TV Stations Always Smiling, Perhaps Even Profiting, When Helping Their Networks

For TV stations, it’s always about getting a “piece” of the business. Others may call it revenue-sharing or whatever.

CBS All Access, the network's $5.99 a month over-the-top, digital TV cloud service, has made an agreement with its TV stations. How much are stations getting? We don’t know. But we can be sure that's a piece of this puzzle. This is a growing part of TV affiliates/network arrangements, especially as parent networks continue to seek out new digital platforms.

For many, this is a far cry from the moment when CBS, nervous in the wake of Aereo’s seemingly big threat, talked up the possibility of becoming a cable network. Details weren’t offered then on how TV stations would fit into this plan.

To be sure, getting TV stations involved in new digital TV platforms come down mostly to one word: marketing. In an age of fractionalizing media, marketing become ever more important for program discovery and other advertising coordination elements.



The days of big reverse compensation for TV stations may be long gone -- but in an age when where local digital video would seem to be gaining, TV stations have one thing that will separate them from all other newbie video players: premium video, meaning their own produced effort like home-grown local newscasts.

In the future, big TV/media owners are likely to ink more predictable and controllable “rev-share” arrangements -- like, in Disney-ABC’s case, where affiliates pay ABC for the rights to stream the network programming but could recoup those fees and perhaps make a profit.

Right now CBS, and other networks are not shy about grabbing part of TV stations’ retransmission revenues. In 2014, CBS stripped an Indianapolis television station of its affiliation with the network, switching to another company's station at year-end, after a fee disagreement.

TV stations may not be happy about parting with what they believe is some hard-earned extra-retransmission cash -- around 50% to 60% in the coming years. But, in turn, TV networks would tell them this is what having “premium” video is all about.

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