OTA broadcast trend?

[Prescott Joe]

It appears that some networks and stations are making changes to their OTA signals
outside of the F.C.C. mandated "repack." For example, KTVA, CBS Anchorage, A.K.
now broadcasts from downtown Anchorage with only 29 kw at a height of only 199 feet.
Other stations in the Anchorage market, such as KYES operate with much more power
and an elevation of several thousand feet higher. In Erie, P.A., WSEE, the CBS
affiliate operates at only 96 kw while the other Erie UHF stations operate with much
more power and similar elevation. Buffalo, N.Y.'s CBS affiliate surrendered it's license
and is channel sharing with WNLO. While the erp power stayed about the same, the
elevation went from 813 to 481 AMSL. They no longer can be viewed more than a
few miles south of the city. My first thought is that these and many other stations are
"forcing" many viewers to either subscribe to cable, satellite or fee based CBS all access.
Those same stations are reducing the costs associated with OTA telecasting.

 

[Mr Tony]

Buffalo, N.Y.'s CBS affiliate surrendered it's license
and is channel sharing with WNLO. While the erp power stayed about the same, the
elevation went from 813 to 481 AMSL. They no longer can be viewed more than a
few miles south of the city.

Nexstar petitioned to the FCC to swap WNLO's and WUTV's RF station and move WNLO and WIVB back to the old WIVB tower
WUTV would go to 32 (instead of 36) and WNLO/WIVB will go from 32 to 36 and move to the old WIVB tower

https://ecfsapi.fcc.gov/file/103087844423/WNLO Petition for Rulemaking Channel 36 - 10.30.2018.pdf
https://ecfsapi.fcc.gov/file/10303024504532/WUTV Petition for Rulemaking.pdf

 

[joebtsflk1]

A couple of armchair observations: 1. OTA viewers don't contribute to retransmission fees. 2. Didn't look up the exact amount, but guessing the Buffalo station probably got well over $10 million to surrender their license in the repack.

Then there are the cases where new owners have taken over stations that were emaciated by previous owners only to be stuck at the lower power level. The former Barrington low-band VHF stations that migrated to UHF in the 2009 repack are good examples. One close to where I grew up, KTVO virtual ch. 3, RF 33 Kirksville MO, has been stuck at 87 kW ERP since 2009. Sinclair subsequently bought KTVO, and filed an app in 2013 to double the power, but the FCC has never granted it with their long time freeze on station upgrades. And digging through the FCC database for KTVO, Sinclair filed yet another upgrade to increase to 225 kW ERP in late during the FCC's temporary lifting of the app freeze (See Media Bureau Temporarily Lifts the Freeze On The Filing Of Minor Modification Applications That Expand The Contour Of Full Power And Class A Television Stations, Public Notice, DA 17-1086, Released November 6, 2017)

I don't know what the FCC has planned for stations that want to recapture some of their former analog coverage. It doesn't seem to be in much of a hurry to grant these upgrades.

 

[tripinva]

It appears that some networks and stations are making changes to their OTA signals
outside of the F.C.C. mandated "repack." For example, KTVA, CBS Anchorage, A.K.
now broadcasts from downtown Anchorage with only 29 kw at a height of only 199 feet.
Other stations in the Anchorage market, such as KYES operate with much more power
and an elevation of several thousand feet higher. In Erie, P.A., WSEE, the CBS
affiliate operates at only 96 kw while the other Erie UHF stations operate with much
more power and similar elevation. Buffalo, N.Y.'s CBS affiliate surrendered it's license
and is channel sharing with WNLO. While the erp power stayed about the same, the
elevation went from 813 to 481 AMSL. They no longer can be viewed more than a
few miles south of the city. My first thought is that these and many other stations are
"forcing" many viewers to either subscribe to cable, satellite or fee based CBS all access.
Those same stations are reducing the costs associated with OTA telecasting.

I don't understand.

KTVA has never operated with any digital facility aside from the one you're saying is new. It was licensed way back in 2006. The analog was on that same tower, and it was licensed in 1983.

WSEE was repacked and has already moved. Its new signal is far better than the old signal, going from 75 kW directional away from Erie to 96 kW omni. The other stations may broadcast with more power in the peak direction, but look carefully at the directional antennas they're using (to protect Canada) and you may find that viewers in Erie are getting a different picture than raw peak direction ERP numbers will tell you.

WIVB is channel sharing on WNLO, whose signal comes from the same place as Buffalo's PBS, FOX, CW, and My Network TV affiliates. And, as unclehonkey indicates, they are attempting to move back to the old WIVB tower via a channel swap with WUTV.

- Trip

 

[K6JHU]

Here in Albuquerque, the owner of teh Fox affiliate (KASA) sold the station to Univision. Fox was moved to a DT-2 of KRQE (CBS). That puts CBS in 1080i and Fox in 720P. Another way to save money.

 

[Mr Tony]

Here in Albuquerque, the owner of teh Fox affiliate (KASA) sold the station to Univision. Fox was moved to a DT-2 of KRQE (CBS). That puts CBS in 1080i and Fox in 720P. Another way to save money.

actually it had to do with the fact that Nexstar (who owned KRQE at the time) buying Media General (who owned KASA) and you can't own 2 of the top 4 stations in a market if they are full powered signals. So one had to be sold. Nexstar bought all the FOX programming to keep and sold KASA. This has been done in smaller markets for years due to consolidation.

 

[Mr Tony]

A couple of armchair observations: 1. OTA viewers don't contribute to retransmission fees. 2. Didn't look up the exact amount, but guessing the Buffalo station probably got well over $10 million to surrender their license in the repack.

a wee bit more than that
WIVB-TV. NEXSTAR BROADCASTING, INC. UHF. Go off-air. Yes. $ 46,015,135.

 

[KeithE4]

A couple of armchair observations: 1. OTA viewers don't contribute to retransmission fees.

I wonder how much of a percentage of a revenue stations comes from retrans fees, compared with ad dollars? Maybe I'm wrong, but it seems to me that few stations today could survive on ad dollars alone. Those who get TV via antenna are probably just freeloaders to them.

 

[Prescott Joe]

"KTVA has never operated with any digital facility aside from the one you're saying is new. It was licensed way back in 2006. The analog was on that same tower, and it was licensed in 1983."

"WSEE was repacked and has already moved. Its new signal is far better than the old signal, going from 75 kW directional away from Erie to 96 kW omni. The other stations may broadcast with more power in the peak direction, but look carefully at the directional antennas they're using (to protect Canada) and you may find that viewers in Erie are getting a different picture than raw peak direction ERP numbers will tell you."

"WIVB is channel sharing on WNLO, whose signal comes from the same place as Buffalo's PBS, FOX, CW, and My Network TV affiliates. And, as unclehonkey indicates, they are attempting to move back to the old WIVB tower via a channel swap with WUTV."

- Trip

KTVA's ota signal cannot compare to other Anchorage stations. KYES has translators, their main transmitter on
VHF is more powerful and sits high atop the mountains. KTVA probably has less than half of the signal coverage.

WSEE does not have a good signal into places like Jamestown, N.Y., Oil City, P.A. the other Erie stations do.
WSEE remains the weakest signal of the Erie UHF stations outside of downtown Erie.

WIVB is hoping to move back to it's old transmitter location in Colden, N.Y. This is largely due to the HUGE outcry of Western New York ota viewers. All the transmitters south of Buffalo, N.Y., WKBW, WGRZ and WBBZ all cover thousands of additional square miles that Grand Island transmitters do not.

I agree that ota viewers do not pay for their television. Retransmission fees do help the bottom line.

 

[Prescott Joe]

KeithE4
" I wonder how much of a percentage of a revenue stations comes from retrans fees, compared with ad dollars? Maybe I'm wrong, but it seems to me that few stations today could survive on ad dollars alone. Those who get TV via antenna are probably just freeloaders to them."



EXACTLY

 

[landtuna]

I wonder how much of a percentage of a revenue stations comes from retrans fees, compared with ad dollars? Maybe I'm wrong, but it seems to me that few stations today could survive on ad dollars alone. Those who get TV via antenna are probably just freeloaders to them.

We're not freeloaders. We're customers, just like for the past 80 or so years. It was the broadcasting industry (including radio and TV stations) who developed the ad-supported service scheme and have embraced it for years. Just because the world has moved into a wire-connected mode doesn't change our relationship to the individual TV station. The TV stations could have jumped into the cable distribution business when it was in its infancy but chose not to do so. They were held hostage by the cable industry and caved. Now that they significantly increased the number and duration of commercials and that is not lining their studios with cash is no reason to toss the time honored OTA customer in the trash. They need to do what they have the option to do: increase the value of their content. They won't do it by increasing the commercial load or offering trash content. First it was radio making the big money. Then came movies and the theaters were flush with cash. Then came TV and those owners had a license to print money. Now there is the Internet and TV is no longer the gateway to video entertainment. Got to get smarter guys or go the way of radio.

 

[blizzard59]

I wonder how much of a percentage of a revenue stations comes from retrans fees, compared with ad dollars? Maybe I'm wrong, but it seems to me that few stations today could survive on ad dollars alone. Those who get TV via antenna are probably just freeloaders to them.

For publicly-traded companies, you can figure this out by looking through SEC filings. More specifically, though, Nexstar just announced last week that, in 2018, revenue from retransmission fees and digital services surpassed revenue from TV advertising for the first time in company history. Retransmssion fees alone amounted to 40.5% of the company's revenue in 2018.

https://tvnewscheck.com/article/230919/tv-ads-no-longer-prime-rev-source-nexstar/

 

[TheBigA]

The TV stations could have jumped into the cable distribution business when it was in its infancy but chose not to do so.

Or perhaps there were lots of regulations that prevented them from getting into that business at that time. At one time, companies could only own one network. At one time, companies could only own 5 TV stations. Rules have changed. I think you're assuming that companies had a choice about what they could or could not own.

Now there is the Internet and TV is no longer the gateway to video entertainment. Got to get smarter guys or go the way of radio.

Keep in mind that Fox has just sold off a lot of its traditional business in an effort to reinvent itself as an internet based company. Disney, CBS, Viacom, AT&T, and Universal are all involved in various video streaming businesses. They're doing as much as they're being allowed to do under the rules. As for radio, the bigger companies have reinvented themselves as content companies. But they get a lot of criticism for doing it from people who want to require them to stay as radio-only companies.

 

[davideduardo]

We're not freeloaders. We're customers, just like for the past 80 or so years.

No, you are the product. Stations build a machine to create an audience, and that is what they sell to advertisers... listeners.

Broadcasting is what is called a bi-modal marketing model, where the users are not the ones paying the bills. Advertisers are the customer.

Another case of bi-modal marketing is life insurance. The purchaser gets no benefit from the product, but those who get payments are. One is the consumer, others are the user.

It was the broadcasting industry (including radio and TV stations) who developed the ad-supported service scheme and have embraced it for years.

But technology changed the business model.

Cable originally began as "CATV" or Community Antenna Television. It was intended to make signal available in fringe and gray areas where an antenna would not get anything. It started in little valleys in Pennsylvania and rural towns in Montana and the like.

But it was discovered in the late by the late 70's that you did not have to be a TV station to program to cable subscribers. Satellite made it possible to relay CNN, MTV, HBO into millions of homes via thousands of CATV companies. The cable only channels realized that cable was being installed mostly to get their channels, so they started demanding fees for carriage rights. Local TV stations, highly fragmented by cable and more FCC allocations, jumped on this as it was part of the plan to save broadcast TV which was now getting less and less share of viewing due to all the other choices.

I pay close to $10 a month just for ESPN. Yet I have ESPN (and all the other sports channels) blocked on my VCR. I never use them; I mention this because it demonstrates how we have all moved into acceptance mode on being charged for entertainment.

Just because the world has moved into a wire-connected mode doesn't change our relationship to the individual TV station. The TV stations could have jumped into the cable distribution business when it was in its infancy but chose not to do so.

There were regulations that made it difficult initially for broadcast stations to own cable companies. This was back in the time that the FCC had to step in with "must carry" rules to prevent abuse.

By the time it was possible, cable was approaching maturity as an industry.

One of the premier broadcasters who did enter CATV was Cox... but they bought or built stations in market areas not served by a Cox TV station... and that was way back in the 60's. Even today, there is no apparent overlap in Cox TV stations and Cox cable systems.

So, at least initially, radio and TV over the air broadcasters did not operate cable in their own markets. The idea that they missed the boat is incorrect.

And remember that, until 1996, radio and local TV had no economies of scale. 7-7-7 was the ownership cap, and cable was and is a capital intensive business. It costs, including construction, installation and the like, several hundred dollars per pass to cable an area (a "pass" is a dwelling unit that might subscribe). In areas where underground cabling is required, the cost doubles or triples. Back in the 60s and 70's when cable began, the business model was one of providing better service in poor signal areas, and most systems were 12 channel only. Subscribers paid a fee because it was cheaper than a mast, a rotor and an expensive antenna.

By the time cable became a delivery system for non-local programming... a quarter century after CATV began... the prime real estate was already taken.

They were held hostage by the cable industry and caved. Now that they significantly increased the number and duration of commercials and that is not lining their studios with cash is no reason to toss the time honored OTA customer in the trash. They need to do what they have the option to do: increase the value of their content. They won't do it by increasing the commercial load or offering trash content. First it was radio making the big money. Then came movies and the theaters were flush with cash. Then came TV and those owners had a license to print money. Now there is the Internet and TV is no longer the gateway to video entertainment. Got to get smarter guys or go the way of radio.

Radio is still highly profitable, but not a growth industry. Sure, AM is in a decline to obsolescence due to mostly bad signals and high noise levels. And FM commands fewer hours per week of listening. But still, radio reaches more than 90% of Americans every week and beats everyone on reach and efficiency.

Oh, and your timeline is backwards. Movies were popular and profitable with films like "Birth of a Nation" packing houses in 1915. Radio did not figure out a profit model till the late 20's, and prior to that was thought of as a requirement for the sale of radio sets (Crosley, Zenity and retailers, for example) or for image enhancement (Life insurance companies and the like). Television was already being tested when radio figured out the first of several business models that would carry it for the next 90 years!

And when radio figured out how to deal with the AFM and Television, it became more profitable than ever before.

 

[landtuna]

Or perhaps there were lots of regulations that prevented them from getting into that business at that time. At one time, companies could only own one network. At one time, companies could only own 5 TV stations. Rules have changed. I think you're assuming that companies had a choice about what they could or could not own.

You could be correct but I do not recall that being the case at that time. Initially, cable companies were very small independent outfits that served "big city" TV to small areas where geography or distance prevented antenna reception. Then came services such as HBO which wasn't available OTA so people signed up to get additional content. You know the rest. I surmise if the TV stations and/or networks passed on providing cable services it was because (1) it would have competed with their broadcast product, (2) their own management didn't think the investment was worth the return (I vote this #1), (3) they were not interested in bidding for licenses in their political subdivisions when they already "owned" the skies.

 

[landtuna]

No, you are the product. Stations build a machine to create an audience, and that is what they sell to advertisers... listeners.

Broadcasting is what is called a bi-modal marketing model, where the users are not the ones paying the bills. Advertisers are the customer.

Semantics. Advertisers might be buying commercials but without viewers buying the advertiser's product(s) the system would collapse. Instead of paying money to listen or watch a baseball game we (customers) pay with our eyes. Each pair of eyeballs mean a certain amount of revenue to the station as billed through the advertiser. Couch it in any language you want but each station has at least two sets of customers: the viewers and the advertisers. Without one it would not have the other.

But technology changed the business model.

Yes it did. It brought the subscription (or pay per view if you like) into the business model. The same one that newspapers had been using for many years.

I pay close to $10 a month just for ESPN. Yet I have ESPN (and all the other sports channels) blocked on my VCR. I never use them; I mention this because it demonstrates how we have all moved into acceptance mode on being charged for entertainment.

Not all of us by a long shot. I dropped my cable subscription back in the 90's because the value I received was not worth the escalating cost. Recently my Internet provider (Cox Cable) through in free basic cable to entice me to renew my Internet service. The first year I had it, it was never used. Then, as my OTA signals began to become less and less dependable (hello KPNX) I began using it for the local big signal stations. They still don't carry the subs so their value is exactly what I pay for it, zippo. Under other circumstances it would not be in my house.

Back when HBO and ESPN were part of my local basic cable (we're talking early 80's) I used to watch. Over time their programming became less and less interesting to me. Once they began charging premium subscription prices I dropped them and have not again paid for anything I do not watch since. Today there are many ways to obtain my desired programming which do not involve paying the exorbitant fees charged by Cox.

There were regulations that made it difficult initially for broadcast stations to own cable companies. This was back in the time that the FCC had to step in with "must carry" rules to prevent abuse.

I readily admit I am no expert on the many laws and rules that govern broadcast and cable companies but as I said before I am very surprised I never heard of any such obstruction.

Back in the 60s and 70's when cable began, the business model was one of providing better service in poor signal areas, and most systems were 12 channel only. Subscribers paid a fee because it was cheaper than a mast, a rotor and an expensive antenna.

Or, as exampled by my parents who lived in French Gulch, CA with tall mountains on both sides of their very small town - it was the only way to import a TV signal into that area. It was not possible to get a watchable signal any other way.

Oh, and your timeline is backwards. Movies were popular and profitable with films like "Birth of a Nation" packing houses in 1915.

Movies were not the gigantic revenue generator in the teens and 20's until the advent of sound and the arrival of the Great Depression. Movies were cheap entertainment and theaters offered air conditioning, games, prizes and contests just for showing up. The 30's through the 60's was known as the Golden Age of Movies when virtually everyone in America went to a movie at least once per week. Radio's popularity began about that same time and built the model where advertisers bought entire shows much the same as race cars obtain sponsors. Those timelines are what I was referencing and I don't agree it was "backwards".

 

[davideduardo]

You could be correct but I do not recall that being the case at that time. Initially, cable companies were very small independent outfits that served "big city" TV to small areas where geography or distance prevented antenna reception.

The original Community Antenna TV operators included many towns or ad hoc citizen groups in towns with terrain issues that prevented the reception of TV stations in their own area. They were really primitive by today's standards, and often were a bunch of antennas on a hilltop, some RF amplifiers and miles of wire and splitters.

While "who's on first" results in some confusing claims, by most accounts the first CATV system began in 1948 and likely was in a valley in Pennsylvania. There was no exclusive programming, and the signals, amplified and sent over old 300 ohm twin lead, were not great, it was a solution in such markets.

Then came services such as HBO which wasn't available OTA so people signed up to get additional content. You know the rest.

HBO began as an offshoot for a New York City version of CATV. Due to bad reception in high-rises, an underground cabled system was constructed by Sterling Manhattan cable at a cost of as much as $300,000 a mile and a fee was charged for "clear reception". Yet after six years of huge losses and only 400 subscribers, the owner decided he needed something extra to get more subscriptions.

The idea was an exclusive content channel, but Sterling did not have the tens of millions needed to create and launch. But it did have a nice area of NYC wired, and permits for more. So the idea was pitched to AT&T, which had the experience, money and skills needed to wire a city. They test marketed in Pennsylvania, and adoption was very slow. Sterling ran out of money and sold out fully to AT&T.

Still, the launch in a test market in 1972, 25 years after the first CATV system started, was expensive and it took over three years and millions in installation costs to reach 100,000 subscribers. By then, the pay channel was called HBO. Technology allowed for expansion by using satellites, but earth stations were around $100 k each, and AT&T had to put them in for CATV companies to add the channel. By the end of the 70's, HBO operated just 9 hours a day. It would not be until the concept was 10 years old, having burnt through several hundred million dollars in build-outs, that they went to 24 hour operation.

Part of the success in the 80's of HBO came because of CNN, Showtime, Movie Channel and the like which made people willing to pay for cable in areas where a rooftop antenna had been enough for about 35 years.

I surmise if the TV stations and/or networks passed on providing cable services it was because (1) it would have competed with their broadcast product, (2) their own management didn't think the investment was worth the return (I vote this #1), (3) they were not interested in bidding for licenses in their political subdivisions when they already "owned" the skies.

No radio company in the country (the biggest had at most 7 AM and 7 FM) had anywhere near the capital to build out a national infrastructure, including paying for fractional parts of entire satellite systems.

TV operators did not have that much more, and their borrowing power was limited to, perhaps, a portion of the asset value of those stations. No way could they borrow hundreds of millions for a start-up business where, as I said, urban installations could cost several hundred thousand a mile.

AT&T had the capital and it had the business model needed to lay wire in every block of the urban areas they wanted to serve. They were experienced in getting permits, dealing with zoning, and negotiating with individual towns and cities that all wanted fees and a taste of the profits.

TV stations would have liked to have more ways into homes, but the one-per-market rule pretty much prevented them from doing their own cable stations at the local level. But creating good programming would require a national footprint to deal with the purchase of film rights or the production of original programming... way beyond the ability of a single station to do.

A few stations tried to convert local stations into Superstations, such as WTBS in Atlanta and WGN in Chicago; that allowed them to be on cable locally without having duopoly issues while at the same time creating a product designed for national consumption. Ted Turner, who inherited a very lucrative outdoor advertising company, was able to ride on the coattails of HBO and MTV and create content. WGN had the wealth of the Trib. But neither got far into the local cable company business because of the huge costs. And local startup cable companies were gradually bought out and consolidation occured.

But there are two parts to the business: distribution and content. It's only recently, and after considerable issues with the DoJ, that vertical integration was even permitted. And we are talking about amounts of money greater than the amalgamated value of every radio station in the country combined.

There is no logical connection between radio and TV station ownership and the building of cable distribution systems. Cable companies are utilities, like phones, electricity, gas and water. Huge infrastructure costs, and highly regulated operations. They don't produce content, which is the specialty of radio and TV stations.

And the national cable "networks" provide content. They are an extension of Hollywood and not of local TV. Negotiating syndicated shows for reruns, licensing sports rights, buying movies for home viewing, are all in a different business. That's why companies like Disney were early entrants... they had tons of money and lots of content. Local TV stations or groups of stations do not own content, they rent it. Or get it from a network.

Even MTV, based on music content, was financed by Warner which had the deep pockets to do the needed deals.

None of your reasons for radio and tv operators not jumping into cable are correct. Simply, the entrance costs were way beyond what a radio or TV station operator could afford or finance.

 

[TheBigA]

Even MTV, based on music content, was financed by Warner which had the deep pockets to do the needed deals.

It was actually a partnership between Warner and American Express. Even deeper pockets.

 

[landtuna]

None of your reasons for radio and tv operators not jumping into cable are correct. Simply, the entrance costs were way beyond what a radio or TV station operator could afford or finance.

Your post is very informative but addresses the wrong issue. The entrance costs and "foot in the door" issues I was addressing were in the very early days of cable (or CATV) systems. In 1979 I lived on the outskirts of a major metro area but our local cable company was a two-horse outfit that appeared to be run out of someone's spare bedroom. They farmed out virtually all their construction and maintenance and likely their content as well. They serviced an area of several square miles initially and made money at that level. They carried the local TV stations, HBO and a smattering of other cable offerings (USA Network, WTBS, WGN etc.). There were no encrypted signals (addressable boxes) and the cable remote was physically wired to the cable box.

Today, that area is serviced by Cox Communications and its program offerings and products dwarf the original - but that is irrelevant to my post. The local major TV stations in my metro area were, at that time, owned by wealthy individuals or deep pocket companies who could have easily afforded a cable business at that level of technology.

Sidebar: Western Cable was the name of my initial cable provider. When their contractors were trenching to lay the coax on our street they inadvertently cut my neighbors water line (it had been laid incorrectly). When I saw the water gushing out from his house I called the service department of the cable company and half an hour later a guy shows up. While he is repairing the water line we got to talking and I recognized his voice - he was also the guy who answered the trouble call. I asked him how many jobs he had and he said four: service manager, service tech, dispatcher and construction manager). Can't get much more bare bones than that.

My brother in law worked as an installer/repair guy for a cable company serving semi-rural northern CA (Sonoma County). His stories repeated much the same message: the original cable companies were mostly shoestring operations.

 

[AbrahamJSimpson]

I think referring to advertisers as the customers is more than semantics. Yes, without viewers (or listeners), the model falls apart, but it remains distinct from many other businesses in which the owner can (without going too far down a rabbit hole) generally speaking acquire the product directly purchased by the end users. It’s different to say I’m going to purchase a case of soup to stock my shelves than to try to entice the soup to willingly walk in the door and be purchased, albeit without calling added attention to them being what’s sold.

Good, bad or indifferent, it’s a different set of dynamics, and rather fascinating.