Television's Power Shift: Cable Pays for 'Free' Shows

TELEVISION'S POWER SHIFT: CABLE PAYS FOR 'FREE' SHOWS
[SOURCE: Wall Street Journal, AUTHOR: Peter Grant peter.grant@wsj.com and Brooks Barnes]
All over the country, a shift in the balance of power between cable operators and broadcasters has station owners -- including giants such as CBS Corp. -- lining up to demand new cash payments. If forced to pay, cable operators may have to raise prices or see their profits erode. The struggling broadcast networks such as CBS, on the other hand, would benefit from a major new revenue stream: cable payments to the local stations that networks own. Cable companies have been picking up broadcast stations' signals without paying cash almost since the birth of cable TV more than 50 years ago. But broadcast stations are beginning to flex their muscles now. Cable operators face growing competition from satellite operators and new TV ventures by phone companies -- both of which pay to retransmit broadcast signals. Meanwhile, local broadcast stations are seeking new income to make up for falling ad revenue, as TV viewership of local programming falls and digital video recorders such as TiVo let viewers skip ads. Congress also has been tilting the playing field, gradually allowing broadcast companies to accumulate more stations and thus bargaining power. The Federal Communications Commission, which has locked horns with the cable industry on numerous issues under Chairman Kevin Martin, issued a recent ruling supporting broadcasters' position, increasing the pressure on cable operators to back down. Based on the changing dynamics, media research firm Kagan Research predicted last year that station owners will be able to collect almost $400 million in retransmission fees from cable by 2010 -- and $1 billion altogether including fees from phone and satellite operators, up from $230 million last year. The fees some broadcast stations have been asking could drive cable bills up by around $2 a month. Some broadcasters already are talking about at least doubling that over the next few years, and retransmission fights have been breaking out all over the country.
http://online.wsj.com/article/SB117064226242297903.html?mod=todays_us_page_one
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See also --
* MEDIACOM CUTS SINCLAIR DEAL
[SOURCE: Multichannel News]
After months of bickering and lobbying local and federal regulators, Mediacom Communications cut a retransmission-consent deal with Sinclair Broadcast Group late Friday. The agreement restores the local broadcast signals of several Sinclair stations in 12 states, which the broadcaster had pulled from Mediacom after the eighth largest U.S. cable operator balked at paying cash in exchange for retransmission consent. Terms of the deal weren't disclosed.
http://www.multichannel.com/article/CA6413225.html?display=Breaking+News