of around $12 per subscriber to the then-top operators, 
Tele-Communications Inc.

Fox has a ton of leverage, including retransmission consent rights 
and the fierce loyalty of its audience base. "We probably have the 
most loyal viewers of any channel in the universe at the moment," 
says News Corp. Chairman Rupert Murdoch
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