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  • Writer's pictureRobert Eckelman

local TV stations urge the FCC to reclassify streaming services as cable TV & here we go again


local TV stations urge the FCC to reclassify streaming services as cable TV & here we go again
local TV stations urge the FCC to reclassify streaming services as cable TV & here we go again

This may be gaining traction. Time will tell. Up front disclosure, this is about retransmission fees where I have some knowledge but I am certainly not an expert. I am also not against retransmission fees but do think they need to be reviewed carefully. Ultimately retransmission fees do cost viewers more money.


In July of 2018 local TV stations across the country formed the coalition for local news. This is a group of stations are insisting the FCC to reclassify local streaming services as cable companies. It doesn't seem like much to the average onlooker. I have more knowledge than most but fall very short of a full understanding. I am not against retransmission fees but do think they need to be looked at carefully.


Ultimately this fight is about retransmission fees. Unbeknownst to the average television and cable viewer television stations pick up a huge amount of their revenue from retransmission fees. According to some Google searches retransmission fees can make up over 40% of a broadcast company's annual revenue https://cnb.cx/3SZei6n


Here is the here we go again port, reclassification would lead to price hikes for YouTube TV Hulu FUBU, and more https://bit.ly/3QYpMFt


Local stations say there is a loophole in streaming laws. That does seem true. Cable companies and satellite providers must negotiate directly with local broadcasters. Streaming does not have to, they go over and around (OTT) local broadcasters and negotiate at the network level. This does cut local stations or at least leaves them with little leverage. Without the ability to negotiate directly with streaming services, local broadcasters cannot obtain the compensation necessary for them to sustain their substantial investments in local news.


I would have to agree local stations deserve a percentage of revenue as people view their product and it does cost a lot of money to produce. This is just my opinion I do think as local stations cut staff and add more news the overall quality has diminished substantially.


Here are a few questions

How many local news stations does a market need? Look at news ratings, most deliver less than a 1 in key demos. I really don't think any market needs more than 2 or 3 local news broadcasts at most.


How much retransmission fees/revenue should this cost? This really means cost to the local consumer because this will be passed on.


I am not downplaying the importance of local news in a market. It is completely important. Keep in mind there are several ways stations can distribute local news and consumers can consume local news. It is really like anything else find your market and figure out how much to charge before consumers look elsewhere.


I am trying to learn more and I will share. I am absolutely not against retransmission but I think the entire equation needs to be looked at in totality.

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