Broadcasters Pretend to Care about Consumers in Last-Ditch Bid to Save Archaic Video Rules

You may have heard about the new front group that broadcasters announced under the guise of “protecting consumers.” After years of blacking out consumers, broadcasters are only now pretending to express concern for those same consumers. Truth is, the new front group is doing little more than rehashing the same, tired arguments that broadcasters have been using for years to protect their retransmission consent profits.

Ultimately, broadcasters can’t disguise the facts that there are now more TV blackouts than ever before, that retrans fees are skyrocketing, and that they’re trying to protect decades-old rules that were written when the video marketplace was vastly different.

Let’s take a look at some of their claims:

Claim: Blackouts are “manufactured crisis” – 90% caused by three companies

Response: The idea that pay-TV providers would risk losing customers by blacking them out borders on the stuff of conspiracy theory. Moreover, the smaller pay-TV companies have no choice but to give into the demands of broadcasters because they don’t have the resources to fight back against broadcaster extortion. Finally, broadcasters are involved in 100% of retrans disputes!! Read more

Claim: Broadcasters favor free market solutions

Response: Nothing could be further from the free market than retransmission consent. In what world are broadcasters living where provisions like “must buy,” “must carry” and “syndicated exclusivity” amount to the free market.

From the Free State Foundation: “For over 20 years now the retrans consent/must carry regime has subjected the market for video programming to forced access mandates and to restrictions on private bargaining. Under “must-carry” rules, video broadcasters are granted special rights against multichannel video programming distributors (MVPDs), such as cable and direct broadcast satellite (DBS) operators. Those rules allow broadcasters to compel carriage of their program content by an MVPD on a basic tier channel.” Read more.  Also read this Hill blog post.

Claim: 99% of retrans disputes are solved through good faith negotiations.

Response: The threat of broadcasters blacking out pay-TV consumers hangs over every negotiation. Pay-TV companies lose subscribers when there are blackouts, so they have no choice but to agree. And ultimately, it’s consumers who foot the bill.

Claim: Cable companies are “stifling innovation”

Response: This has to be one of the most outright laughable claims that broadcasters are making.  Broadcasters have sued to prevent virtually every new TV innovation – from VHS to iPad apps to DISH Hopper.

Claim: Pay TV reaping record profits

Response: Retrans fees projected to go from $3.3 billion in 2013 to $7.6 billion in 2019. These fees are paid by consumers and go straight to the broadcasters. These same broadcasters then boast on their earnings calls to Wall Street about their retrans profits.

Claim: “Protecting America’s TV Viewers”

Response: Blackouts are up 958% in 4 years. If they cared about protecting viewers, they’d stop blacking them out. Further, the same broadcasters are willing to take their networks to pay-TV if the pending Aereo decision threatens their retrans profits.

Claim: “Visit for the truth on pay-TV”

Response: They’re attacking pay-TV providers – who deliver network TV to 90% of America – while we are attacking the problem.

Claim: “For years cable customers have been overpaying 4 lower-rated cable channels they don’t want or watch –> #payTV industry gets #recordprofits

Response: Broadcasters own many cable channels and use them as leverage to force pay-TV providers into higher rates. Prior to the 1992 Cable Act, the four major broadcast networks owned a total of four cable networks; now they own at least 104, which is a 2500% increase. Read more

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