http://www.tvtechnology.com/news/0002/report-retransmission-fees-boost-local-tv-station-revenues-to-284b/280897
Report: Retransmission Fees Boost Local TV Station Revenues to $28.4B
CHANTILLY, VA.—While increased election advertising and double-digit growth
through digital media offerings were significant contributors to the total
industry revenue for local television stations in 2016, BIA/Kelsey’s report
estimated that nearly one-fourth of the total revenue came from retransmission
consent agreements between local TV stations and cable/satellite companies.
BIA/Kelsey found that stations received $6.8 billion from retransmission
agreements.
“The dependence on retransmission fees has become incredibly important to local
stations and many publicly traded ownership groups because it amounts to nearly
one-third of their revenue,” said Mark Fratrik, senior vice president and chief
economist at BIA/Kelsey. “The fees provide a sound financial basis for the
stations and have also become the foundation for many of the larger stations.
Our analysis also uncovered that even mid-size and smaller market stations are
increasingly relying on the income provided by these fees.”
As a result of the boost in retransmission fees has caused BIA/Kelsey to
include retransmission consent estimates on local television in its “Media
Access Pro” and “Investing in Television Market” reports. Because
retransmission agreements are not made public, BIA/Kelsey developed a modeling
formula that uses public information and industry knowledge to provide an
examination into revenue streams for stations. In the reports, BIA/Kelsey
predicts that retransmission fees will continue to rise over the next five
years.
Other findings in BIA/Kelsey’s report show that television is experiencing
growth in over-the-air revenues, in large part based on the 2016 elections for
president, as well as statewide and local races. Digital revenues also saw an
uptick, generating $1.006 billion, a 10.4 percent increase over 2015.
BIA/Kelsey forecasts a 8.8 percent increase for digital revenues in 2017.
