In case you missed it, the Oscars were on March 7. The show was pretty good, but there weren't many surprises (except Ben Stiller dressed as one of the Navi from Avatar .) As a TV geek, the Oscar races were almost upstaged by a way more interesting battle going on between WABC--the local ABC station in New York--and cable provider, Cablevision. WABC and Cablevision were stuck in negotiations about retransmission fees, and when they couldn't reach an agreement, WABC pulled its station from Cablevision's lineup. The result: you may have missed The Oscars--or at least the first few minutes of the telecast--if you were among Cablevision's 3 million subscribers in the greater New York City metropolitan area.
So, what are retransmission fees? The 1992 Cable Act allows local broadcasters to negotiate carriage contracts with cable operators every three years. Broadcasters can either demand that the cable operator "must carry" their station or they can negotiate for a per-subscriber fee from the cable operators--this fee is knows as a retransmission fee. If broadcasters demand a retrans fee and cable operators don't agree to it, broadcasters can pull their station from the cable operator's lineup. That's what happened in the case of WABC. Disney, WABC's parent company demanded a retrans fee from Cablevision. Cablevision thought the fee was too much. A really messy public battle ensued and WABC disappeared from Cablevision at midnight on Sunday, March 7, the night before the Oscars. Right before it went black, WABC aired a message reading, "Cablevision has betrayed you again."
This latest round of retrans battles is about more than just, well, retransmission fees. The struggle over these fees has gotten really interesting as the definition of television shifts away from traditional over-the-air broadcasting toward digital distribution and even IPTV. Retrans negotiations are the front lines where stakeholders are battling over the fate of the changing television business. The discourse around retrans encapsulates the uncertainties facing television networks, local network affiliates, the multichanel video program distributors (cable companies, satellite TV providers, telco TV providers), federal communication law, and the future of watching television. Over the next few weeks, I'll be looking at the changes in the television industry through the lens of retrans battles. Trust me, it's way more interesting than it sounds. Expect angry letters, crying cartoon characters, and an appearance by a former presidential candidate!
Tomorrow: What retrans means for the TV audience.
It's not an unprecedented battle. In 2000, amidst contentious negotiations between the Walt Disney Co and Time Warner, Disney's channels were pulled from Time Warner, including broadcast network ABC. When Time Warner customers tried to watch those channels, all they saw was a blue screen with a banner that read, "Disney has taken ABC away from you." The outage affected 3.5 million Time Warner customers and lasted for 39 hours. The move infuriated subscribers and the company later expressed regret for the way it handled the negotiation.