Washington, D.C. – SJL Broadcasting has pulled its signals from DIRECTV customers’ homes in three cities, including the local CBS stations in Corning, NY and Erie, PA that are broadcasting the NCAA Final Four Men’s National Semifinals basketball games this weekend. Broadcasters are once again using blackouts as a weapon against consumers in a naked attempt to get consumers to pay higher TV fees.
SJL Broadcasting’s blackout of six local broadcast stations affects DIRECTV subscribers in Pennsylvania, New York and Hawaii. In another dispute, Hearst Television’s ongoing blackout of DISH Network has left fans without access to their local CBS channel in Louisville, KY and Des Moines, IA.
“It is simply outrageous that a broadcaster can unilaterally pull the plug on tens of thousands of consumers on the morning of one of the biggest sporting events of the year,” said ATVA national spokesman Trent Duffy. “SJL Broadcasting holding its programming for ransom, telling consumers and fans to pay higher TV fees or you’ll miss the Final Four. It’s a shameless scheme that has no place in American society.”
Broadcast retransmission fees are increasing at an astronomical rate, and will cost U.S. consumers and satellite and cable operators $10.6 billion by 2020, according to industry research firm SNL Kagan. Indeed, Axios recently reported that, “Since 2010, broadcast and cable companies have raised retransmission rates more than 3700%, in an effort to make up for lost revenue from rising programming costs and declining ad revenues.”
Station-induced blackouts are already on a record pace in 2017, totaling 142 blackouts, including more in the first four months of the year than all of 2016 combined. As this surging blackout crisis rolls on, big network executives are not only raking in cash at new record highs, but local stations have shown little courage to stop gouging the far fewer American families who choose to remain loyal.
- CBS Chief Les Moonves said his company’s $1 billion haul in retransmission consent fees was “a full year ahead of schedule, and continues to grow rapidly,” despite ongoing reports the company’s revenue performance is actually down. CBS advertising revenue—the largest contributor to CBS’s top line—fell 2.8% to $1.8 billion, according to the Wall Street Journal. In another recent report, CBS COO Joe Ianniello expects to be taking in about $2.5 billion in broadcast retransmission licensing and reverse compensation fees by 2020.
- NBC Universal’s retransmission consent revenue was up 14 percent, with the company’s overall revenue for its broadcast unit hit $2.8 billion. NBC Universal Broadcast Television business earns the majority of its revenues from advertising and retransmission revenues.
- 21st Century Fox reported higher earnings for its fiscal second quarter as revenues rose at its cable and broadcast TV operations.
- ABC/Disney broadcasting operating income grew 28% from 2016 to 2017, largely due to higher affiliation revenue.
As advertisers shift more support elsewhere, innovation-adverse local stations that hold exclusive control over which families can get them in their local lineups, regardless of their choice of provider, have resorted to pulling their stations from local homes, typically just before a major event like the start of the NFL and CFB football seasons, the NFL playoffs or – in SJL Broadcasting’s case — the NCAA Men’s Basketball tournament – that remain popular. Still, even those events aren’t immune to audience declines, as viewership for Fox’s recent Super Bowl LI was down for the second year in a row and ratings for regular season NFL games are also decreasing.
“All of this demonstrates what the American Television Alliance has maintained since its founding – existing rules do not protect the viewing public from broadcaster blackouts and that Congress and government regulators should act,” said Duffy.
TV Blackout Crisis: Blackouts Break Records As Broadcasters Rake In More Money from Viewers
TV blackouts hit a record in 2015, affecting 12 million Americans. Since 2010, millions of Americans have seen dark screens instead of watching their favorite channels due to 792 broadcaster blackouts. With 142 blackouts already this year, 2017 is on pace to be the worst year for blackouts ever.
- 142 blackouts to date in 2017 – smashing previous Q1 records
- 104 blackouts in 2016
- 193 blackouts in 2015
- 94 blackouts in 2014
- 119 blackouts in 2013
- 90 blackouts in 2012
- 42 blackouts in 2011
- 8 blackouts in 2010
When blackouts finally end, consumers get their programming back, but at a higher cost:
- SNL Kagan also projects that over time that 50% of affiliates’ retrans payments will go to the networks rather than pay for local programming.
- SNL Kagan data shows that retrans fees are the fastest rising part of programming costs
- Retrans fees have grown an astonishing 22,400% [no, that’s not a typo] since 2005 and more troubling, have seen 40% annual increases over the last 3 years.
The American Television Alliance (ATVA) brings together an unprecedented coalition of consumer groups, cable, satellite, telephone companies, and independent programmers to raise awareness about the risk TV viewers face as broadcasters increasingly threaten service disruptions that would deny viewers access to the programs they and their families enjoy.
For more information about ATVA, visit our website. Follow us on Twitter @ATVAlliance.