MediaPost, a broadcast trade publication, posted a story online that questions the viability of retransmission fees from cable operators to TV stations.
According to the article, “TV stations are now getting millions from retransmission deals from cable operators. Have they been responsible for cable operators passing on these costs to consumers?
The American Cable Association asserts that cable subscription rates have risen as a result of “excessively large retransmission consent gains” — blaming the money that TV stations have received in recent years from cable operators to carry their signals.
The National Association of Broadcasters disagrees, saying the cable operators’ gross profits increased to $62.99 per subscriber per month in 2006 from $48.96 per subscriber per month in 2003 — an increase of $14.03 per subscriber per month.
But this was not in line with cable operators’ growth in overall programming expenses, including retransmission fees — which have risen to $18.47 from $15.63 — a small increase of $2.84 per subscriber per month.”
The addition of retransmission fees has led to TV station owners playing hardball with cable operators, forcing them to either “anty up” a higher fee or shut their signals off, leaving viewers in the middle. In a word, it’s “blackmail”!
Retransmission fees are what cable operators in Canada fear when TV broadcasters, such as CTVGlobemedia and CanWest proposed the same law to the CRTC, the Canadian equivalent to the Federal Conmmunications Commission. The CRTC refused to go along with the proposal.
This has led, in part, to mass layoffs with the top broadcasters across Canada due to a lack of revenue, though the world wide recession was pretty much the reason. Unfortunately, the topic will not go away. It’s just a matter of time before this issue is brought up again before Canadian lawmakers.
Only this time, they may have lawmakers who’ll support the idea.