Charter and Belo Battle

Retransmission stalemate comes to a head
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The latest standoff in the retransmission arena has Belo pitted against Charter Cable. In St. Louis, Belo’s CBS affiliate, KMOV-TV, will be pulled from Charter New Year’s Eve, according to the Belleville News-Democrat. An estimated 440,000 cable households will be affected.

WCNC-TV, Belo’s NBC station in Charlotte, N.C. is on the same timeline, the Charlotte Observerreports. WVEC-TV, Belo’s ABC in Norfolk, Va., will be likewise affected, the Suffolk News Heraldreports. So will KING-TV, the NBC in Seattle, according to the station’s Web site. WFAA-TV, the Dallas ABC affiliate, is counting down as well. The Dallas Morning News is reporting that WFAA is asking for a penny a day, or about 30 cents a month per subscriber. That’s on par with what most broadcasters appear to be asking of multichannel video carriers.

By comparison, ESPN, the priciest channel on cable systems, gets around $3.65 per subscriber per month. ESPN and other channels that launched exclusively on cable systems (before DBS was available) were able to charge operators, who needed content to sell their service. The model stuck over the years, while most broadcasters provided their own signals free.

As more broadcasters went HD, cable operators increasingly charged a premium for hi-def service. Broadcasters responded by negotiating for carriage-fee deals similar to those secured by the likes of ESPN.

Public reaction to the retrans dispute is mixed. Those who left comments with The Dallas Morning News had little sympathy for WFAA.

From someone logged in as “Mzak:” “Shows how much WFAA cares about us... their viewers! I have Charter, and I don’t care about who gets compensation. WFAA, you aren’t hurting if you aren’t receiving compensation from one cable company!”

Belo, like every other broadcast business, is hurting, one cable company or otherwise. Shares on Monday morning were trading at $1.60, down 12 cents from the opening bell, and from a 52-week high of $18.06. The company earlier this month issued guidance that its fourth quarter revenues would be down 10 percent from last year.

The strategy of pulling TV station signals from cable systems over retrans fees actually underscores the desperation of the broadcast business. Belo is putting 135,000 housholds on the line in the Dallas market alone; households that will have to be subtracted from WFAA’s cost-per-thousand rate card.

Charter fared no better with the Dallas crowd.

“I’ve been thinking about dropping Charter because of their lack of programming, poor customer service and ever increasing fees… This dust up looks like the final straw,” writes “Dezdmona.”

All three stations are directing potentially disenfranchised viewers to get DirecTV or Dish. AT&T’s U-Verse also carries KMOV in the St. Louis market. WCNC published its over-the-air digital position, Channel 36.1 and encouraged people to tune in that way.

Retransmission is currently the only source of return on investment broadcasters have generated for the millions they’ve spent to implement digital and high-definition television. Cable operators in turn are feeling squeezed by competition from telcoTV and satellite operators, and are somewhat ill-humored about yet another operating expense. The satellite and telcoTV providers are likewise affected.

A spate of retrans battles erupted earlier this month between smaller carriers and individual TV stations. Young Broadcasting and Dish Network reached crossed arms and jutted chins last week. LIN TV went to the mat with MetroCast earlier this year, and pulled 15 stations from Time Warner systems in October.