Comcast seeks NBC-U [Telecom]

This thread got me thinking about something. > > Local television stations are hurting financially. Much like > newspapers their ad revenue is down. There are more advertising > boulevards out there and TV has to compete against more > businesses for fewer dollars. Local stations also have to > compete against cable and satellite channels for eyeballs. How > soon will be before an NBC or CBS decides they're going > cable/satellite/Internet only and allow local affiliates to < die?

I don't think it's at all likely. Broadcasters may be having a rough time these days, but a television broadcast license is still a valuable property.

Furthermore, broadcasters enjoy significant government-mandated advantages over non-broadcast programmers:

- Broadcasters enjoy mandatory carriage on cable/telco/satellite retailers within their local markets. If a broadcast licensee can't negotiate a retransmission consent agreement with a c/t/s retailer, it can fall back on must-carry. If it's in such severe financial stress that can't make it even with must-carry, it would probably just go off the air. But it's highly unlikely that whatever programming it had been carrying would be so valuable that it could charge c/t/s retailers more than it could charge when it had the must-carry fallback option.

We hear a lot about how popular networks like ESPN can demand huge license fees from retailers. But few non-broadcast programmers have that kind of market power. For every ESPN, there's a dozen ESPN wannabes that never make it.

- Network affiliate broadcast stations have exclusive access to network programming within local markets. The entire country is divided into Designated Market Areas (DMA). Within its DMA, every network-affiliate station is the exclusive vendor for the network programming. Cable/telco/satellite retailers are required, by federal law, to obtain network programming from the affiliate within the DMA, and they are prohibited from obtaining the identical programming from any affiliate of the same network in any other DMA.

In any other industry, this arrangement would be a called a monopoly. But in the case of the broadcast industry, it's called "consumer protection."

These same issues were discussed here in June when I started a thread "Cable TV Broadcast Retransmission Consent Feuds 'Ease Up'." See

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Follow the link to

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and scroll down to my comment "Response to Julius Powell.'

As for internet carriage, I think that's even less likely unless copyright laws are extensively revised. As I've noted here before,

*radio* broadcast stations that stream their own signals have to pay substantially more for internet copyright than they pay for broadcast copyright for the identical programming.
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AFAIK, no TV station currently streams its signals. But I doubt that copyright liability would be any less onerous for TV than it is for radio.

And that, of course, assumes that some future internet is capable of vastly faster transmission speeds than the one we've got now.

Neal McLain aka Texas Cable Guy

***** Moderator's Note *****

Neal, no offense, but I think you're missing something.

Your argument assumes that local TV station are still needed, and that's not the case. As it stands now, local TV executives are on the same dead-end road as the record executives of yesterday: their influence comes from their position astride a distribution bottleneck which has been greatly diminished and will soon disappear.

Local television transmission is going to go away: the only question is how long it will take. The new Digital TV standard was a gift to the cable/satellite/etc industry: it's not usable for over-the-air transmission, and those like me who used to rely on rabbit ears will have to either put up expensive outdoor antennas or put up the money to rent a pipe from Comcrap et al. Even if (as you said) 30% of consumers still use rabbit ears, that percentage - and the consumers who it measures - will quickly fade to a marginal factor, both because those whose antennas come down in ice storms will be looking to their elected officials for cheaper solutions, and because the current generation of children is so used to having cable TV that they won't accept the limits of over-the-air reception. Either way, the local stations lose: their bottleneck will be ineffective as a source of profit and political influence within my son's lifetime.

We could debate the time line, but I think the endpoint is certain. This is the almost the same thing that happened to radio broadcasting, although in the case of radio it was the distribution channel which caused the change: program delivery via satellites obviated the need for local employees, and most radio programs now come from a "Jock in the box" in Cleveland (or wherever). Although radio still requires local transmitters, the lesson is the same: economies of scale *will* doom local TV stations.

You heard it here first[tm].

Bill Horne Moderator

P.S. This _is_ telecom related: Shannon was right, and Ma Bell's bottleneck is _also_ going to go away. It's just a question of when: just ask yourself what happens when satellite phones cost as much as cell phones.

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Neal McLain
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KFOR, the NBC outlet in Oklahoma City, announces at the beginning of every news program "We are streaming our program worldwife."

Wes Leatherock

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I'm not sure I agree.

In a sense, much of local TV broadcasting has always been 'out of the box', that is, coming from the network. Things like national news and documentaries, daytime soaps, prime time viewing, and Saturday mornings all come the network and always did. Much of the rest of broadcasting comes from syndicated sources.

Local TV stations do very little of their own programming; and almost all that they do do is very cheap stuff.

One thing money is spent on is local news and sports--because--local news and sports makes good money.

I don't think television advertising has been hit the way newspapers have been by the Internet. The 'net has hit very specific things such as classified ads which TV never did carry. The local ads carried by TV stations are for both local businesses and local outlets of national chains (banks, drugstores, department stores, fast food, cars, etc.) While the recession has temporarily dried that up, it's not permanent.

AFAIK, local television stations are rather profitable.

***** Moderator's Note *****

In his famous "Vast wasteland" speech, Newton Minow said that broadcasters had a "license to print money", and you're correct that TV stations in major markets are profitable.

That, however, is not my point.

However profitable TV stations are, they are also serving as middlemen in between the content producers and the public. As I said, they are enjoying control of a bottleneck which I think will disappear.

The networks and the syndicators all have access to satellites, and every TV distribution system operator does too. Sooner or later, those men will realize that the price isn't right anymore: they're paying for a local delivery service that they don't need.

Someone always wants more, and the network brass - never the brightest bulbs in the studio, to be sure - will realize that they can distribute their programs to something like 80% of their current audience without paying local stations "carry" fees. The few viewers that they might lose by bypassing local TV stations aren't enough of a factor to stop this change, and IMNSHO, local TV will fade away.

Yes, there will be various rear-guard actions that will delay the inevitable, but the artificial barriers will give way to a more efficient distribution model, and the Negroponte Switch will be complete.

Bill Horne Moderator

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KXAN in Austin offers their nightly newscast as audio and video podcasts. But I think the original poster was speaking of streaming the regular broadcast schedule, including prime time shows.


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