Cable and satellite services have been asking for an FCC investigation into the retransmission consent negotiation process, calling the system broken. But the NAB has a study which strongly suggests the system is working just as intended by Congress.
One complaint from MVPDs is that retransmission fees are fueling increases in the fees that they must charge their subscribers. The NAB report, however, shows that something else must be contributing since MVPD revenues and profits are climbing faster than are retrans fees. NAB also points out that retrans is but a small portion of an MVPD’s total cost for programming, “…and an even smaller percentage of MVPD revenues.”
NAB used an MVPD filing to refute the excessive cost claim, noting that in late 2009 cable and satellite interests claimed retransmission fees cost consumers between 34 cents and 75 cents monthly. NAB noted that the resulting share of an average expanded basic cable bill, between 0.75% and 1.5%, “hardly seems excessive.”
NAB also refuted the claim that contentious retransmission negotiations frequently result in interruptions of service. The simple fact is that stations are only rarely driven to pull their programming off of a system in the heat of contentious talks. As the NAB report noted, “the average household is far more likely to be without electricity, or to experience a cable system outage, than it is to be unable to watch its favorite broadcast channel via an MVPD as a result of a retransmission dispute.”
RBR-TVBR observation: If a broadcast channel is so important to a cable system or satellite service, it should carry a price tag equal to that of a similarly-watched basic cable service. And don’t even bring up advertising – both broadcast and basic channels carry ads. We’d bet that most broadcast stations would mop up the floor with the vast majority of cable channels, thus qualifying to be among the best-compensated channels on the MVPD’s lineup, and deservedly so.
