I recently wrote that the
cable industry’s call for retransmission reform was a smokescreen for hosing
subscribers with bloated programming packages. I dropped the $100 cable package
that came with my new coordinates because it was comprised mostly of channels I
would never watch. (See
,” from the Jan. 16 issue of
Technology.) I blamed in the industry for its own slow demise, since a la carte
programming is increasingly
Then I got a call from a cable operator with a system serving fewer than
3,000 subscribers. His experience is significantly different from that of my
former provider, which has several million subscribers across the country. With
so much consolidation at the top of the pay TV industry, it’s easy to overlook
the hundreds of small businesses in both cable and broadcast television. For
those businesses, retransmission negotiations are an entirely different
prospect from those between massive providers.
no patience whatsoever with the battles waged among News Corp.,
Disney, CBS and Time Warner, Cablevision, DirecTV and Dish. (Comcast is omitted
because no one fights with the Borg.) Not one of these companies cares one iota
for the poor beleaguered “consumer” whom they claim is “harmed” by the other
guy when negotiations get heated. “Consumers” are otherwise known as
“incremental revenue units” to these companies. It’s ridiculous to think for a
moment they would ever have anyone’s best interest at heart other than
their own. That’s business, and we all know it, and that’s fine. It’s just
their “consumer harm” nonsense that starts red-zoning the BS meter.
The cable operator who called me—we’ll call him “Clark”—does business in a
community of 2,225 people. His family’s been in the business for 40 years. His
subscribers know him by name. I don’t imagine he hails them as “hey, there,
Incremental Revenue Unit No. 55. How’re the kids?”
Of the $53 he charges for a Classic Cable package of 71 channels, he pays $27
in programming fees. Not all of that is retrans, of course. There are plenty of
cable-only channels pulling shenanigans. He told me of a major league sports
network that demands fees on 50 percent of his subscriber base, even if they’re
on a tier delivered to only 10 percent.
What’s galls Clark even more, however, are how the broadcast networks leverage carriage
of their owned-and-operated stations. Access to local O&O signals are
increasingly attached to compulsory carriage of the kind of networks that drove
me to drop the cable package here. No one else watches them either, Clark
said, but if he wants the local broadcast signal, he’s got to squeeze them in.
“They are leveraging popular content to get low-rated networks on systems,” he
said. “Where’s the incentive to be good? Where’s the incentive to have quality
content when you’re going to get paid anyway?”
It’s hard not to look at the programming lineup on most cable channels and see
that he has a point.
“I would love to have a greater number of tiers with more variety,” he said.
“Say you’re a sports fan, and I could just provide one sports channel… I would
like nothing better to do that, but my hands are tied.”
Retrans reform, Clark said, is vital to the survival of his business and
hundreds of others like it. He would like to be able to negotiate for networks
individually, without having to pay a premium if he doesn’t carry all the
add-ons. How that regulation is written, I don’t particularly know, but a one-size-fits-all
clearly will not.