For folks who built their business on serving the public for free, TV broadcasters sure are ramping up their work to get more money from viewers. A survey by the American Cable Association projected that retransmission consent fees will rise 88% by 2020 for its members.
Although it’s not automatic (the price of a product is not solely based on the price of its ingredients), cable companies typically pass along those fees as rate increases to their subscribers. Which means that folks who don’t get their local channels for free with an over-the-air antenna will be paying that much more for the privilege of watching those same channels delivered over a wire.
One could argue that local channels have become less valuable, not more, in recent years as viewership has declined. Yet the ACA could point to an operator who saw its retransmission payout rise from $8.53 per subscriber per month in December 2017 to $14.65 in January, a jump of almost 72%.
In a statement, ACA president and CEO Matt Polka said, “The corporate broadcasters are out of control. No other industry operates this way. No other sector would get away with such massive price increases in just three years.”
The subscriber rate hikes that these retransmission fees will cause should accelerate the move to cord-cutting, and some of those viewers might get too busy with Netflix or Amazon Prime to watch as much local TV. By raising the price, broadcasters might be hastening the day when their public service just doesn’t matter. Too many people will stop watching, and they might just take some cable systems down with them.