Dauman: Higher Fees Could Squeeze Smaller Nets

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Viacom CEO Philippe Dauman said the ability of larger cable channels and broadcasters to gain bigger and bigger increases in affiliate and retransmission consent fees could force distributors to drop smaller networks.
Dauman's comments at the Nomura Securities U.S. Media Summit conference in New York Thursday echoed those of CBS CEO Les Moonves earlier in the day. Moonves had said that as retransmission consent fees rise for broadcasters like himself - CBS has predicted it would attract as much as $1 billion in retrans and reverse compensation fees within five years - smaller channels could face extinction.
Dauman agreed, but added that smaller niche networks that are part of a larger programming entity - like Viacom's MTV Networks - will be able to survive.
"What you don't see is independent networks coming in," Dauman said. "Distributors are not receptive to new networks ideas coming from an independent person. They used to layer on additional networks like that and money. That's no longer there. Those independent networks that don't have an audience that cares about them may get dropped. Some of the increases happen one year when you get retrans and then they normalize. Maybe there will be margin pressures on the distribution side. I don't know. Each situation is different."
Dauman said that the key to winning affiliate fee increase is providing value.
"We're not a big driver of the cost," Dauman said. "We represent a small portion of the overall cost [of programming]."