Time Warner Cable's (NYSE: TWC) current standoff with CBS (NYSE: CBS) over retransmission fees is being closely watched by other TV distributors such as NBC, ABC and Fox and could ultimately set the standard for future negotiations.
Typically retransmission negotiations focus on small fee increases, but CBS has asked for a big increase to make up for what it considers a historic injustice in terms of what cable and satellite providers pay for their content. According to SNL Kagan as reported by Hollywood Reporter, CBS wants to leap from 66 cents per subscriber per month to $2 per subscriber per month.
According to SNL Kagan analyst Justin Nelson, any time one of the larger networks such as CBS sets a new standard in terms of pricing, it's likely the rest will follow. CBS is considered a trailblazer in this area, and the company is saying it delivers much more in terms of programming and viewership and believes it should be paid market rates.
SNL Kagan also noted that in 2011, total broadcast retransmission fees were only $1.76 billion, while cable channels were paid around $27 billion that same year.
- see this Hollywood Reporter article
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