Kagan, FCC stats put retrans in perspective


ChartDespite the persistent moaning and groaning coming from the MVPD sector, the fact remains that local broadcast television retransmission income, while growing, still makes up a small percentage of MVPD programming costs, and if they are driving up MVPD costs, it isn’t showing up in the FCC’s numbers.

It does look like broadcast television is grabbing a rapidly-increasing share of the retrans pie, but that is mainly because the total started out so low only a few short years ago.

SNL Kagan reported broadcasters raking in $210M in total retrans income in 2006, accounting for 1.3% of the total paid to broadcast and basic cable program providers.

By 2010, broadcast was getting $1.24B, amounting to 5% of the total, and this year it is projected to bring in $3.02B for a 9% share.

The share is projected to continue growing, but by 2016, Kagan projects it will still amount to only 12% based on $4.9B in retrans income.

RBR-TVBR notes that this essentially small percentage of MVPD program costs brings the highest rated programs and almost all of the local news and public affairs content that MPVDs have to offer.

Meanwhile, the FCC does not see the rate of cable costs expanding any more than usual, and in fact, it is growing at a much slower rate than it did during its high-water mark in the early 2000’s. In 2001, cable costs were up 7.3% on a 2.8% inflation rate; and they really took off in 2002, rising 8.2% against a 1.6% inflation rate.

During 2010, cable costs were up only 5.4% on top of a 1.6% inflation rate, and in 2011, the last year for which the FCC has stats, they were up only 4.8% on inflation of 3.2%.

RBR-TVBR observation: What we seem to have here is a hollow complaint based on an invisible body of evidence. It proves that the current open market retransmission consent negotiation process is not broken, and underscores that there is no need for intrusive intervention by either the FCC or Congress.