Retrans

This is the fourth installment in a series on TV retransmission fees. Previous installments focused on introducing the series, PR and television audiences, and regulation. In brief Disney, WABC's parent company demanded a per-subscriber retransmission fee from New York area cable provider, Cablevision. Cablevision thought the fee was too much. A messy public battle ensued and WABC disappeared from Cablevision at midnight on Sunday, March 7, night before the Oscars. If you want to learn more about retrans in general, check out this great article from Broadcasting & Cable.

The latest public battles over retransmission consent are a clear indication that television business models are becoming increasingly unstable. Retrans has always been an easy way for national networks to get things they want--like carriage for their cable stations, but until recently, retransmission fees were not part of national networks' business models for owned and operated (O&O) local stations. So, what's changed? Business models are up in the air because of digital distribution, network culture, and new players--like Google--entering the TV market. This is scary and some bad things could happen:

1. Hulu, cord cutters, and piracy will ruin the TV industry.


2. The economy and declining ad revenues will ruin the TV industry.


3. The ratings industry's failure to measure digital audiences will ruin the TV industry.

This is all to say that networks know they're leaving money on the digital table, as it were. While they're scrambling to adapt their business models, it's easy to grab some low hanging fruit and collect a few extra million in retransmission fees.

Continue reading "Why We Should Care About Retrans: Conclusion" »

Posted by Sheila Seles at 10:00 AM | Permalink | Comments (0) | View blog reactions

This is the third installment in a series on TV retransmission fees. The introduction and first installment ran last week. In brief Disney, WABC's parent company demanded a per-subscriber retransmission fee from New York area cable provider, Cablevision. Cablevision thought the fee was too much. A messy public battle ensued and WABC disappeared from Cablevision at midnight on Sunday, March 7, night before the Oscars. If you want to learn more about retrans in general, check out this great article from Broadcasting & Cable.

Battles over retransmission consent are happening because federal regulations give broadcast TV stations the right to negotiate with cable providers for carriage. Must-carry and retrans are among those sticky legal issues--like copyright-- that were meant to protect individual, but have come in the digital age to be used as a tool against consumers.

There's some explanation required here. I'll try to make it as brief as possible and get to the good stuff.

Brief history of Must-Carry and Retransmission Regulations

• "Must-Carry" regulations were first created in the 1970s to help smaller broadcasters survive against as cable TV came on the scene. These regulations made it mandatory for cable operators to dedicate channels for most major over-the-air stations in their designated market area (DMA).
• The Consumer Protection and Competition Act of 1992 addressed must carry laws, allowing cable operators to drop redundant signals in their DMA. For example, cable providers wouldn't be required to carry two NBC affiliate stations in the same DMA.
• In 1994, The FCC added the concept of "retransmission consent" to the mix. This meant that broadcasters had to agree to be carried by cable providers. This gave broadcasters the power to negotiate with cable providers.
• Must-carry regulations have been challenged several times at the Supreme Court level, but they've been upheld.
• The transition to digital television distribution hasn't had much of a consumer-facing effect on must-carry or retrans regulation.

Must-carry laws and retrans consent are two federal regulations that were originally created to protect small television broadcasters. While these laws still protect small broadcasters, they've also given more power to national networks and large holding companies.
This is because broadcast networks are owned by different entities in different markets across the country. Some stations are considered owned and operated (O&O) by national networks. This means that the stations are um... owned and operated by the national networks. Currently, O&Os are allowed to reach only 39% of the country. The remainder of the US is served by network affiliates, stations owned by independent parties who negotiate with national networks for programming.

The market isn't the same as it was when these regulations were passed. These regulations were created to level the playing field for stations and cable providers, but the balance of power has shifted toward networks for several reasons.

Continue reading "Why We Should Care About Retrans Part III: Regulation" »

Posted by Sheila Seles at 10:30 AM | Permalink | Comments (1) | View blog reactions

This is the second installment in a series on TV retransmission fees. The introduction ran yesterday. In brief Disney, WABC's parent company demanded a per-subscriber retransmission fee from New York area cable provider, Cablevision. Cablevision thought the fee was too much. A messy public battle ensued and WABC disappeared from Cablevision at midnight on Sunday, March 7, night before the Oscars. If you want to learn more about retrans in general, check out this great article from Broadcasting & Cable.

WABC and Cablevision had already been engaged in a nasty fight to win the hearts and minds of Cablevision subscribers before WABC went black at midnight on March 7. ABC and Cablevision each ran a series of ads blasting the other. Check out the two ads below. Both are propaganda its best and most manipulative, but they each present a very different picture of why audiences should care about TV and the retrans battle.

Here's Cablevision's commercial:

Here's WABC's commercial:

So which is more effective?

Continue reading "Why We Should Care About Retrans Part II: Battles for the TV Audience" »

Posted by Sheila Seles at 8:00 AM | Permalink | Comments (0) | View blog reactions