Last March I wrote that I was watching four trends (that didn’t involve whether Chuck or Dollhouse got canceled) and one of them was reallocation of existing revenue streams, including retransmission fees for broadcast nets:
[…] especially as advertising rates between broadcast and cable begin to equalize, look for the broadcast networks to get a bigger slice of subscriber revenues.
Reallocating the subscriber dollars seems like something that has to happen, especially if the broadcast networks are the most watched networks on cable and satellite offerings. I suspect this will be a very painful process that will occur over quite a few years.
Lately, media coverage of this is heating up, largely due to Rupert Murdoch saying FOX would demand payment for carriage. In an article Titled “Networks Put The Squeeze on Cable” Forbes’ Dorothy Pomerantz writes:
Cable stations get paid through advertising and subscriber fees. Why should broadcasters only rely on ads?
LOS ANGELES — At the News Corp. shareholder meeting last week in New York, Rupert Murdoch sent a tremor through the TV world when he announced that the Fox network will no longer be doing business as usual. From now on, Fox will demand payment from the cable, telco and satellite companies that carry the broadcast network.
Things started to change a few years ago when CBS split from Viacom. Right off the bat, Chief Executive Leslie Moonves announced that he intended to charge retransmission fees for CBS.
“We’re going to get paid for our content by cable operators,” Moonves said at a 2006 investor meeting. “Try running a cable network without the Super Bowl, the Grammys, CSI, The Final Four, Survivor and David Letterman.”
Hat tip to commenter “Mikey” for pointing out the Forbes story.