NAB Fires Back At ACA Over Retransmission Consent
Broadcast Group Points To Study Showing Fees Are Just Small Percentage Of Ops' Costs
John Eggerton -- Multichannel News, 5/8/2009 1:56:24 PM
The National Association of Broadcasters Friday said the American Cable Association's assertion that cable subscription rates have risen due to "excessively large" retranmission-consent fee gains by broadcasters is way off base.
NAB cited a study it commissioned that concluded that programming costs were only a small percentage of cable operators' expenses.
The study found that cable operator profits had risen by five times as much as their programming expenses, from $48.96 per sub per month in 2003 to $62.99 in 2006, an increase of $14.03 or 29%. By comparison, the study found that over the same period, programming expenses per subscriber per month increased from $15.63 to $18.47, an increase of $2.84 per subscriber per month or just 18%.
"With cable's profits rising five times as much as their programming expenses, it is absolutely illogical to claim that retransmission consent plays a significant role in the continued escalation of cable subscription rates," said NAB executive vice president Dennis Wharton in a statement.
ACA president and CEO Matt Polka took aim at the source of the study info -- the large cable companies.
"The ‘study' is based on data that the NAB collected from four large publicly traded cable operators that each serve many millions of customers," Polka said in response. "Because no ACA member was included in the portion of the NAB study that compared programming costs to profits, it's an irrelevant response to ACA's May 7 release that documented excessively large retransmission-consent gains by several local TV station groups."
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Boo Hoo NAB - nice try. MCN - terrible reporting - shame on you. Here are some facts to ponder: 1) Cable makes very little profit from their video product - don't confuse operators with networks. 2) Broadcasters - through Retransmission Consent - account for 45-50% of annual programming cost increases - this for 5 networks (tops) while the remaining percentage increase is spread across some 200 other network (cable)services. 3) The American taxpayer whom also subscribes to cable is caught in 'double jeopardy' by broadcasters - first - the taxpayer provided broadcasters with the use of airwaves for FREE in exchange for minimal educational and EAS fulfillment - why then should they also pay for getting NBC/CBS/FOX/ABC via a cable company? Why should the taxpayer supplement a failed business strategy? The reality is the American taxpayer has been bailing out broadcasters for years - enough is enough.
Quigley Spargus - 5/11/2009 11:57:46 AM EDT -
MCN should issue a retraction, because these numbers can't be right. Cable operators do *not* make $62.99 of profit per subscriber. Perhaps the NAB or the reporter on this story doesn't know the difference between revenue and profit -- News Flash -- they are not the same thing. Average *revenue* per subscriber may very well have risen from $48.96 to $62.99 over the period described, because operators do indeed raise prices to keep up with programming costs and other operating expenses. Anyone who believes *profit* per subscriber is averages $62.99 per month knows nothing about the economics of the cable business.
Skeptic - 5/11/2009 10:08:53 AM EDT
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