Retrans fees could reach $6 per sub, broadcasters say

Network affiliates, which currently charge pay-TV operators a typical fee of around $1 per subscriber to carry their signal, could soon spike their bounties to as much as $6 per subscriber, according to the CEO of broadcast station owner Bonten Media Group.

Speaking at the SNL Kagan TV and Radio Finance Summit in New York, Bonten CEO Randy Bongarten said operators will soon be paying "$4, $5, $6" a subscriber in retransmission licensing fees, according to TV News Check.

"The good news is we have a very valuable product, and the negotiations with the MVPDs are basically very simple," Bongarten said. "How many customers are they going to lose if they don't have us? It's no more complicated than that."

Brian Brady, CEO of Northwest Broadcasting, agreed, noting that certain station groups are in the position to command $2 a subscriber in the next negotiation cycle with pay-TV operators.

"I think the rates are going to continue to go up," he said.

Bongarten and Brady's analysis jibes with SNL Kagan research, which predicts aggregate retrains fees to spike over 14 percent by 2016 to $7.2 billion. The research firm now projects retrains to hit $10.3 billion by 2021.

For cable, satellite and IPTV operators, it's a lot of coin, especially when you consider they paid nothing for broadcast signals as recently as five years ago. 

For his part, Brady urged smaller broadcasting entities to negotiate hard with operators.

"Smaller companies like ours have to be determined, and have to go toe-to-toe with them," he said. "Their business model is predicated on growing revenue per subscriber. They can do that in two ways--either charge subscribers more or pay us less money. And they want to pay us less."

For more:
- read this TV News Check story

Related links:
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Broadcast retrans fee growth on pace to hit $9.3B by 2020