It Doesn't Make Sense To Me...

[landtuna]

That Fox (or any other OTA broadcaster) can demand fees from cable systems carrying their programming since:

1. The cable systems "must carry".
2. The broadcaster potentially reaches a larger audience as a result of the retransmit and doesn't incur any significant costs associated with this increased audience.

I can understand where a DBS satellite retransmit of local OTA stations might deserve a fee since both DISH and DirecTV at one time levied fees for local channels. AFAIK this is not true with cable systems.

 

[azumanga]

There's also #3: the signals are already free to those with TV antennas -- why should cable systems be obligated to pay (and, no doubt, pass the expenses to their subscribers)?

 

[Yeziknoradio]

The problem is VERY UGLY in Canada too.

http://localtvmatters.ca/ (the viewpoint of the networks)

(Rogers) Cable viewpoint:

"The cable guys charge that CTV is simply trying to pressure the government--through the regulator--"to impose a TV tax on Canadian consumers"--in other words, to buckle under their relentless campaign for a chunk of the carriage fee booty."

http://tvfeedsmyfamily.blogspot.com/2009/05/rogers-cries-foul-over-save-local-tv.html

So if you thought have it bad in the States...

 

[Robnoxious]

I'm with you landtuna in the curious practice of having cable companies to pay broadcasters retransmission fees for OTA channels that are available for free. They are mandated to carry these channels by FCC law. The sticky wicket is the entire umbrella of channels each corporation may have in it's arsenal that are not in of themselves free-to-air. The Fox vs TWC squabble had much less to do with the Fox Network in of itself but rather the other channels under News Corp. (FX, Speed and the Fox Sports Network) that are purely cable accessible.

This is what makes the NBC/Comcast merger interesting. If NBC were to go strictly cable (not saying it will but using it as a hypothetical) there would be no more "must carry" status and any cable system can choose not to participate in airing the product.

 

[tripinva]

Cable companies are only required to carry a station if they elect must-carry. A station which elects retransmission consent negotiates terms with the cable company, as Fox has recently done.

There is no requirement to carry any retransmission consent station.

- Trip

 

[pqgeorge]

The problem is VERY UGLY in Canada too.

http://localtvmatters.ca/ (the viewpoint of the networks)

(Rogers) Cable viewpoint:

"The cable guys charge that CTV is simply trying to pressure the government--through the regulator--"to impose a TV tax on Canadian consumers"--in other words, to buckle under their relentless campaign for a chunk of the carriage fee booty."

http://tvfeedsmyfamily.blogspot.com/2009/05/rogers-cries-foul-over-save-local-tv.html

So if you thought have it bad in the States...

I'll even "better" that.......

It's somewhat similar in the UK too. EXCEPT, all TV, laptop and personal wireless video media player owners are required to pay a "License Fee" . From the UK TV Licensing website....... http://www.tvlicensing.co.uk (very fascinating)

"You need to be covered by a valid TV Licence if you watch or record TV as it's being broadcast. This includes the use of devices such as a computer, laptop, mobile phone or DVD/video recorder. It costs £142.50 for colour and £48.00 for a black and white TV Licence."


"Watching TV on the internet
You need to be covered by a licence if you watch TV online at the same time as it's being broadcast on conventional TV in the UK or the Channel Islands.
Video recorders and digital recorders like Sky+
You need a licence if you record TV as it's broadcast, whether that's on a conventional video recorder or digital box.
Mobile phones
A licence covers you to watch TV as it's broadcast on a mobile phone, whether you're at home or out and about. "

Apparently, it is rigidly enforced whether you're watching the BBC, ITV or any one of the various commercial broadcasters, you must pay. If you don't pay, you don't play. This is a leftover from the days of when the BBC (the UK "public broadcaster", government owned) pretty much had the spectrum (both radio and the "tele") all to itself. The UK "TV police" have some unique ways of "snooping" for the "pirates". So folks, it "could be WORSE" ! -Pete

 

[robbbc]

Cable companies are only required to carry a station if they elect must-carry. A station which elects retransmission consent negotiates terms with the cable company, as Fox has recently done.

There is no requirement to carry any retransmission consent station.

- Trip

Good points. But is Fox that "necessary"? From what I can tell its programming has gotten very niche except for Idol, but even that may be past its prime. The day schedule at your typical fox station is not very good IMHO. Bad timing for Fox to try to play a trump card. If they can't make money putting Idol/House/Simpsons on Network, why don't they put it on FX (which they already get subscriber fees for). They could easily put football on one of their sports entities. Their local news is the pits in most areas and only has a following due to no one else being on at 10 pm. Time-Warner should call the bluff. If you want Fox hook up the antenna. It might be time for the cable companies to push back- this is a bad precedent to start.

 

[landtuna]

Cable companies are only required to carry a station if they elect must-carry. A station which elects retransmission consent negotiates terms with the cable company, as Fox has recently done.

There is no requirement to carry any retransmission consent station.

- Trip

Are you saying the must-carry is on a station-by-station basis?

If that is true then it would seem that Time-Warner would have the option to drop the Fox O&O's in selected markets and not have to pay anything. They might lose some disgruntled customers but that might be less than the cost of carrying Fox.

 

[fybush]

The choice of must-carry vs. retransmission consent is made by the station, not by the cable system. In general, the larger the station, the more likely it is to elect to seek retransmission consent compensation.

The problem with the "if you want Fox, hook up the antenna" hardball strategy is that it opens the door for the dish providers (or the alternate terrestrial providers like FiOS and UVerse) to steal significant market share. One underestimates the popularity of Fox Sunday football, MLB coverage, and of course Idol at one's own peril.

Nor is moving that big-ticket programming to FX or the other cable networks a realistic option. Even if the contracts with the NFL, MLB, etc. allowed it (which they don't), it sacrifices a decent percentage of potential audience (anywhere from 10-40%, depending on OTA penetration in a given market)...and anyway, TWC's contracts to carry the Fox cable networks were also up for renewal, and those contracts are closely linked to the retransmission consent for the Fox broadcast O&Os.

 

[w9wi]

There's also #3: the signals are already free to those with TV antennas -- why should cable systems be obligated to pay (and, no doubt, pass the expenses to their subscribers)?

The legal argument is that the OTA broadcasts are made for the information and enjoyment of the viewing public. You have the right to watch the Super Bowl for your own entertainment.

I sure wouldn't be trying to sell recordings of the Super Bowl on eBay! But in essence that's what cable is doing -- picking up the signals of the OTA stations and selling them at a profit, without handing any of that profit over to the OTA stations that make it possible.

(OK, that's what cable was doing before retrans-consent came along.)

OTA channels are responsible for the largest part of viewership by cable subscribers. Without those OTA signals, cable would have far fewer subscribers -- would be considerably less profitable. It doesn't strike me as far-fetched at all for the broadcasters to expect some consideration from cable.

Further, most non-OTA channels get a cash cut per subscriber from the systems that carry them. Why shouldn't the far more popular (and thus far more profitable for the cable system) OTA channels get something?


It may be a bit misleading to consider this particular event an OTA-vs-cable battle though. This is more a cable programmer-vs-cable system battle, a lot like the concurrent one between Scripps-Howard and (is it Cablevision?) regarding HGTV and at least one other channel. Really the major difference is that in this case Fox is using its OTA stations as leverage to try to get a better deal for their non-OTA channels.

 

[landtuna]

OTA channels are responsible for the largest part of viewership by cable subscribers. Without those OTA signals, cable would have far fewer subscribers -- would be considerably less profitable. It doesn't strike me as far-fetched at all for the broadcasters to expect some consideration from cable.

I follow your logic but it still seems to me, if your statement that the largest part of cable viewership is OTA stations, both OTA and cable are benefiting from this arrangement and the establishment of fees introduces peril (certainly in the eyes and minds of end cable customers.

In the early days of cable most signals carried were distant OTA stations not normally receivable (in watchable condition anyway) by the cable customer. Cable-only channels were added over time but the majority of viewing, as you say, remains OTA. Therefore, the OTA station is reaching customers it normally wouldn't have due to lack of signal (and this is certainly enlarged in many markets since the DTV migration).

The cable system benefits by carrying OTA's (customer convenience) and the OTA's benefit by reaching a larger audience.

Unless I am not understanding correctly it seems the cable operators are being screwed. If the OTA elects a "must carry" then the cable system has to provide their signal....and, if it is a Fox O&O it also must pay the OTA for the "privilege"?

 

[imhomerjay]

There isn't a way they elect must carry AND get paid. It's either/or, not both.

 

[w9wi]

I follow your logic but it still seems to me, if your statement that the largest part of cable viewership is OTA stations, both OTA and cable are benefiting from this arrangement and the establishment of fees introduces peril (certainly in the eyes and minds of end cable customers.

If cable had existed before OTA, I'd concur. Without carriage on cable, OTA stations would have a significant decline in audience. (though a goodly number of viewers would switch to satellite or OTA)

But of course, OTA came first. I would suggest overall, the current arrangement has been significantly negative for OTA operations. If OTA had been able to prevent cable from getting launched in places where the major networks were available OTA, OTA would not face competition from dozens of non-OTA channels and a bunch of premium channels. They'd be considerably better off.

Not that I'm advocating that. (though it *was* considered in the early 1970s)

In the early days of cable most signals carried were distant OTA stations not normally receivable (in watchable condition anyway) by the cable customer. Cable-only channels were added over time but the majority of viewing, as you say, remains OTA. Therefore, the OTA station is reaching customers it normally wouldn't have due to lack of signal (and this is certainly enlarged in many markets since the DTV migration).

Before the early 1970s, I'd concur. It was about that time cable began expanding into cities, where a rooftop antenna (if not rabbit ears) would deliver a decent signal from ABC/CBS/NBC affiliates. Certainly by 1990 (quite a bit sooner) the vast majority of cable subscribers could receive a full set of affiliates OTA if they chose.

(IMHO zoning ordinances and deed restrictions limiting outdoor OTA antennas would have been politically impossible if cable wasn't delivering the most popular channels.)

(I would also suggest most of the DTV reception issues would not exist if there had been no cable in the last years of analog, and proper antennas had been universally deployed.)

So I'm arguing that the number of additional viewers available to OTA stations as a result of cable is minimal. And I'd argue that it's smaller than the number of viewers who have the technical ability to watch OTA channels but choose to watch non-OTA channels. In other words, I'm arguing that cable has resulted in a net loss of viewership for OTA stations.

Unless I am not understanding correctly it seems the cable operators are being screwed. If the OTA elects a "must carry" then the cable system has to provide their signal....and, if it is a Fox O&O it also must pay the OTA for the "privilege"?

No, it's an either-or thing. If the OTA station elects must-carry, then it is not entitled to compensation from the cable operator. If it elects retransmission consent, then the FCC does not require the cable operator to carry the station. If a retransmission agreement cannot be reached, the cable operator may drop the station. (must drop the station, as permission to use the station's signal under copyright ceases to exist)

 

[TexasTom]

Unless I am not understanding correctly it seems the cable operators are being screwed. If the OTA elects a "must carry" then the cable system has to provide their signal....and, if it is a Fox O&O it also must pay the OTA for the "privilege"?

Not at all, at least not when it comes to retransmission consent stations. If they don't think they're benefitting by carrying such a station, they can elect not to pay and not carry that station. The problem that the cable companies have is that they know that a lot of their subscribers *do* want the big broadcast stations, which means those channels do have real value.

 

[arnoldevns]

Cable does charge for OTA stations. The bare bones package on my system has OTA plus local government channels for 7 bucks a month. Box rental is extra. Without OTA stations, cable would have far fewer subscribers. It is time for cable to recognize the value of these stations since they are charging me for them anyway.

 

[arnoldevns]

w9wi brings up a great point: what if all OTA stations in a market demanded retransmission consent, and couldn't work out a deal? cable in that market would die quickly as people switched to satellite or some other provider like fios. BUT if those OTA stations did the same thing with all local providers, antenna sales would skyrocket and cable would suffer greatly.

 

[vchimpanzee]

Cable does charge for OTA stations. The bare bones package on my system has OTA plus local government channels for 7 bucks a month. Box rental is extra. Without OTA stations, cable would have far fewer subscribers. It is time for cable to recognize the value of these stations since they are charging me for them anyway.

No box needed for me. I will pay about twice that starting next month. I've heard more, but hopefully that's just in another market where I happen to look at an online newspaper. Add a shopping channel, a local all-news channel, TV Guide Channel, an extra CBS station which is nearby, and WGN. And public access. There used to be a community announcements channel with a Rush Limbaugh station, which could have been really valuable for taping purposes, seeing as how I never think to listen at home.

I get an almost watchable signal from a lot of other stations, as I discovered during the "A Christmas Story" marathon. Hey, analog sometimes didn't do any better than that!

 

[wncc]

Cable does charge for OTA stations. The bare bones package on my system has OTA plus local government channels for 7 bucks a month. Box rental is extra. Without OTA stations, cable would have far fewer subscribers. It is time for cable to recognize the value of these stations since they are charging me for them anyway.

No box needed for me. I will pay about twice that starting next month. I've heard more, but hopefully that's just in another market where I happen to look at an online newspaper. Add a shopping channel, a local all-news channel, TV Guide Channel, an extra CBS station which is nearby, and WGN. And public access. There used to be a community announcements channel with a Rush Limbaugh station, which could have been really valuable for taping purposes, seeing as how I never think to listen at home.

I get an almost watchable signal from a lot of other stations, as I discovered during the "A Christmas Story" marathon. Hey, analog sometimes didn't do any better than that!

chimp, if you're on TWC, your rates are going up. Trust the Charlotte Disturber, It should have been mailed with your last cable bill.

 

[quadraphonic]

w9wi brings up a great point: what if all OTA stations in a market demanded retransmission consent, and couldn't work out a deal? cable in that market would die quickly as people switched to satellite or some other provider like fios. BUT if those OTA stations did the same thing with all local providers, antenna sales would skyrocket and cable would suffer greatly.

That would probably be some kind of illegal "collusion."
Which of course the cable companies couldn't be guilty of, given the monopoly that cable companies enjoyed, with the local governments' help.

 

[TexasTom]

w9wi brings up a great point: what if all OTA stations in a market demanded retransmission consent, and couldn't work out a deal? cable in that market would die quickly as people switched to satellite or some other provider like fios. BUT if those OTA stations did the same thing with all local providers, antenna sales would skyrocket and cable would suffer greatly.

Retransmission deals for a given market generally don't all expire at the same time, which means that you never have a situation where all stations are in simultaneous negotiations.

In a way, I think it is unfortunate -- if all broadcasters in a market were able to get together and negotiate as a group, we would quickly find out what those broadcast signals are really worth. To put it another way: remove all four of the big four network affiliates from your local cable line up, and how many subscribers would the cable company be able to keep?