TV station owners’ national retransmission revenues will continue to grow even as their share of the total pie is whittled away, according to a report from SNL Kagan. Total industry retrans fees could grow from $1.14 billion in 2010 to $3.61 billion in 2017, according to SNL Kagan’s projection.
Average per subscription fees for cable MSOs have the potential to more than double between 2010 and 2017, more than offsetting slower potential growth in the total number of multi-channel subscriptions due to OTT substitution and other factors, SNL says.
Retrans fees could increase 28% this year from $1.14 billion to $1.46 billion, as deals are being struck between distributors and carriers at progressively higher rates, according to SNL’s analysis. “Most of the fees are being paid by cable MSOs, which could pay more than $824 million in retrans fees this year, versus $484.2 million by DBS (Direct Broadcast Satellite) and $147.1 million for telco TV operators,” according to a press release.
Retrans fees have become increasingly vital to TV station owners, the firm’s researchers point out. Retrans revenues disclosed by public companies rose from $631 million in 2009 to $766 million in 2010. For pure-play TV station owners, the retrans revenue stream made up 52% of average cash flow in 2010, going as high as 76%.
“Overall for the industry, there is no turning back from the push for higher retrans fees, given the continued strong differential between the fees paid for certain cable networks versus what broadcast network O&O stations with significantly more viewers receive,” according to SNL.
Silly greed is going to kill this business