Don’t Call It Free TV

Aug 7, 2015

CBS Corp. Gorges at the Retrans Trough; Les Moonves Gloats at Higher Fees for TV Fans

National TV Viewer Advocate Renews Call for Congress to Fix Broken Laws that Let Broadcasters Hold Viewers Hostage and Gouge Consumers

Washington, D.C. – The American Television Alliance (ATVA) today reacted to the news that CBS Corporation is on pace to receive more than $2 billion a year from broadcast retransmission licensing fees from pay TV operators, as well as “reverse compensation” fees from broadcast stations by 2020. CBS Corp. CEO Les Moonves announced the blockbuster figures during the company’s second quarter earnings call.

“We had previously said we’d get to $1 billion by 2017. We will now surpass that target next year in 2016. These are dollars that fall right to the bottom line,” CBS CEO Les Moonves, August 6, 2015.

ATVA national spokesman Trent Duffy commented on Moonves’s announcement:

“The retrans racket is the greatest heist ever perpetrated on the American people. Broadcasters are bilking billions from TV fans for broadcast signals that are “free” over the air. What’s worse is that Congress has failed to modernize the old, broken laws that permit the theft. Retrans fees are now the fastest growing part of Pay TV consumers’ bills.

“While CBS gloats at the billions it pockets from unsuspecting consumers, local news and public interest programming is dying – the very institutions that these fees are intended to support. Reverse retrans deals suck resources out of local communities and line CBS exec pockets. Meanwhile, local stations are cutting back newsroom budgets and laying off reporters. According to the FCC, 32 percent of local TV stations ‘did not air a single minute of news programming.’

“CBS’s earnings call is the latest piece of solid evidence that TV fans will keep getting gouged until Congress steps in and stops the heist. Washington has a duty to fix these broken regulations that rig the game in the favor of the big special interest at the expense of the American consumer. Congress can no longer stand on the sideline while TV fans are used as pawns and broadcasters gorge on outrageous TV fees. You can call this broken TV system a lot of things but don’t call it free.”

The Facts on Retransmission Consent and TV Blackouts

Since 2010, millions of Americans have seen dark screens instead of their favorite channels due to at least 452 broadcaster blackouts. The number has grown rapidly in the past five years and Bonneville’s blackouts bring the total to 64 blackouts in 2015, a number on pace to break blackout records. The menace of TV blackouts continues to grow:

  • 64 blackouts so far in 2015
  • 107 blackouts in 2014
  • 127 blackouts in 2013
  • 91 blackouts in 2012
  • 51 blackouts in 2011
  • 12 blackouts in 2010

When blackouts finally end, consumers get their programming back, but at a higher cost:

  • SNL Kagan projects retrans revenue of $6.3 billion in 2015, $7.2 billion in 2016, and $10.3 billion by 2021.
  • SNL Kagan projects that over time 50% of affiliates’ retrans payments will go to the networks rather than pay for local programming.
  • SNL Kagan data shows that retrans fees are the fastest rising part of Pay TV bills

###

The American Television Alliance (ATVA) brings together an unprecedented coalition of consumer groups, cable, satellite, telephone companies, and independent programmers to raise awareness about the risk viewers face as broadcasters increasingly threaten service disruptions that would deny viewers access to the programs they and their families enjoy.

For more information about ATVA, visit our website. Follow us on Twitter @ATVAlliance.