: Re: Aereo Update: And the Question is . . . [telecom]

> Never mind that: the broadcaster owns a compilation copyright on their > broadcast output -- syndicated programs, network programs, local > programs, *and* commercials integrated into a single product -- and > that would be sufficient to deny Aereo the use of the signals if Aereo > is found to be engaged in "public performance". (I don't know if ABC > actually made a claim for compilation copyright in the lower courts; > if not, they forfeited that particular issue on appeal, but have other > grounds as Neal rightly notes.) >

I guess I am at a loss to really understand some of this.

It the olden days, TV stations made their money by selling advertising time. And, they still do seem to carry plenty of advertisements! It was my understanding the more viewers they had, the more they would be able to charge for an advertising spot.

To increase their viewing audience, stations spend a lot of money running as much power as the FCC will allow, with huge towers to make sure their signal reaches everyone within their coverage area. In some areas they may install translators to fill in dead spot, and all this costs money. The reason they do that is to service as many households they can -- and hence charge the advertisers as much as they can.

On the other side of the coin, since they are using a public resource

-- the frequency slice they have licensed to them, I think the FCC still mandates they offer at least one signal that viewers can receive without paying any direct charges.

Now, when a service provider, like a cable company or satellite company, picks up that broadcast and makes it available to their customers, that is a case of "one hand washing the other". That signal makes the TV signal available to the customers of the service

-- and therefore more attractive. But, on the other hand, it also makes the broadcast signal available to more viewers -- and hence increases the price that can be charged to the advertisers.

If a TV station is allowed to charge a cable company to retransmit their signal -- that charge isn't paid by the cable company, but rather is passed on to the cable company customer. Who are we kidding? The consumer always pays in the end.

Take a look at how many local stations are carried on your cable system. Multiply that by the charge being paid by the cable company back to the TV station. I'm not sure just how much that is -- but if the TV station is charging a dollar per month for every subscriber -- that ends up a tax on every subscriber for the potential ability to watch that station. And, that is whether or not the end viewer ever wants to watch a particular station.

It would seem to me that any time a TV station can get someone to help distribute their signal to more viewers, they should be paying (not charging) for that service.

...Bob

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Reply to
Bob K
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True, if the station sells the ads itself. In the case of network programming carried by affiliate stations, the network sells the advertising and pays the station "compensation" for carrying its programming, advertising included. The compensation is tied to the station's viewership.

Indeed they do.

Yes, assuming that the "one signal" you're referring to is the off-air broadcast signal that the station transmits.

That's a double-edged sward. Yes, it does increase the audience, but it doesn't necessarily increase the value of the advertising. If, say, Chicago's WGN-TV carries advertising for jewelry stores and car dealerships, these advertisers may not want to pay extra to reach cable subscribers in, say, Springfield or Madison. Meanwhile, the owners of jewelry stores and car dealerships in Springfield and Madison resent the competition. And you can be sure that they will complain to their representatives in Congress.

Back before the advent of satellite video distribution (ca 1975), cable TV operators *had* to carry WGN-TV and other distant independent stations in order to have something to sell. If they just carried the local stations (supplemented by public/educational/ government access channels and whatever they could produce themselves) they wouldn't sell many subscriptions. And that's not a hypothetical statement -- I lived through those days.

You're d*** right.

I retired in 2000, so I no longer have access to accurate information about retransmission-consent fees. But from what I hear, the fees currently range from $1.00 to $3.00 per station sub per month, and they keep going up every three years when retrans agreements come up for renewal.

This, of course, puts the station in the ultimate sweet spot. It gets paid compensation by its affiliated network and it gets paid retrans fees by the cable and sat companies.

Note that each station can elect either "retransmission-consent" or "must-carry". If a station elects retrans, it can charge whatever the market will bear, and it can require the cable/sat company to carry (and pay for) co-owned non-broadcast programming. Example: Disney owns the ABC Television Network, several ABC affiliate stations, and numerous non-broadcast channels including 80% of ESPN. So it can force the cable company to carry ESPN as a condition for granting retrans consent for the ABC station. Again relying on what I hear, ESPN currently costs around 5.00/month/sub.

If the station elects must-carry, the station must carry the station, but no money changes hands. Typically, smaller less popular stations elect must carry while the big guys elect retrans consent.

I'm sure every cable TV and satellite TV company in the country (with one notable exception) would agree with that. The exception is Comcast, which owns the NBC network and several NBC stations. Apparently it makes more money charging itself than it costs to pay itself.

This whole retrans-consent/must-carry procedure is legal under the grotesquely-named "Cable Television Consumer Protection and Competition Act of 1992." If you don't like it, don't complain to your cable company. Complain to your elected representatives in Congress.

Neal McLain Retired cable guy

Reply to
Neal McLain

Wrong way around. Stations have had to pay the networks for affiliation deals for about a decade now. KNTV (11 San Jose)'s deal to take NBC away from long-time affiliate KRON (4 San Francisco) was the first major-market deal structured this way, but all the networks are doing it this way now.

The smaller (unwatched) networks are generally barter deals; some may even offer token compensation.

-GAWollman

Reply to
Garrett Wollman

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