A couple weeks ago, while I was off cavorting in New Orleans with my new wife, Morgan Wick wrote this piece taking note of the fact that some broadcast TV stations might decide to surrender their spectrum to wireless companies rather than continue operations, and those stations that do stay in business might end up sending out weaker signal.
Pretty much any station that’s not an affiliate of a Big Four network is liable to put up their stations at [the broadcast incentive] auction [next March], because they’re not programming anything that’s worth people’s attention at the moment. Those stations that survive could end up terminally crippled by a variable band-plan that could subject many stations to interference from wireless carriers and a landscape that could make it impossible for new stations to start up if anyone decides some of the stations that shut down or consolidated shouldn’t have.
With pay TV subscriptions continuing to decline — research firm MoffettNathanson reported that 357,000 more households dropped pay TV in the 3rd quarter of 2015 — the notion that broadcast TV stations would intentionally degrade their signal seems counter-intuitive. If anything, the rise in cord cutting (and the related increase in TV antenna sales) would suggest that over-the-air TV has more potential than ever to be a major player in the medium.
The catch here, of course, is who owns the broadcast TV networks. Lest we forget, the same corporations that own the major networks also own a huge swath of pay TV channels. Let’s refer to an updated version of the list I originally posted here:
1.) The Walt Disney Company
Sports channels: ESPN, ESPN2, ESPNU, ESPNEWS, ESPN Classic, SEC Network
Broadcast network: ABC
Other channels: ABC Family, Disney Channel, Disney Junior, Disney XD, 50% of A+E Networks (A&E, History Channel, Biography Channel, Lifetime, etc.)
2.) 21st Century Fox
Sports channels: Fox Sports 1, Fox Sports 2, Fox Soccer Plus, Regional Fox Sports Nets
Broadcast network: Fox
Other channels: FX, FXX, FX Movie Channel, Fox News, Fox Business, Fox Classics, National Geographic Channel, Nat Geo Wild
Sports channels: NBC Sports Network, Golf Channel
Broadcast network: NBC
Other channels: Bravo, Chiller, Cloo, CNBC, E!, G4, MSNBC, Oxygen, Syfy, USA Network
4.) Time Warner
Sports channels: TNT, TBS
Broadcast network: The CW (50%)
Other channels: HBO, CNN, HLN, TNT, TBS, TruTV, Turner Classic Movies, Cartoon Network, Boomerang, Adult Swim
5.) CBS Corporation
Sports channels: CBS Sports Network
Broadcast network: CBS, The CW (50%)
Other channels: TV Guide Network, Showtime, Smithsonian Channel
The problem, as it continues to be, is one of media consolidation. You might have hundreds of channels in your pay TV subscription, but only a handful of big media companies own all those channels, and big media wants all of their channels to get paid — including the broadcast channels — regardless of who’s watching what.
Consider also that broadcast networks collect retransmission consent fees from pay TV carriers — fees which are, in practice, not unlike the carriage fees cable networks collect. Those fees are rising sharply, too. The Wall Street Journal reported a while back that networks are targeting a combined $1 billion in retransmission fees by 2017. Some pay TV carriers have added a “broadcast TV fee” to your bill to help cover those fees.
Perhaps this is another reason why big media fought so hard to shut down Aereo, even after Aereo offered to pay the retransmission fees. Big media stood to lose much more if Aereo survived, because all the cable channels they owned would take a huge hit.
What’s more, some big media companies might be using the degradations and complications of broadcast TV to drive cord cutters to their own online services. Lest we forget, three of the five corporations listed above also own Hulu, one of the top players in online streaming — including Comcast, which continues to slap “data usage plans” on customers (oh, but please don’t call them data caps) in a ham-handed attempt to keep people paying for all the NBC Universal cable channels they own. CBS, meanwhile, has not only moved Showtime online, but it’s also announced that its new Star Trek series will only be available on CBS All Access, its $6/month online service.
Perhaps big media believes there’s more money in online services than in broadcast. That said, letting its most prominent outlet wither on the vine while cable subscriptions continue to drop seems foolish, especially when the ad market for top programs (i.e., sports) seems as strong as ever. Now seems to be the time to make OTA TV more accessible to people, rather than less. With so many cable channels under their umbrellas, though, big media seems intent on riding the pay TV horse into the ground before it adjusts. Perhaps they’re all convinced the tipping point is further off than it really is.