Broken Retransmission Consent System Now Spiraling Out of Control

The 21-year-old retransmission consent system is now spiraling perilously out of control. Not only have viewers been subjected to more blackouts this year than ever before – 126 and counting – but new projections show they face enormous retransmission consent fees in the future.

SNL Kagan recently released a new report that blows their 2012 predictions out of the water. Their new projections call for retrans revenues to reach $7.6 billion by 2019 versus $3.3 billion for this year. Whereas SNL Kagan had only a year ago projected retrans fees would reach $6 billion by 2018, it now says those fees will reach $7.15 billion by 2018. Consumers will ultimately bear the brunt of these costs.

The driving force behind these increases is twofold:

  • Broadcasters threaten more blackouts on consumers to gain leverage in negotiations
  • Broadcasters continue to consolidate for more muscle to drive up retrans rates.

Indeed, 2013 has been a record year for blackouts, with 126 so far and 21 days left to go. At one point this year, viewers of six different pay-TV providers were blacked out from watching broadcast stations in 58 different markets.

At this point, with five different hearings that have addressed retransmission consent problems, it’s obvious to everyone (except the National Association of Broadcasters) that the current system is unsustainable and in need of immediate reform. Broadcasters like to claim these fees support local programming, but analysts say broadcasters will continue to use the outdated rules to send these funds right back to the networks. SNL Kagan projects that over time 50% of affiliates’ retrans payments will go to the networks rather than pay for local programming.

Consumers cannot wait for several more years of study and multiple Congresses. There is clear, bipartisan support for immediate action to address our broken retransmission consent system. Congress should not wait until the whole system collapses.

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