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FCC Report: Cable TV Retrans Fees Jumped 63% in One Year

A new study by the FCC (pdf) indicates that the retransmission fees paid by cable companies to broadcasters jumped 63% in just one year. According to the slightly-stale FCC data, retransmission licensing fees paid by cable companies increased from $7.8 billion in 2013 to $12.7 billion in 2014, or a staggering 63.2%. These hikes are traditionally passed directly on to consumers as part of an unsustainable death spiral the cable and broadcast sector has made clear it intends to ride directly into the ground.

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According to the FCC, the monthly fee per subscriber, per broadcast channel was $1.07 in 2014, up from 75 cents in 2013 – a 43% increase.

The FCC's "Report on Cable Industry Prices" is required by law under the Satellite Television Extension Act Reauthorization (STELAR) Act of 2014. Granted like so many FCC reports the data is a bit dated, giving a picture of the TV landscape as it existed on January 1, 2015.

Still, there's some interesting bits in the report, such as the fact that prices for basic cable were 6.4% lower in competitive markets in comparison with non-competitive markets.

All told, retransmission hikes have had a sustained, negative impact on customers. Consumers not only lose access to content they pay for when cable and broadcasters feud over new contracts, but they're consistently used as PR pinatas as each side tries to get consumers to yell at the other company. But ultimately customers share the brunt of the hikes after confidential new deals are struck, and never see refunds for the inconvenience.

And while broadcasters do share the lion's share of the blame, as we've consistently noted, cable providers aren't faultless, looking for any and every opportunity to raise rates in other ways (hidden fees, hardware rental costs). It's a cycle of dysfunction that continues to drive customers to streaming video alternatives, something the cable and broadcast industry could, theoretically, help stem by actually someday seriously competing on price.


Most recommended from 51 comments


molfert
join:2002-02-19
Calgary, AB

15 recommendations

molfert

Member

First sentence wrong.

"A new study by the FCC (pdf) indicates that the retransmission fees paid by broadcasters to cable companies jumped 63% in just one year. According to the slightly-stale FCC data, retransmission licensing fees paid by cable companies increased from $7.8 billion in 2013 to $12.7 billion in 2014, or a staggering 63.2%."

It should say:

"A new study by the FCC (pdf) indicates that the retransmission fees paid to broadcasters from cable companies jumped 63% in just one year. According to the slightly-stale FCC data, retransmission licensing fees paid by cable companies increased from $7.8 billion in 2013 to $12.7 billion in 2014, or a staggering 63.2%."

Gilitar
join:2012-02-01
Mobile, AL

14 recommendations

Gilitar

Member

Cut the cord!

What TV cost now days is ridiculous! The only way to address the problem is to cut the cord.
desarollo
join:2011-10-01
Monroe, MI

11 recommendations

desarollo

Member

Get Rid of Retrans Fees

They should not be charging for what they spew into the air via the market exclusive franchise known as a broadcast license.

It is almost $7 a month on my cable bill, and for that I get access to all manner of infomercials, very poor local news and national content that duplicates what I get over the air for free. This is essentially a tying contract in that in order to get pay TV channels that are not OTA, I have to pay local stations for something I do not want and is given away for free anyway.

Dish allows me to opt out of locals, and I may take Dish up on that opportunity.

maartena
Elmo
Premium Member
join:2002-05-10
Orange, CA

7 recommendations

maartena

Premium Member

Dear TV subscribers.

Dear TV subscribers. Please prepare to bend over a little more in January 2017.* Don't spend all your Christmas bonus on presents, you are going to need it in 2017..... to pay for television.

*Also, please sit down before opening your December cable bill that announces the next price increase.

mike340t
Compu-Global Hyper-Mega Net
join:2000-12-27
Murfreesboro, TN

5 recommendations

mike340t

Member

If I could pay less and take away broadcast TV I would.

Whenever there is a feud over broadcasting fees, I simply stop watching those channels and now have gotten to the point of I no longer care for broadcast TV at all. Same happened with Yes Network, the hockey strike and numerous others that interrupted things I paid for. I simply stopped watching or caring about it.
They seem to be happily in a downward spiral however.. They're losing viewers, then raising fees to cable co's to recoup. Then losing more viewers because they're tired of the yo-yo effect and paying more ever few years, so they raise fees again to recoup. Then people start losing interest in TV altogether, so need to raise again to recoup lost money from less views... Eventually the broadcast networks will reach the bottom of that barrel that they're been spiraling towards....

mediaguy
Politically Incorrect
Premium Member
join:2014-01-22
Guitar Town
·T-Mobile
Netgear CM500
TP-Link Archer A7

5 recommendations

mediaguy

Premium Member

Fees paid by...

Edit: (Sorry, I missed Molfert's post - I need more coffee)
"A new study by the FCC (pdf) indicates that the retransmission fees paid by broadcasters to cable companies jumped 63% in just one year."

Just to note, retransmission fees are paid BY cable companies TO broadcasters, for the 'rights' to retransmit the TV station's content.

(laughable really, since in the early days of cable the local broadcasters begged - and got "must carry" rules passed - to insure they were on the cable systems to increase their audience numbers, which of course increased the value of their advertising time)

Anon821ce
@2602:100.x

3 recommendations

Anon821ce

Anon

and yet people will still blame the cable company

instead of the networks that want ever increasing fees for crap content.

Anonb87e1
@cableone.net

3 recommendations

Anonb87e1

Anon

Death spiral?

Regardless of the writer's opinion on this being a "death spiral", please keep the blame firmly placed in the camp of the broadcasters. They choose to charge more and more. As any good businessperson should know, if the cost of your raw materials increase you need to increase the price of the finished goods to maintain not only profit but to stay in business altogether. The inherent value of what broadcasters are supplying is worth less and less yet those that carry their product need to provide it in order to maintain competitive parity. This model will only collapse once the consumer decides that they really do not need what the broadcasters provide at a cost that they could get for free if they did not want the convenience.

GlennLouEarl
3 brothers, 1 gone
Premium Member
join:2002-11-17
Richmond, VA

3 recommendations

GlennLouEarl

Premium Member

The sooner they nickel and dime themselves to death,

the better.