OK, so that no-holds-barred cage match between Mediacom’s Rocco Commisso and Sinclair Broadcasting’s David Smith never happened. (Maybe MTV2 can give us a claymation version during an episode of Celebrity Deathmatch). But while the last-minute deal late last week may have saved thousands of TV viewers from a tinfoil-rabbit-ears Super Bowl experience, it also raised tough questions for the cable industry.
Here’s the new reality: Network-affiliated TV stations and muscled affiliate groups are just getting medieval on cable’s collective posterior when it comes to these retrans deals. You gotta wonder why the federal government continues to treat the broadcast industry like some kind of sacred cow, without which we would all collapse from withdrawal. God forbid that our favorite “news team” could no longer inform us nightly of murders, stabbings and other uplifting community affairs. Because—let’s face it—with the exception of local “news,” a broadcast network affiliate is exactly like any other programmer, albeit targeting a much broader audience than the typical cable net.
Now before my pals at the NAB call to educate me about broadcasters’ unique contributions to Truth, Justice and the American Way, let me clarify that I’m not talking about the little guys who rely on must-carry to survive. Some of them serve small market niches that otherwise wouldn’t get served. Others, well… they really don’t serve any purpose other than to inform 12 Ukrainian-American viewers about the latest Borscht-preparation techniques… but all of that’s an entirely separate issue for another day.
When I talk about this power shift, I’m talking about retransmission consent—and that means the big network affiliates. Cable nets are stealing their advertisers and viewers. For them, hitting up cable operators for more money seems like the perfect solution. With the exclusive local rights to hit shows like ABC’s Lost and Grey’s Anatomy, Fox’s 24 and House, NBC’s Heroes and CBS’s CSI (all 800 of them), TV station owners know they are valuable content aggregators. They want to get paid.
That would all be well and good if network-affiliated broadcasters simply wanted to be treated like any other valuable programmer seeking sizable license fees. That’s just a marketplace negotiation. But unlike big programmers, these very profitable TV stations seek protections from the government because… oh yeah… that whole “preserving free over-the-air broadcasting” thing.
Of course, with the vast majority of people now watching “free” TV through either cable or satellite rather than a terrestrial antenna, those big broadcast stations aren’t really “free” anymore—especially when they are demanding license fees that just get passed right through to subscribers (CableFAX columnist Steve Effros refers to this concept as “Fee TV.” Part two of his excellent series on this subject will be in Thursday’s CableFAX).
In this new world, consumers are basically paying for that free, over-the-air broadcasting the same way they’re paying for ESPN or Discovery or MTV. And like it or not, that will only become even more of a reality in the future.
This is only going to get worse for cable. American Cable Association president/CEO Matt Polka warned that Sinclair’s gambit is really just a harbinger of things to come. “With more than 100 million viewers receiving their broadcast signals under retransmission consent laws, this is the beginning of a long-predicted crisis for America consumers,” he said. “Until Congress fixes this problem for the benefit of all consumers, there will be no solution.”
Cable may have little choice but to pay up in many situations, but it also has the opportunity to work toward next-generation deals that… sit down for this, please… could actually create win-wins for both sides. OH, THE BLASPHEMY!! I know, I know… but consider this: How about partnerships related to broadband or even mobile video? Or even—dare we say—partnerships on producing local news programming, including broadband and mobile components?
Why not feature news clips from local broadcasters on cable Web portals, even letting subs download their favorite local news segments to cable-branded mobile devices? Wouldn’t that be easier on consumers who must now try to search out local news content by perusing each stations’ convoluted Web sites? This can all work with—not against—cable’s burgeoning regional news operations in major metro clusters. Sure, there are licensing and ad-revenue issues to work out. So what? WORK THEM OUT! With the quad-play, cable has enormous leverage here and should use it.
Commisso valiantly fought Sinclair, but at the end of the day, even a tough street fighter like him was unable to stomach the idea of his customers missing the Super Bowl. Who could blame him? He cares about his customers, dammit! Could it be that the best way forward is for cable operators and big TV stations to sit down and figure out ways to make money together—rather than ways to beat each other up? I know the tensions are high, but there’s gotta be a way to make this work… anyone… anyone?
Coming together will become even tougher as both sides jockey for position during the digital transition. But I seem to recall a phrase that entered the pop-culture lexicon around the time all this must-carry/retransmission consent stuff got started: “Can’t we all just get along?”