Commentary

Retrans Fees Often Blamed For TV Blackouts

Will broadcast TV stations anticipate blackouts of a different kind -- on new virtual live, linear packages of network platforms?

We know all about those disruptions from traditional pay TV providers -- cable, satellite, and telco -- and their issues as they relate to broadcast and cable networks.

Sinclair now says that because of “certain contractual provisions," all of its stations -- ABC, NBC, CBS, and Fox affiliate stations -- have been removed from Sony’s PlayStation Vue.

What’s the difference?

Right now, only scale and perceived consumer-marketing are the concerns. It’s hard to build outrage over new pay TV services when you have 500,000 to around 2 million subscribers. But traditional pay TV services -- ones with 20 million subscribers -- bring high-awareness headlines and headaches.

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Sinclair analyzes this well: “Because of the very small subscriber base that PlayStation Vue has, this event will have no material impact on Sinclair.”

You can be sure a TV station group has rarely, if ever, needed to qualify a blackout move of its stations to this small extent.

The difference, of course, is that virtual pay TV providers can go anywhere. DirecTV Now competes with Sling TV, which competes with Hulu. While this is also true with traditional satellite providers DirecTV and Dish, regionally sensitive cable operators are a different story.

Barton Crockett, media analyst at B.Riley FBR & Co., views the Sinclair-PlayStation Vue disagreement simply:

“We read this as a contract negotiation, that could mean either that Sony is pulling back from its pursuit of the now-crowded market for vMPVD services, or that there is an element of brinksmanship before ultimate renewal. We do not believe that Sony can be fully competitive without the largest station operator in the country and its roster of news, NFL, MLB, and prime-time content.”

Leverage is key -- especially with a still-young startup like PlayStation Vue. Crockett reckons Vue only has 700,000 subscribers.

Maybe there are bigger fish to fry. According to the American Television Alliance -- a group of mostly pay TV providers -- broadcast blackouts totaled in 2017; with 104 blackouts in 2016, 193 blackouts in 2015, 94 blackouts in 2014, and 119 blackouts in 2013.

Who is at fault? Pay TV providers blame TV stations; TV stations blame TV providers. Bottom line: According to local media advisory, BIA/Kelsey, retransmission revenues continue to climb -- they are now at $8.44 billion.

Someone’s money is doing the talking.


1 comment about "Retrans Fees Often Blamed For TV Blackouts".
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  1. Paula Lynn from Who Else Unlimited, May 20, 2018 at 6:05 p.m.

    Who pays ? We do.

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