MVPDs Are a Study in Consolidation


Cable / SatelliteThere are a relatively small number of companies that provide the vast bulk of MVPD service to American homes. According to a study from Leichtman Research Group, only 13 companies control 95% of the total number of subscribers.

Look a little bit closer, as RBR+TVBR did, and the chart shows that just four companies control two thirds of the market.

Two of the big four are trying to merge, and one of the two remaining is also seeking a merger with another of the big players.

The Comcast/TWC merger would combine the top two cable companies, and would combine the #1 and #4 companies in the MVPD space.

The DirecTV/AT&T merger would bring the satellite company together with one of the two big telco providers, putting it just behind Comcast/TWC in terms of subscribers.

The Leichtman study showed that cord-cutting is taking a toll in the space, but its affect is limited. The sum and total of lost subscriptions amounted to only 0.2% in 2014.

Lack of growth is certainly a concern, but loss of the overall subscriber base is less of one, at least for the time being.

Motley Fool looked at the pending mergers. It noted that if the two are approved, the next company likely to be teed up would be Dish Network. It believes it would be an attractive partner for one of the remaining cable companies, such as Charter or Cox, or perhaps Cablevision.

RBR+TVBR observation: Again, we wonder how any sentient being in Congress or at the FCC can look at a local retransmission consent negotiation between one of the huge companies almost invariably representing the MVPD side and think that what is two broadcast stations negotiating together somehow have the upper hand.

Unlike MVPDs, broadcast ownership is limited. There are a few big television groups, but they can only extend so far. There are myriad other television licensees operating in markets large and small.

Unlike MVPDs, the amount of program streams a broadcaster has in a local market is also limited – it is only in the last few years that broadcasters have had more than one program stream at their command, versus hundreds available to MVPDs.

The fact that broadcasters have been able to continue to excel in the provision of local content, including the incredibly important news, information, public affairs and emergency content is a testimony to the power of local broadcasting. MVPDs, despite their size, certainly haven’t been able to match this service.

Let’s add this into the mix: Unlike MVPDs, broadcasters have and honor public service obligations. Compare this with the long MVPD tradition of living at the very bottom of the corporate list when it comes to providing public service – year in and year out its ratings are among the very worst.

It is also a testament to the value of national broadcast networks that they are able to create much sought after news, sports and entertainment programming despite the massive number of cable channels they compete with.

All of this has made local broadcast of very high value to MVPDs.

And sure, we understand why they’d like to get it at a low cost.

That doesn’t mean they should get it at a reduced rate – they should pay fair value, and the best way to arrive at that figure is via an open negotiation.

And if two local broadcasters operate together via a legal business agreement, we see no reason why they should not be able extend this relationship to MVPD dealings. Really – it’s still two stations with perhaps between two and six program streams against the multiple offerings of the MVPD.

The MVPD has the option to drop the stations. Its subscribers might not like it, though. They may drop the MVPD and switch to one that does carry the local station, as difficult as MVPDs make that to do.

The MVPD should not have the option of crying to Congress or the FCC and have any reasonable expectation of sympathy.

How some legislators and FCC officials are able to believe that MVPDs are somehow being bullied is simply beyond imagination.


  1. “How some legislators and FCC officials are able to believe that MVPDs are somehow being bullied is simply beyond imagination.”

    No it’s not. The MVPDs have lobbyists and a LOT of money at their disposal. Since we know that legislators rule by dollars and not the will of the people, and as so they have been “paid” to believe that broadcasters are the bullies.

  2. Your article addresses the 13 companies controlling 95% of the markets. There are literally 100’s of small MVPD’s that get beat to a pulp by the local broadcasters in negotiations. Some rebroadcast fees increased 2000% in the last retrans negotiations with small MVPD’s. The small cable co owns 0% of the programming and is forced to raise rates when the local broadcaster contract expires and retrans rates increase in the new contract. The viewer meanwhile has no idea who is paying whom and blames the local cable co. Small MPVD video margins have collapsed as we give away margin to control churn. Your big guy example is completely out of sync with the reality faced by 100’s of small MPVD’s.

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