Retransmission fees - shouldn't it be the other way around?
August 12, 2013 12:08 PM Subscribe
The recent blackout of CBS by Time Warner prompted this question. I understand the basic premise behind retransmission fees - if CableCo wants to carry broadcasts from XYZ network, they need permission from XYZ, who will charge a fee for the privilege. But this seems backwards to me.
posted by trivia genius to work & money (12 answers total) 2 users marked this as a favorite
By agreeing to have their signal re-transmitted over cable, XYZ is guaranteeing themselves a larger population base, through a customer footprint that is larger in area than the OTA signal can reach, as well as within that geographic area for people without access to outdoor antennas or otherwise subject to poor reception. And since ad rates are based on viewership numbers, and broader reach equals more eyeballs on the screen, it would seem that the broadcasters already gain a benefit from being carried on cable. In fact, here in Southwestern CT, we get both CT and NYC broadcast stations on our local cable lineup. There's no way I'd get NYC stations with an OTA antenna, which means they are getting tens or hundreds of thousands more viewers than their broadcast signal footprint would suggest.
Especially in this day and age - where cable already offers a bazillion channels, plus the availability of online streaming options (Hulu, Netflix, Amazon, etc), you'd think the broadcasters would be willing to cut any deal necessary to simply guarantee that their content remains available to all. I know that personally, I might jump through some hoops to view a favorite show or two that is currently on a blackout channel, and others might do the same for sports or other live events - but I have to think the broadcasters are losing big money because of all the lost viewers. And if the blackout continues into fall premiere season, the CBS affiliates in Time Warner territory can kiss their ratings goodbye. Which also means lots of lost ad money. Right?
So basically - what are the economics of the situation that I'm missing here? Why aren't the broadcasters paying cable companies to carry them, instead of the way it currently works?