# Local Stations to Pay for Network Shows



## phrelin (Jan 18, 2007)

Along with the ability to deliver more programming because of DTV, Media Watch reports that local network affiliates are suddenly confronted with this:


> AFTER DECADES OF NETWORKS PAYING affiliates to run their programming, networks now want a completely opposite equation, one where stations send checks to networks.
> 
> Station executives are up in arms....


See also NBC Affiliates Prepare to Swallow Bitter Reverse-Compensation Pill. So what is broadcast TV going to look like in 2015?


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## Nick (Apr 23, 2002)

In the end, all costs are borne by the consumer -- in the end. :shrug:


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## Kansas Zephyr (Jun 30, 2007)

Nick said:


> In the end, all costs are borne by the consumer -- in the end. :shrug:


But you still get it free with an antenna.

You only choose to pay for local TV if you wish to have it delivered by a third party.


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## HD AV (Nov 22, 2006)

Nothing new here. S O S, Pure Corporate GREED at the expense of the affiliates and the public. Yes, it's expensive to produce good quality programming, but think of the $$$$$$ charged for advertising and the revenue generated for the networks. Sports programming wanting too much money.....Let the networks tell them to find another market. Supply and demand, no takers, contract prices drop really quickly, and maybe some of these extraordinarily overpaid athletes would make a million or 2 a year instead of 10 or more. 
Stations have to have the quality programming for their viewers to attract local market commercials and the resulting revenue for the stations. Do the networks care if smaller stations go under.....Not as long as THEY are making money!


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## paulman182 (Aug 4, 2006)

Kansas Zephyr said:


> But you still get it free with an antenna.
> 
> You only choose to pay for local TV if you wish to have it delivered by a third party.


Yes, I could "choose" to run 1500 feet of feedline to a hilltop and install a tower with a mast-mounted pre-amp like my family had 40 years ago, but I "choose" to have it delivered by a third party.

You make it sound like we're stupid to pay for it.


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## Scott in FL (Mar 18, 2008)

I would suspect that free tv will go the same way free radio went: to subscription services that you must pay for. Radio became more and more mediocre with too much repetition, DJs in distant cities on 5 or 10 different radio stations by voice tracking, too many commercials. People got sick of it and started paying for Sirius and XM.

My guess is TV will go the same way. Except for sports, the Olympics, maybe some news programs, TV already stinks (I mean really, how many more reality programs can we handle? We get them shoved down our throat because they're cheap to produce.). And people will start tuning away. We're already cutting out commercials with our DVRs and playing on the internet instead of watching another episode of America's Greatest Dogs.

My guess is pay TV is coming.


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## Cholly (Mar 22, 2004)

Scott in FL said:


> I would suspect that free tv will go the same way free radio went: to subscription services that you must pay for.
> ...
> My guess is pay TV is coming.


It's already here on cable and satellite in the form of "premium services" and specials in addition to video on demand. As far as the airwaves are concerned, they're free as far as the listener/viewer is concerned. If local stations are compelled to pay for network programs, they will have to insert local commercials during breaks. They already do this on shows where the net hasn't sold commercial time targeted for their specific broadcast area.


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## Scott in FL (Mar 18, 2008)

Oh, I agree. There will always be free OTA tv. I'm just saying that the quality of its programs will continue to decline because of limited advertising revenue, fewer people will watch, and there will be additional services springing up that we can choose to pay for. It might be in the form of additional premium services, or somebody might start something completely new. Just like Sirius and XM: there is still free over the air radio, but fewer people are listening.

Local stations get their revenue during network "avails" as you pointed out, plus during local programs like news and syndicated shows. But the advertising dollar is shrinking and will continue to do so. Local stations are not going to fork over money to the networks without a fight. The locals are really hurting, especially in medium and smaller markets. Less viewers, less advertising money, lousier programs, less viewers...


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## ziggy29 (Nov 18, 2004)

Our local NBC affiliate is owned by LIN. They are so greedy and tightfisted that they'd probably drop NBC affiliation before they'd pay the network.


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## n3ntj (Dec 18, 2006)

Wow.. this info sure makes it sound like OTA network TV will be a bit different down the road. Maybe in 10 years, things will be like they were back in the 1950s when local stations picked and chose and some stations had programming from CBS and NBC, or from NBC and Mutual, etc.

Maybe we'll start to see a bidding process for local stations to bid on what network programs, from all of the major networks, they want to broadcast. We may see some 'former' NBC stations now showing some NBC, some ABC, some CBS, and maybe some CW programs.

I didn't know Fox and CW already had this reverse program. Interesting... especially now that the local stations are having to pay for the digital conversion as well.


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## Kansas Zephyr (Jun 30, 2007)

paulman182 said:


> Yes, I could "choose" to run 1500 feet of feedline to a hilltop and install a tower with a mast-mounted pre-amp like my family had 40 years ago, but I "choose" to have it delivered by a third party.
> 
> You make it sound like we're stupid to pay for it.


No.

There is/was no such implication. However, you did choose to live in an area that made third party delivery a necessity.

My point was that local stations now have even less revenue, and yet still must provide a free OTA product.

When you add the effect of the ever expanding universe of channels, the Internet, and other methods to deliver advertising, local TV stations very existence are being threatened.

So much for local content/programing/news then, huh?


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## Nick (Apr 23, 2002)

If you want "free" tv, you're going to have to pay for it -- one way or the other!


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## scooper (Apr 22, 2002)

If the networks expect the affiliates to pay for it - the quality better go up. I for one don't watch any reality shows.


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## n3ntj (Dec 18, 2006)

Neither do I.


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## SamC (Jan 20, 2003)

Fortnightly was rightly decided, and Congress mucked it up. Local TV should be free, OTA or via a "third party".

Stations are just going to charge cable and DBS, and thus you and me.


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## Kansas Zephyr (Jun 30, 2007)

SamC said:


> Fortnightly was rightly decided, and Congress mucked it up. Local TV should be free, OTA or via a "third party".


Why would it be fair for a third party to profit by charging per household, sell commercial insertion, and dilute the local TV station's audience, and advertising pool, and not compensate the local stations for using their product to do so?

If you want it for free, live where you can put up an antenna and get it. Otherwise, pay. Just like you do for ESPN and everything else on cable and DBS.


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## SamC (Jan 20, 2003)

How silly.

As the Supreme Court rightly decided in Fortnightly, some people live where they can receive signal from those using the PUBLIC'S airwaves as a PUBLIC trustee, and others do not. So a cable company (and in today's world, DBS) provides a service of a community antenna. 

The underlaying program (which does not have "commercial insertion" and which INCREASES the local station's audience, not "dilutes" it was produced for FREE distribution. The local stations, and the networks, with a government granted monopoly use of public property, have already made their money via commercials.

That was the system from the birth of TV until 1990. It worked.


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## Jim5506 (Jun 7, 2004)

Networks better watch out.

Third party productions may well undercut their price and popularity and networks will then have no outlet for products.

This may be the last gasp of a dieing dinosoar.


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## phrelin (Jan 18, 2007)

Jim5506 said:


> Networks better watch out.
> 
> Third party productions may well undercut their price and popularity and networks will then have no outlet for products.
> 
> This may be the last gasp of a dieing dinosoar.


The issue is to identify the dinosaur. From the standpoint of someone who has no access to OTA, East and West HD feeds of ABC, CBS, Fox, NBC, MyNetwork, and PBS (12 channels) seems so much more logical that literally having satellite and cable deal with hundreds of local stations.


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## GaryPotter (Apr 12, 2008)

phrelin said:


> The issue is to identify the dinosaur. From the standpoint of someone who has no access to OTA, East and West HD feeds of ABC, CBS, Fox, NBC, MyNetwork, and PBS (12 channels) seems so much more logical that literally having satellite and cable deal with hundreds of local stations.


That's how it was for a while back in the early days of C-band. However, people seem obsessed with always having access to their local news and local programs, even though as has been said, the quality of those have all declined drastically, so what's the point?


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## Kansas Zephyr (Jun 30, 2007)

SamC said:


> How silly.
> 
> As the Supreme Court rightly decided in Fortnightly, some people live where they can receive signal from those using the PUBLIC'S airwaves as a PUBLIC trustee, and others do not. So a cable company (and in today's world, DBS) provides a service of a community antenna.
> 
> ...


Silly?

If cable and satellite providers were still simply "community antenna" systems, only passing OTA signals to those areas that can not receive OTA via antenna, then you would be correct.

But that is no longer the case.

Cable and DBS do allow the local stations to be seen in a larger area, true. But, they also serve the area that can get OTA via antenna. Therefore you dilute the potential audience because the customer has >200 channels, rather than <6.

Remember, what a local station can charge for commercials is based on the potential viewership. If some people are watching other channels, they are forced to ask for less.

Also, just because the cable/DBS commercial insertion doesn't occur on the local channels themselves, they are still going after the same pot of money for advertising. Again, driving down the cost.

Some cable companies, Time-Warner for example, in some markets have launched cable-only 24 hour local news channels. Again, directly competing for viewers eyes, and advertisers dollars.

These are all to the detrimental to the local broadcaster.

Since cable and DBS have changed the game, the FCC rightly called them competitors. Forcing them to reach agreements with local broadcasters, just like they do with every other channel they deliver into your home.

As you say the public airways belong to the public, and are free to consume. So, if you want it free, then get it from the air. If a group decides to develop a community antenna system, that simply passes only OTA into homes, they would be exempt from a retransmission agreement.


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## SamC (Jan 20, 2003)

That is a silly. Cable/DBS dilute by providing choice, so people should pay for free TV. Do you really belive that, or are you just trolling?

Local TV should be free for all. All cable and DBS do is provide a community antenna, for which local stations deserve nothing.


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## phrelin (Jan 18, 2007)

I'm of the opinion that broadcast TV is a 1950's technology. Local stations now have the ability to broadcast up to four digital signals each on "our" airwaves. Let them figure out how to survive without protection from the FCC. Right now its a big deal to get your locals. But without the network programming - morning, daytime, primetime and late night - perhaps they could figure something out to make themselves interesting other than buying old shows from the dusty vaults of media companies such as MGM. This is one of the cases where through development of content creating demand could determine the economic viability of the business.


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## Greg Bimson (May 5, 2003)

SamC said:


> That is a silly. Cable/DBS dilute by providing choice, so people should pay for free TV. Do you really belive that, or are you just trolling?
> 
> Local TV should be free for all. All cable and DBS do is provide a community antenna, for which local stations deserve nothing.


Then play it backwards:

If cable TV is a "community antenna", why should there be any other channels on it? It ceases to be a "community antenna" and becomes a "private distribution hub" when more than just the local channels are on it.

Which is why Congress created the Cable Act of 1990. Even though you assign the belief that local channels are free, a study in the late 1980's found that *more than half of cable subscribers, when asked if their cable company no longer carried local channels, expected their bill to be at least halved.* The public assigned a staggering value to the free local channels obtained through their cable company. Yet somehow, it should be the right of any distributor to rebroadcast a local station, _ad infinitum_?


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## Kansas Zephyr (Jun 30, 2007)

SamC said:


> That is a silly. Cable/DBS dilute by providing choice, so people should pay for free TV. Do you really belive that, or are you just trolling?
> 
> Local TV should be free for all. All cable and DBS do is provide a community antenna, for which local stations deserve nothing.


So, Cable/DBS can make money, do harm to the local broadcaster, and get to use their product for free, too?

Who sounds silly, now?

Like I said, if there is a CATV only operation, then they wouldn't need to pay the local stations.

But, when you start selling commercials, create programming, and add other channels from outside the local market, cable/sat becomes a competitor. Not a simple "public service" distributor of OTA channels.

I can see the difference. So, did the FCC.

I like having local news, and weather, here in tornado alley. Feel free to google around and see if some local stations have closed newsrooms as cash flow suffers. The squeeze upon local TV is real.


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## lee635 (Apr 17, 2002)

Yeah, yeah. About 20 years ago, the movie houses overbuilt, then went through an austerity period. During the internet boom, companies laid so much fiber that to this day, some of it still sits unused by anyone. Same thing with over the air television. 

In my day we had ABC, CBS, NBC, and PBS. They signed off around midnight and that was it. With the fox network, the netlets, foreign language, low power and independent stations, plus multicasting with digital television, there are simply too many broadcast channels chasing too few eyeballs. 

And anyone who wants to bemoan the poor quality of today's tv need only look at the crappy sitcoms from the 80's - low quality tv has been plentiful for a long time. Somehow, we always forget the crap as things age. And I think that this year's Olympics coverage is just outstanding.

Look for some consolidation and yes, look for some stations to go dark. But any talk of broadcast tv going the way of the bellhop is very very premature.


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## Kansas Zephyr (Jun 30, 2007)

lee635 said:


> Look for some consolidation and yes, look for some stations to go dark. But any talk of broadcast tv going the way of the bellhop is very very premature.


+1

I don't disagree, especially in the larger markets, where even a much smaller piece of the local ad pie will keep most afloat. A few newsrooms may evaporate.

(There is no longer a news department at the ABC affiliate in St. Louis, for example.)

But, in small markets, there is the real potential to lose all local TV news.


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## Davenlr (Sep 16, 2006)

If I had to guess, it will eventually end up like newspapers... one or two per market (local news on tv).

Now you have, in my market, a 5pm, 6pm and 10pm news. All the first one consists of are teasers to watch the second. The second tells you if you want more on the story, tune is to broadcast at 10. Then at 10, the tell you for the whole story, log on their website...

So, no information, no loss. I find myself just checking headlines on the website, and not even watching the newscast. 

except for severe weather, I can pretty much do my own weather forcast by looking at the radar for the region.


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## scooper (Apr 22, 2002)

My stations that do news do better than that - 5,5:30, 6, 10, and 11 - and ALL of them are full stories. Their earlier day coverage is also pretty good - if I get up in time to see it. One annoying thing they do is recycle the same story for about a day's cycle of the news, then bring in the next one.


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