By : Erik Gruenwedel | Posted: 18 Oct 2010
The ability for consumers to access most prime time television shows online for free just hours after their broadcast is undermining lucrative retransmission fees, among other repurposed content business models, an analyst said.
Retransmission fees are levied by national broadcasters Fox, CBS, NBC and ABC on cable and satellite operators as a means of generating incremental revenue on original programming. With an ongoing weak advertising market, broadcasters have been upping the fees — much to the annoyance of multichannel operators.
With some cable operators refusing to pay the higher fees, subscribers have found blank screens (as Cablevision and Dish Network users have recently for select Fox shows) in place of programming as parties engage in public wars of words.
Richard Greenfield with BTIG Research in New York said the fact he could watch CBS’ “Undercover Boss” on TV.com and CBS.com less than 12 hours after the reality program’s national broadcast is defeating broadcasters’ capacity to demand higher retransmission fees.
Greenfield is a frequent critic of media companies, notably movie studios, repurposing content via low margin channels such as $1-per-day disc kiosk rentals and streaming. He said broadcasters should emulate cable and satellite operators rolling out so-called “TV Everywhere” platforms, which grant subscribers free access to content on demand and online.
“Broadcast television executives can drive [retransmission] fees, mitigate cord-cutting and prevent the ISP-only subscriber dilemma by moving their online streaming content into an authenticated model,” Greenfield wrote in post.
Specifically, Greenfield decried NBC’s recent agreement with Netflix to offer “Saturday Night Live” episodes on the latter’s streaming service 24-hours after the episode airs on national TV. He called on broadcasters to impose similar embargoes that select studios (Warner, Fox and Universal) have put in place with rental kiosks and Netflix for new release movies.
“If services like Netflix were able to attain a wider range of fresh content, consumers would take digital cord-cutting alternatives more seriously; [thereby] wreaking havoc on the current multichannel video ecosystem,” Greenfield wrote. “Consumers must be made to realize that nothing is for free anymore (at least legally).”
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