“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.
yes.
I had to search on “painful” and “reallocation” to find this…
http://tvbythenumbers.com/2009/03/27/four-tv-trends-to-track-that-dont-involve-whether-chuck-and-dollhouse-will-be-renewed/15342
@Robert LMAO at the column referenced
Does this mean that the revenue stream for Broadcast networks becomes equalized and that as on cable, number of subscribers/viewers becomes an equal factor and revenue stream to advertisng revenue or does it surpass the advertising revenue stream.
Do you think it’s conceivable that network TV stations cease to be broadcast over the air for free in the next decade?
With the broadcast networks on the cusp of receiving retransmission fees for the first time and cable TV achieving 60% market penetration in the US, the benefits of delivering free broadcast TV seem to be less and less. They just made the conversion from analog to digital signals in the US and as cable TV even becomes more common, I think there will be a push to scrap it altogether to use those frequencies for other communication devices like cell phones.
And now with FOX getting its foot in the door for retransmission, the possibility could come up that a broadcast network could remove itself from the air in favor of achieving higher transmission fees to offset declining advertising revenues. If a channel like ESPN gets $3.65 per subscriber, a channel like FOX should easily be able to get $5.00 if there is no free alternative.
I believe nearly 90% of the US has the option of using some form of cable TV now too so is free TV coming to an end in the foreseeable future?
val, my guess is that for broadcast networks advertising remains a greater source of revenue than retransmission fees for quite some time, but for the cable networks that I recall seeing information for, carriage fees are a larger source of revenue than is advertising. As Robert noted in his linked post, for both cable and broadcast I would expect the relative numbers to converge. Cable networks share of revenue from advertising will increase, and broadcast networks share of revenue from retransmission fees (which was effectively zero in the recent past) will increase.
I am going to echo what Matt said. I expect at some point this means the end of real “free” over the air broadcasting at some point, maybe not now or in the next 5 years but at some point things will change. Television like radio does also provide a public service, so does a station or two become a government subsidized network like the BBC and CTV are? Of course there are all sorts of complications or biases that are tied to those networks. Of course the government indirectly funds PBS already right?
Ahh same thing is already trying to happen in Canada, but the carriage companies are trying to avoid it, so now the big local tv networks are trying to get 10 bucks from each subscriber, which I disagree with, since my cable me is high enough, but the rich will always try and get richer I guess over 1 billion dollars isn’t enough for them. Well in Canada supposedly the networks make around 400 million, but even still the economy is making things work and yet when things get better the costs never go down.
@Empire how are they doing that?
You know what I want is total on demand television if they go that route. Let me pay for the individual networks or even shows I want to watch and they can bundle as they do now. I only watch really 4 or 5 networks. We pay for cable, have to site through advertisements, and get sacked with 70 or 80 channels we don’t watch out of the 100 we might get. I know that’s what I get with uVerse.
@ Val
The local networks having been asking the CRTC (Canadian Radio Television and Telecommunications Commission) to impose a tv tax basically. It would be anywhere from 5-10 dollars each month. So now matter which company your with whether it be Satelitte or cable, that tax might be imposed. Actually a couple months ago we already starting getting a fee to pay. It’s the LPIF (Local Programming Improvement Fund), which basically is a tax of 1.5 % of your bill and goes directly to fund to help the networks.
if the Networks play their cards right i see the broadcast nets ssurvivng along side the internet and the cable nets going.
The networks, CBC, NBC, and ABC aren’t going anywhere but they in effect become almost like a cable network if they start getting retransmission fees so in the end the consumer is paying indirectly for them. It probably means pricing for cable television goes up at some point, big shock.