TV networks' new sources of revenue -- retransmission revenue from cable, satellite, and telco operators, plus a share of retransmission dollars of their local TV affiliates -- could grow to $3 billion in four years.
SNL Kagan estimates that this year, News Corp. broadcast networks (Fox and MNT), Comcast (NBC and Telemundo). CBS Corp. (CBS and CW) and Univision will reach just over $1 billion. The largest, dominating share of that money comes from multichannel services like cable operators -- $861 million -- with $146 million coming from their TV station affiliates.
For 2011, the biggest broadcast network in terms of retrans fees is Univision at $303 million, followed by News Corp. at $257 million; CBS at $181 million; Disney at $104 million; and Comcast (for NBC and Telemundo), a slower starter, at just $16 million.
But all this will change by 2015. SNL Kagan estimates revenues from cable networks, satellite, and telcos, will bring News Corp. $459 million; CBS, $398 million; Univision, $378 million; Comcast, $263 million; and Disney, $205 million.
SNL Kagan says in that year, revenue from its TV affiliates will be at near-parity to that money coming from multichannel services: CBS will get $368 million; News Corp., $341 million; Comcast, $288 million; Disney, $267 million; and Univision, $27 million.
Estimates have been that TV stations have been working on a financial model with their TV networks of around 50 to 75 cents a subscriber -- or a 50% share of TV stations' retrans monies. Although seemingly not good news for TV station owners, SNL Kagan believes that station money going to networks will solidify their relationships.
"Affiliates have begun to view the reverse retrans development as a positive factor, given that it cements the network-affiliate relationship and provides funds for improved programming," SNL Kagan notes.
"In addition, the broadcast networks may minimize the amount of high-value programming made available for free online in order to protect the rising retrans fees revenue stream, which is a positive for the broadcast industry."