Independent cable operators are bracing for retransmission-consent conflicts with CBS, which last week said its TV stations deserve license fees similar to those USA Network receives.
The American Cable Association, the small-operator trade group, was predicting problems following remarks made by Viacom Inc. co-chief operating officer Leslie Moonves.
“We are going to get paid in the future for our signal,” Moonves said at an investors’ conference last week. “The telephone companies are starting to talk to us about these sorts of deals. We have considered it one of the great injustices for many years that we don’t get paid for our signals.”
OTHER CHARGES, TOO
CBS will not only seek cash for retransmission consent of its stations, it also plans to get paid for a handful of multicast channels and for on-demand content supplied to distributors, according to Moonves.
“This is just further evidence of the fact that they’re going to be bold with their demands,” ACA CEO Matt Polka said in response to Moonves’s presentation.
CBS aims to launch a CBS 2 channel in all its markets that would offer news, sports and local content, such as weather and traffic conditions, by fall 2006 or early 2007, Moonves said.
In the next few years, he said, a “CBS 3, 4 and 5” can be expected as well.
Viacom will spin off CBS and its MTV Networks cable assets as separate companies next year. But with a host of multicast services in the works, Polka predicted CBS will try to leverage retransmission consent to get them launched.
“You can’t teach an old dog new tricks,” Polka said. “CBS is going to play the same game that Viacom has played for years, of retransmission consent for tying and bundling.”
SMALL OP PACTS EXPIRE
CBS’s major retransmission consent deals don’t expire for four or five years, but some pacts with smaller operators are expected to end this year.
Moonves expressed frustration that a cable network like USA — which still runs some older off-network CBS shows — gets paid license fees from distributors, while CBS isn’t compensated by those same distributors.
“You want the NFL, you want Survivor, you want CSI, you want David Letterman, you are going to have to pay us what you pay USA for. You should pay us something,” Moonves said. “That’s part of our game plan and we think were going to be able to do it.”
Some ACA member pay license fees of 60 cents a month for USA, according to Polka, who added that if CBS wants similar compensation, “that’s a significant payment.”