Rocketing Retrans Fees Seen Elbowing Out Indie Networks from MVPDs
The biggest hurdles to independent programming getting on MVPD platforms are the retransmission consent rules regime and the skyrocketing retrans fees being paid to broadcasters, indie programmers and MVPDs said at a Multicultural Media Caucus Hill briefing Wednesday. Fixes could include the Modern TV Act (HR-3994) and using the Satellite Television Extension and Localism Act renewal (STELAR) to change the video marketplace, some said.
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Indie programmers, particularly minority ones, could benefit from a return to the tax certificate programs used throughout the 1970s and '80s, said Multicultural Media, Telecom and Internet Council President Maurita Coley, citing the Expanding Broadcast Opportunities Act (HR-3957) sponsored by Rep. G.K. Butterfield, D-N.C. She also urged rejiggering the DBS set-aside for educational programming to expand to include indie commercial channels. Jeff Blum, Dish Network senior vice president-public policy and government affairs, said former FCC Commissioner Mignon Clyburn looked into the issue, and Congress should do likewise.
Dropping a Disney-owned channel isn't an option given bundling requirements, so rising programming costs come at the expense of indie programming, said Roger Seiken, Wow Communications senior vice president-video programming. Indie network Revolt's growth has been largely due to digital platforms like Sling and social media, said content distribution head James Brown. Added Seiken, with what Wow pays to carry one big four affiliate in a major market like Chicago, “I could carry 30 Revolts.”
The problem isn't individual local affiliates but large broadcast groups, said Blum. But as retrans fees go up, station localism is declining and local newsrooms are shrinking, he said. "If you're paying more, you should be getting better quality," he said. Blum said the over-the-top industry, not burdened with such legacy regulations, is flourishing and seeing strong competition.
NAB emailed that with MVPDs like Dish and DirecTV having 40 percent profit margins, "the claim that there is no room to add independent programmers to digital platforms with infinite channel capacity fails to pass the laugh test."
Seiken said the FCC's signing off on Nexstar/Tribune (see 1909160065) will mean even more leverage in talks with MVPDs, and fees going up that much faster. Blum said broadcasters are "exploiting loopholes" in media ownership rules to own multiple stations in a single market, and Congress should put a stop with a hard cap of one station per market. "That's how you keep prices moderated," he said.
The Modern TV Act is a "tremendous opportunity" for revision, Seiken said. Blum called significant that it has strong bipartisan support; House Minority Whip Steve Scalise, R-La., and Rep. Anna Eshoo, D-Calif., are sponsors. He said hearings on it could be in October. Blum said STELAR is needed to ensure good-faith negotiation rules remain and to avoid the blackouts of local channels that would hit 875,000 DBS customers nationwide. But STELAR also provides a good opportunity for addressing the retrans problem, he said.