Retrans, Net Fees Crucial To TV's Bottom Line
Retransmission and Internet revenues can't climb fast enough for TV stations. But in a few years, both will be contributing significantly to stations' coffers.
Each revenue source will be over the $1 billion mark, according to two recent estimates. A recent projection from SNL Kagan said that retransmission consent fees will rise to $1.2 billion by 2011. A separate forecast from BIA Advisory Services noted that overall TV station Internet dollars will hit $1.1 billion by 2013.
Combined at $2.3 billion, both retrans and Internet revenues will be about 14% of what stations will grab for traditional TV advertising revenues -- which have been projected by BIA to hover around the $17 billion mark for the next several years.
CBS alone has said retrans fees alone will translate into $200 million to the company's bottom line.
In two years' time, retransmission revenues would be more than double the $500 million for 2008, according to Kagan. 2009's revenue will climb about 50% to $739 million from 2008.
Most of the current retransmission money -- 62% -- comes from the top 25 markets. According to the Kagan study, stations get pretty much half of their fees from cable and the other half from satellite -- currently, $352 million and $315 million, respectively. A smaller piece comes from new telco services ($71 million).
Kagan notes, however, that cable's share of the retransmission fees climbs more quickly than other programming distributors near term. According to reports, stations get an average of 25 cents a subscriber for their retransmission deals.
Sinclair Broadcast Group derives the highest percentage of its revenues from retrans revenues -- 14% -- more than any other station group. The average for TV stations' groups is about half Sinclair's: around 5% to 10%.
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