Will Broadcast Transmission Fees End Up Squeezing Some Cable Networks’ Carriage Fees?
“We should expect headlines (about retransmission fights) will continue,” said Miller Tabak media analyst David Joyce.
Carey wouldn’t quantify how much retrans could mean to the company but said that the Time Warner Cable deal was clearly a “transformational event.”
Carey estimated that about half of News Corp.’s station deals will expire in the next two years, not including similar deals that will run out for its affiliate stations. News Corp. has expressed a desire to get involved in those negotiations too.
Asked if retransmission consent fixes the broken broadcast model, Carey said that was an overly simplistic view.
“It [retrans] puts us on a course where we can generate the profits we should if we run a good network,” Carey said. “Simplistically, you could say it fixes it. It certainly puts it in a competitive place where it has a dual revenue stream like successful cable networks do and those that it increasingly competes with.”
via Multichannel News.
It seems to me with all the broadcast networks (not just Fox) reaching into what is the cable/satellite/telco programming budgets, that something’s gotta give. Of course, the cable companies can increase their customer prices, but they may not be able to do it enough to maintain their existing profitability.
Who gets squeezed then? Either cable/satco/telco operator profitabilty or some segment of the current cable networks, as their next carriage fee negotiations get a lot more difficult.