How Much Do You Pay for “Free” TV?

By Paul Maxwell Report Archives
Cover image for  article: How Much Do You Pay for “Free” TV?

A buck or two a month for each of the Big 4? Plus a quarter or so a month per not-so-“big” but bigger than “must carry” channel? And maybe even a nickel or so for each broadcast tag-along channel?

That’s anywhere from $48/year to $96/year for “free” networks plus a widely divergent per month figure depending upon where you might live.

That’s anywhere from $48/year to $96/year for supposedly “free” networks plus a whole lot more tacked on for non-broadcast networks.

Where does all this lead? Into bills that easily top three figures per month and a whole lot of folks looking for a way out.

But let’s get back to those broadcasters, their free spectrum and your (supposedly) free TV. You’ve heard me say it before but it bears repeating: Thanks to a little goodie called “retransmission consent” Congress gave the broadcasters an open sesame to the public purse (that is, your purse) by instituting a “heads-we-win, tails-you-lose” negotiating stance that lets broadcasters set their own price for allowing Multichannel Video Program Distributors (aka MVPDs, otherwise known as Comcast, DirecTV, Time Warner Cable, etc., etc.) to retransmit their programming. Every three years the broadcasters gleefully “renegotiate” fees for their programming and woe be unto the MVPD who tries to say no to the spiraling numbers. (Just ask any MVPD that has balked at ever higher prices only to see programming shut off and customers on the warpath.)

So, okay, you say. Maxwell has said all this before. Why’s he repeating himself?

Well, because in addition to stiffing the public into paying for “free” TV the broadcasters insist on rubbing salt into the wound by bragging, rather shamelessly, about their Congressionally-granted right to rip you off. One key example: According to TVNewsCheck, CBS CEO Les Moonves claims “projected retrans/reverse comp will exceed $1 billion next year, ahead of schedule. And while declining to make projections on much else, he said CBS is on target to exceed the $2 billion in retrans/reverse comp originally forecast for 2020.”

In another example (this time from a non-network broadcaster), Nexstar reported, “Retransmission consent revenue rose 96.5% to $80 million.”

So there you go: A whole new business model with built-in bragging rights. Who says government shouldn’t pick winners?

Random Notes

Wow!  Dr. John Malone has some folks running scared (again).  The National Association of Broadcasters and USTelecom both want Charter’s proposed acquisitions to be put on hold by the Federal Confusion Commission until broadcast ownership regulations can be revised and something can be done to limit Malone’s interests in, well, most anything media.  Meanwhile, investors get new tracking stocks (again).  One funny part involves Malone supposedly being able to control, presumably via Charter, Discovery network distributions as some who probably don’t understand the business charge.  Umm, I know John … he mostly follows the money and looks for tax benefits.  He sure doesn’t micromanage.  But he does suggest quad-play (more below).

T-Mobile’s new Binge On offering of free video streaming shows the “Uncarrier” is pretty smart about managing its network.  The 480p delivery (enough for a smartphone, I guess, but sure not high-def) won’t stress the network so much and it sure sounds good … although the rate increases weren’t ballyhooed as much as the streaming.  Nice move making nice while changing the rules.

Start the jokes … four (quad) play is up next.  T-Mobile’s move, cable’s Wi-Fi moves and multi-device apps are on the way.  The new bundle: Some linear video, landline, Internet and cellular (or, more specifically, wireless).

The new Apple TV with its apps-laden approach reminded me of the one-time pervasive noise about so-called “convergence” … the marrying (by shotgun?) of television and the computer.  Back then, at the dawn of Tech TV (remember that?), I thought convergence would amount to a lot of broken screen glass as TV and tech collided.  Not so much now … I’ll bet a very smart TV will enter the market with a specialized companion mini-tablet with full access to a much smarter navigation system.  Pretty soon, too.  Wanna make any bets on where the next generation gets moving?

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