NEW YORK — The notion that multichannel-video distributors might create an Aereo-like service isn’t likely to disrupt the growth of retransmission-consent payments, according to a panel of broadcasters.
“I’m not concerned about Aereo having an impact on retransmission during anyone’s investing or planning horizon,” John Hane, a communications lawyer at Pilsbury Winthrop Shaw Pittman, said on a panel at the “TV on Wall Street” event here.
Even if Aereo’s service for transmitting broadcast signals over the Internet is ruled to be legal, Hane said, cable and satellite distributors are not set up to distribute programming that way. “I don’t see this as something viable,” he said.
Perry Sook, CEO of Nexstar Broadcasting Group, said that while he would defend against Aereo if it entered one of the markets in which he owns a station, he’s not overly concerned about it.
“What is the total number of subscribers?” he asked. “There may be more people in this room than Aereo subscribers. We spend a lot of time talking about them with analysts and reporters, but internally we spend no time worrying about it.”
The growing stream of retransmission revenue has revitalized broadcast, Sook said. But he said a disparity remains between “what we’re being paid as part of the cable package versus what we’re worth,” based on viewership. In the average market, stations account for about 35% of viewing, but get only 5% of what cable networks get. He projected monthly fees of $4 to $5 per subscriber.
Hane said negotiations are not based on viewership. Instead they’re based on a calculation of how many viewers the cable operator would lose if they blacked out the stations.
Some of that retrans revenue gets to be shared with networks, which are now getting reverse compensation from stations. While negotiations between stations and networks may get testy, the relationship is stable right now, according to Sook.
“I don’t think the networks are interested in having a bankrupt affiliate group,” he said.
Jon Lafayette is business editor of B&C.