Retransmission Consent Is Destroying Diversity
The retransmission consent system is destroying diversity, through ownership of TV stations and availability of small and diverse cable networks.
Consider the landscape of television station ownership. Large TV groups are gobbling up affiliates by the dozen, seeking skyrocketing retrans fees. At the same time, they’re consolidating newsrooms to cut costs. Currently, only half of stations show any “local” news.
In 2006, according to Free Press, out of the 1,349 commercial television stations, only 44 – or 3.26% – were minority owned. Today, according to FCC Commissioner Mignon Clyburn, there’s just 5. The number licensed to black owners has dropped from 21 to 3, 2 operated under a sharing arrangement. As Clyburn said, “the numbers are trending incredibly downward.”
The retransmission consent system also results in fewer diverse and independent cable networks. In a letter to the FCC, the heads of several independents – Starz, The Outdoor Channel, The Africa Channel, Retirement Living TV, and GMC: Uplifting Entertainment – wrote:
Independent programmers are entrepreneurial risk-takers who are dedicated to creating programming aimed at niche or under-served segments of the television audience. Unlike broadcasters, we have no special government granted privileges, such as mandatory carriage rights or basic tier placement guarantees. Moreover, the bundling tactics of broadcasters allow them to capture a disproportionate share of the diminishing number of channels available for video programming, leaving fledgling and established independent programmers – and the audiences we seek to serve – at a distinct disadvantage.
Broadcasters often tie carriage of their government-privileged local affiliates to carriage of their cable networks. It’s no surprise that the number of cable networks owned by the Big Four broadcast networks has gone from 4 in 1992 to over 104 today.
The networks the Big Four own are among the costliest. According to SNL Kagan, half of the 50 most expensive are owned by Disney, CBS, NewsCorp and Comcast. Of the $28 consumers pay for the top 50, $16 goes to the Big Four.
When pay-TV companies carry these expensive, broadcaster-owned networks (sometimes against their will), there’s less room for independent networks. In a letter to former Texas U.S. Representative Charles Gonzalez, Michael Schwimmer, CEO of Nuvo TV (formerly Si TV), wrote that retransmission consent system “results in the crowding out of independent, diverse programmer.” He explained:
I have personally experienced the well-known practice of broadcast and cable network groups tying the availability of broadcast networks and key cable content to force carriage of unwanted or less desirable programming. Frankly, American consumers would be shocked to know that the conversation between a media company and distributor rarely centers upon the quality, originality or value of the programming, and even less so on consumer demand. Rather, the crux of these of these high stakes negotiations is the additional programming the distributor must agree to carry in order to retain access to highly popular, must-have programming (e.g. ESPN or Fox News), without which the distributor cannot remain competitive.
Until retransmission consent is fixed, broadcasters will continue to squeeze out minority owners and small, independent programmers. All in the name of “localism,” which has been demolished by retransmission consent. Consumers deserve video rules written in, and for, the 21st Century.