ott revenueDon’t expect a slow down in rising retransmission fees for local broadcast TV signals. U.S. TV station owners can expect much more revenue from the practice in the coming years, according to the latest forecast from SNL Kagan. Increases in per-month subscription fees and industry consolidation will fuel growth in TV station owners’ industry retrans fees, which will rise from $3.3 billion this year to $7.6 billion in 2019, SNL Kagan predicts.

Combined with other content fee hikes, retrans fees are helping fuel increases in subscription TV rates. Service providers are increasingly adding line items to subscriber bills to cover rising rentrans fees. Both AT&T and Comcast, among others, have now instituted “broadcast tv fee” line items on some subscriber bills.

“The environment has improved for TV station owners,” SNL Kagan states in a press release. The market research company revised its previous year forecast of $6.05 billion in industry retrans fees for 2018 to $7.15 billion, highlighting that TV station owners “have increasingly obtained rates they believe are closer to the value they bring to multichannel video services.”

Negotiating digital rights has made for a more complex retransmission fee negotiating process, “ SNL Kagan notes, “with terms associated with distribution by the multichannel operator often more complicated to agree upon than the per-subscriber fee. Affiliate groups must secure the rights to grant digital and second-screen distribution from their network partners when renegotiating their affiliation agreements, and there is not yet a cohesive industry approach.”

SNL Kagan revised its overall industry retrans fee forecast upward despite projections of a decline in TV station owners’ multichannel subscription fees. In last year’s forecast, the market research company projected multichannel subscriber numbers would increase from 100.4 million in 2011 to 103.7 million in 2018. That’s been revised downward to 100.6 million in 2018 in this update.

SNL also updated its forecast for TV station owners’ reverse retrans fee projections from affiliate and O&O (Owned and Operated) stations back to their network partners. Affiliate reverse retrans fund flows back to the networks “could increase from $1.02 billion in 2014 to $2.25 billion in 2019.” These payments will increase to account for “50% of affiliates’ retrans payments over time, even as affiliates’ monthly fees increase in the coming years.”

Join the Conversation

3 thoughts on “No End in Sight for Retransmission Fee Increases, Projected to Reach $7.6 Billion

  1. i like how some folks from the ACA call these broadcasters…they are really cashcasters because all they care about now is cash from retrans. the actual programming stinks and ratings are down, yet they keep raising their price

  2. This is why our company has made the decision to no longer carry any off-air channels when our current agreements expire. No more. Signals are available for free via antenna, just like we pick up those signals, we aren't doing anything to them, just relaying them to our customersr, we are doing nothing to them that we should be forced to pay for. So we are biting the bullet, it may kill us, but we make most of our profit on internet service anyway, so if we end up only being an internet service provider, so be it.

Leave a Reply

Your email address will not be published. Required fields are marked *

Don’t Miss Any of Our Content

What’s happening with broadband and why is it important? Find out by subscribing to Telecompetitor’s newsletter today.

You have Successfully Subscribed!