SAN FRANCISCO – Broadcast television isn't going to die anytime soon, but it is sitting on a powder keg that threatens its existence. Platforms like Didja and Locast see themselves as solutions.
The issue is rising retransmission fees charged by broadcasters to TV providers. Providers then pass those increased costs down to consumers and accelerate the cord-cutting trend, which is largely driven by consumers growing wary of paying for expensive TV bundles. That was one of the points touched on at a panel discussion Thursday during the TV of Tomorrow Show.
Mitch Weinraub, director of product development at AirTV, said that retrans fees are costing pay TV subscribers between $12 and $15 per month for broadcast television channels. It’s turned into a significant portion of overall broadcast revenue.
“Broadcasters have become addicted to the drug of retrans and now it’s coming back to bite them,” Weinraub said.
David Goodfriend, founder of Locast, said that lawmakers are again looking at retransmission fee reform. But he warned that congress is somewhat captured by the current system and has friends on both sides, both of which are completely dug in. So, the easiest thing for Congress to do is nothing.
The panel also said that broadcast has other things going against it like lack of awareness that signals are available for free over the air, gaps in coverage for over-the-air signals and restrictive streaming rules put in place by affiliates.
RELATED: Addressable TV advertising success boils down to standards
But AirTV, Didja and Locast are all looking to give consumers easier and less expensive access to broadcast channels by integrating OTA signals into a streaming device user experience and by delivering broadcast signals over the internet.
Locast and Didja both offer free services, delivering local broadcast television over IP networks. While neither service has gotten close to nationwide coverage yet, they have attracted the attention of consumers. Locast said that “hundreds of thousands of Americans” have signed up for its service.
Goodfriend said that local broadcasters love what Locast is doing and have offered to help. He added that some of Locast’s antennas and servers are both being hosted by a local broadcaster in Philadelphia. Locast is putting the entire signal, including ads, on the internet and giving them the backend analytics. He said that broadcasters should think of Locast as a way to extend the revenue stream, and he suggested broadcasters should do dynamic ad insertion deals with platforms like Locast and Didja.
Jim Long, CEO of Didja, echoed many of the same sentiments as Goodfriend. He said the public financed the internet and the airwaves so delivering broadcast TV over an IP network is a “natural thing to do.”