Thursday, November 12, 2009

Greed Will Change the national Broadcaster and Affiliate Relationship

In these economically challenging times, our true intentions become clear. And in the TV world, parents eat their young! "ABC, CBS, NBC and Fox each are angling to get a cut of the compensation -- known as retransmission consent -- that cable and satellite companies pay the affiliates to carry their signals." Doesn't that national carriage enable you to charge more for your advertising. Do the local affiliates get a piece of the national buy, too? Perhaps the whole model needs to be reexamined given these changing times.

It seems we have gotten to a point where local affiliation is of lesser importance than being hyper local. Affiliates need to focus more on their own communities and less on the national programming. Heck with NBC pushing The Jay Leno Show, affiliates should be asking for compensation from NBC. Talk about hurting local news ratings at 11am.

So why shake up the model now? As ad dollars have moved from broadcast to cable, new revenue streams must be found. "Retransmission revenue isn't a huge piece of the broadcast pie, but it's a lucrative and growing one. SNL Kagan estimates total retransmission dollars at $739 million this year, but expects that to grow to $1.3 billion by 2012." Thus the desire to share in that pie. Could a revolt spell the beginning of the end of this national-local model, let's wait and see.

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