As Cable MSO’s/Satco’s Start Paying Broadcast Networks; Small Cable Networks May Get The Squeeze
“In our battle to manage our economics, we will look to repackage channels where we have over-distributed, or frankly just to remove certain channels from our platform if they are not relevant,” [Derek] Chang [DirecTV EVP of content strategy and development] said at the conference. “Is there a place for channels that only serve a small fraction of our audience? Should we have to pay retrans fees and continue to carry channels which were once considered to be part of the equation when we didn’t pay retrans fees? As the marketplace changes, these questions become more important for our entire industry.”
This is no surprise at all to me. As the cable MSOs and satellite TV providers begin to pay retransmission fees to the broadcast networks (when they weren’t before), the money’s got to come from one of three places (1) their own bottom line, (2) consumers, (3) cable networks existing share of retransmission fees.
Be certain that (1)’s at the bottom of their list, and with the economy in the tank (2) risks them losing subscribers. Bad news for the little cable networks.