Just when TV stations have been salivating over what comes with growing retransmission revenues, the broadcast networks could be saying: "Wait a minute -- what about the cost of our
programming?"
Retransmission revenues were thought to be the new land grab for both independently owned TV affiliates and network-owned TV stations. Now, add one more
party: the networks themselves.
A senior executive at Belo Corp., a major ABC affiliate TV station group, now says ABC wants
a piece of its retransmission revenue. How much? Not 100%, was the reply. Nice.
Cable system operators must be smirking a bit -- hoping, in vain, that any riff between the networks and its
affiliates might help their cause. But it won't happen.
Broadcasters are united in their efforts, especially with the digital media winds of change in the air, with fractionalization of
TV viewers, and the dreaded prospect of advertising revenues not coming back.
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TV stations saw "network compensation" disappear some years ago. Decades ago big profitable TV
networks could afford to keep stations -- the only viable distributor of TV content around -- happy by giving them cash in addition to running their network programs. Now the shoes -- and media
profitability -- are on other feet.
Network-owned TV stations hope to gain 50 cents a subscriber per month from cable operators in the coming years. CBS believes $300 million in retrans money
could go directly to its bottom line in a few years. (Reports say News Corp wants $1 a sub!).
This would seem to be fair compared to what ESPN has been getting -- around $3.50 a sub. Other
major entertainment cable networks are at a dollar or higher.
It's true that TV stations depend heavily on programming from outside sources - networks and syndicators. But there is
somewhat of a rev share at work: stations get local ad time to sell, with networks getting the lion's share. (Syndication is more of a 50-50 model for most daytime shows).
Cable has been
eating into local TV recently -- and it could get worse on the local advertising front if Canoe Ventures gets its act together.
Now, just when TV affiliates were hoping to level the playing
field, TV programmers have been knocking -- a lot -- on their doors. It doesn't seem like they're leaving the porch anytime soon.