Good gracious, everyone is trying to get a piece of the action. The nation’s major television networks are in a fight till the death to gain a share of viewers’ monthly cable bills. Each side is claiming that the cash is crucial to their survival but I’m more inclined to believe that it’s more necessary for the smaller stations than for a giant like FOX. CBS, Fox, and ABC are asking independent television stations carrying their stations for a cut of they payments they get from cable, satellite, and telco companies. There’s even a rumor that networks want half or more of the compensation that their affiliated stations receive.
Revenue was once based upon advertising but now television companies see it more as a subscription supported business. There are lots of different ways to view shows on their channels and they are losing money because of it. With deeper pockets, the cable networks are able to bully around the broadcasters more. National broadcast networks saw ad spending fall 12% in that period, a drastic drop-off.
Experts are saying that the local television stations are key. Not only do they offer local feeds but they also have to approve a retransmission consent, allowing them to carry signals to viewers. The major networks own a few local stations in the major markets across the country but in order to reach the remaining 70% of the country, they must strike deals with their affiliates.
Because of this deal, they are saying that they should be paid a premium to bring popular programming like American Idol or the NFL to viewers.
The networks argue they deserve the bulk of any compensation because they provide expensive national programs like “NCIS,” “American Idol” and National Football League games. TV stations typically supply local news, daytime shows, and a local identity for the network. This is so hypocritical…the larger companies want sharing so they can take a bigger bite out of the smaller fish. So goes the entertainment business…
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