The retransmission battles between content owners and pay-TV providers typically get covered in two ways. There’s the angle about how consumers might miss an important football game because of corporate bickering, and the one about about how higher programming fees are translating into higher cable bills. What doesn’t get covered as often is why retransmission fights are getting nastier by the day. According to analyst Rich Greenfield in a Bloomberg report, we’ve already had five TV blackouts this year affecting about 19 million subscribers as a result of licensing disagreements; the highest number in a decade. And at least part of the reason for this, in my analysis, is the growth of TV on the Internet.
Producing television is expensive. Cable has done so well because it’s created predictable revenue for a large number of studios to develop content. Unfortunately, the same awesome disruption that is bringing us things like Hulu and Google TV is also making content owners and distributors increasingly skittish. Content owners want more money from pay-TV operators because they’re worried about losing cash from consumers who are spending more time online. And pay-TV operators want to pay less money because their TV subscription numbers are headed south. In other words, since there’s very little money to be made from free TV on the web, the studios and content providers are arguing more ferociously to make up the difference. According to the same Bloomberg report, programming fees have gone up about ten percent in the last year, while cable bills have increased around eight percent according to SNL Kagan.
I’ve always said there’s no free lunch when it comes to TV. We’ll either pay for it in higher cable bills or pay for it through new online subscriptions. But at least we’re getting new features now – like mobile access and more on-demand content. It’s progress. With some mud-slinging along the way.