[opendtv] Re: News: FCC Denies Retransmission Complaint Against Sinclair
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Sat, 6 Jan 2007 09:35:44 -0500
At 8:14 AM -0800 1/5/07, John Willkie wrote:
And, you still (somehow) maintain that the balance of power hasn't shifted.
It isn't just that cable has the worse negotiators; it's that they need
broadcasters more than broadcasters need them.
Give it up John. They are one and the same. We can argue about the
relationships of the networks and their broadcast affiliates, and the
relationship of the companies that own the broadcast networks and the
cable networks, but in the end its all the same thing. Five companies
own 90% of the audience - i.e. the networks that are watched 90% of
the time.
The cable and DBS companies have good reason to try and negotiate the
lowest subscriber fees possible for each channel they carry. The
media conglomerates and their affiliates have good reason to push
these subscriber fees as high as they can. In the end, however, this
is mostly a PR shell game. The companies to which you send your
monthly check for TV service need to look like they are protecting
their customers, so they make a lot of noise during re-trans consent
negotiations, with the intention of trying to convince subscribers
that they are bargaining for the consumer. The conglomerates and
local broadcasters on the other side try to make it look like the
multichannel systems are screwing the subscribers and that they are
not getting a fair cut of the monthly booty.
What they BOTH want is for subscribers to bitch and complain when a
popular channel is withdrawn during a re-trans consent battle. In
essence they want the customer to approve the rate hike by calling
their cable/DBS system and telling them they want to content at any
cost.
The only problem for BOTH is that they can only push this scam to the
point that the consumer can live with the pain. That means no more
than about 10% rate hikes each year. The problem now is that all of
the broadcast stations are drooling over the prospect of getting
paid, not only for their analog signals, but their digital signals as
well - especially the HD content, which is now considered to be "the
new premium content," versus movie channels.
As broadcasters re-negotiate carriage, the cable/DBS systems and the
consumers are facing major price increases. It is important to note
here that the media conglomerates used re-trans consent in the '90s
to rebuild their empire. Instead off cash they took in-kind
compensation, like the preferred placement of ESPN, and the Disney
Channel in the extended basic tier, and access to the systems for
MSNBC, NBC, The Soap Opera Channel, FX, et al. Now they just want
cash.
The pressure now to get $0.50 to $1.00 per month per broadcast
channel is more than the systems and the consumers can handle, unless
rates go up 15-20% per year, so the system is starting to squeak.
Their appeal to the full commission has zero chance of success, since no
novel issues or legal theories are present or hinted at.
Just a PR move, nothing more. The FCC is a willing partner in all of
this, as is Congress. Its the political law of unintended
consequences again.
Will MediaCom get a clue in time? Churn-rate alert, even without
considering the $100/$150 per subscriber payment to viewers that Sinclair is
offering to make up for the inconvenience of subscribing to the non-whiners
at DirecTV.
DirecTV is not whining because they are already charging customers
$5.99 per month for local channels, while cable customers have always
expect the local channels as part of their limited or extended basic
tiers. DirecTV is paying FAR MORE than $0.15 per sub for a broadcast
channel, but that $5.99 is not going to cover their retrans costs
much longer as local stations up their demands and push for that
$1.00 per month goal. I suspect that one reason DirecTV is moving
toward carriage of all locals in HD is so they can push that fee for
locals up to $7.99 then $8.99, then $9.99...
Obviously Sinclair sees value in helping the DBS companies grab
customers from cable, especially when they get paid for each new
subscriber. The question is how much longer consumers are going to
put up with this. The crossover point is rapidly approaching - the
point where it is cheaper to buy the content you want directly, than
to subscribe to a multichannel service.
Regards
Craig
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