When AT&T (NYSE: T) U-verse recently signed agreements with CBS--as detailed in FierceTelecom--it said it would bring customers "more value with high quality and compelling content." It didn't say it was wittingly or unwittingly contributing a piece to a monetary retransmission fund pie that the Big Eye Network anticipates will reach $1 billion annually.
CBS and other broadcasters have for some time used retransmission fees--the money they charge MVPDs for the ability to carry their signals on their programming lineups--as a way to allay an advertising erosion that is blamed, to an extent, on the explosion of different channels seeking viewer attention and advertising dollars. Even CBS, best known as a broadcaster, included more than its network channel in the deal with U-verse. Also part of the retrans package are pay TV network Showtime (which collects money on its own from both MVPDs and subscribers), The Smithsonian Channel and The CBS Sports Network.
Multiple reports cite statistics from Sanford C. Bernstein analyst Todd Juenger saying that by 2016, CBS expects to pull in $1 billion from retransmission consent fees. These fees will come from cable, satellite and telco operators as well as CBS's own affiliates. The report revises earlier estimates that CBS would hit that mark only by 2017.
Juenger, a Los Angeles Times story said, based his figures on a $1.22 per-subscriber, per-month fee from MVPDs for CBS-owned stations as well as 50 percent of whatever the affiliates rake in from the MVPDs for their free over-the-air transmissions.
As with any retransmission story, of course, there is a caveat. Big broadcasters and programming conglomerates are more likely to get big bucks from big cable operators. Once the number of subscribers and viewers declines--as in tier two and three cable operators in tier two and three communities--it's less likely that everyone will be paying $1.22 per sub per month.
CBS is not alone in pulling in--or trying to pull in--the big bucks. Fox and ABC are also on a retransmission jag. NBC, which is owned by Comcast (Nasdaq: CMCSA), is not, and "seems mired down in the inter-company complications of Comcast being NBC's biggest distributor, and the contradictory motivations and unintended consequences that causes," noted the Times.
- the Los Angeles Times reported this story
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