Kagan: Retrans fees to hit $7.6B by 2019
Pay TV distributors will have to shell out $7.6 billion to local broadcasters to package their stations in basic cable programming packages, SNL Kagan said in a report released Friday.
That means retransmission-consent fees paid to ABC, CBS, NBC, Fox and other station groups will jump by 130 percent compared to the projected $3.3 billion broadcasters are expected to collect this year.
One of the most striking items in the report is that Kagan has reduced its projections for pay TV subscriber growth over the next five years by more than 3 million subscribers. Last year, Kagan said it expected the U.S. pay TV universe to grow from 100.4 million at the end of 2011 to 103.7 million in 2018. The market research firm said it now expects pay TV distributors will count a total of only 100.6 million subscribers in five years.
In addition to collecting retrans fees, the Big Four broadcast networks have grown revenue in recent years by demanding that Sinclair Broadcast, Tribune and other TV station group owners that air their programming on affiliated stations pay them a cut of fees they collect from cable operators, telcos and satellite TV providers. Kagan said it expects reverse retrans fees to reach $2.25 billion in 2019, up from a projection of $1.02 billion in 2014.
The Kagan report doesn't mention the impact Aereo could have on retransmission-consent. Some pay TV distributors have said Aereo, which doesn't pay retrans fees, could give them leverage in their negotiations with broadcasters.
Fox, NBC, ABC and other broadcasters filed a petition at the U.S. Supreme Court in October aimed at forcing Aereo to shut down its service, which offers access to about 20 local TV stations in New York, Atlanta, Denver and several other markets.
- see the release
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