Originally Posted by Aleron Ives
This is quite a stretch. Do you really think that people would be willing to buy the equivalent of five different cable boxes to receive OTA from the major networks? I don't. While it's true that the OTA networks have the right to encrypt their HD signals, they have to carefully consider how such moves would affect their business model. OTA has to survive on advertising, and it doesn't help you reach more viewers by restricting your content. It makes viewership worse, rather than better, so they have an incentive not
to adopt the encryption options. Those standards have been sitting around for more than a decade with only one minor network even trying to use them, and I doubt any others will try it soon, either. I'd be interested to see what the subscribership is to AirBox, because I doubt it's very impressive. What with standards set to come out that will supercede the current HD standards, the major networks would be pretty foolish to return to SD broadcasts OTA.
You have to remember that the networks are now owned by large corporations. Using Disney Corp as an example, when Disney bought ABC Networks they took Monday Night Football off the network and put it on the cable/sat channel ESPN and made more money. The reason why is that there is about 70 million homes that have cable and an additional 40 million that have satellite and the current price that all these subscribers pay is about $4.58/month. ESPN is the most expensive cable/sat channel with TNT coming in second at about $1.10/month per subscriber. Fox News Corps regional sports channels are right behind TNT in monthly cost. This is why cable and satellite fees are rising so quickly.
Right now Disney and Fox News Corp are activley discussing either ending the affiliate relationship and making them pay a monthly fee or ending broadcasting completely and moving all their programming to the cable/sat channels. Just for verification there is about 125-130 million homes in the US and about 110 million homes have a cable/sat subscription. That leaves only 10 to 15 million homes that are empty, have no tv service, or are using antenna for tv. As you can see broadcast tv is not a big market.
Another move that Disney made just this week is they are now going to move their first run movies from Starz to Netflix starting in 2016. "So if you want to see the new Star Wars movie after it comes out of the theaters you will have to have a Netflix subscription and a device that can stream Netflix in order to see any new Disney content.
Also Disney Corp waived must carry for WABC and went with a retransmission contract with the cable providers in New York city. Disney is now getting about 75 cents a month per cable subscriber. The satellite customers are paying about a dollar a month per broadcast station.
Now on the local level in my market, Wilkes Barre/Scranton, we have been cursed with Nexstar Corp which is ran by Perry Sook. He has managed to get control of two broadcast stations, WBRE NBC and WYOU CBS, a decade or so ago. In 2006 Sook decided that he was going to forgo must carry and go for retransmission agreements for all the stations Nexstar owned in the US. The broadcast industry at that time said he was committing suicide but he persisted and manged to get every cable company to start paying for all his stations. What he did here was starting in october of 2006 there would be a message that would scroll across you screen that at midnight january 1st your cable system will no longer carry these two stations and if you want to continue veiwing these stations you can get Direct TV or Dish. This was a stroke of genius on Sooks part because he was getting a dollar a month for each station with the sat providers. My cable company capitulated and made a deal for 25 cents for both stations per month. Those that panicked and jumped to satellite ended up paying $1.75/month more. After this he then gutted the news division and advertising division of both stations and is just running a skeleton crew as he is making more money on the retransmission agreements than he was getting in the traditional way. After this he then ended the local news broadcast on WYOU and just shows the local WBRE news on both stations. Then a couple of years ago he got the FCC to agree that the VHF signal was strong enough that he didn't need translators any more. The FCC agreed and he then shutdown all the translators and then tore them down so they can not be replaced. Since this region is all mountains and valleys with the most of the communities located in the valleys, the antenna users lost the signal to Nexstars two stations and then had to get either a cable or sat subscription. Those that complained to the FCC got no response. Somebody said that they heard the Nexstar CEO refer to antenna users as freeloaders which explains Nexstars actions.
Then the Fox affiliate in my DMA, which is owned by New Age Media LLC, has sucessfully sued my cable company three times to remove all the out of market fox affiliates from their line ups and also went for retransmission agreements with the cable providers and is currently getting about .85 cents per month for Fox, MyNetwork, and The CW. They also used a little used thing called Syndex on my cable company where they claim syndication rights to certain shows in this DMA. Any other station that has these shows and does not have syndication rights to broadcast those shows, my cable company must blackout those shows on those channels. They claimed syndication rights to Seinfeld in this market so now only TBS can show Seinfeld as they have syndication rights from Sony to show Seinfeld. Every other provider that shows Seinfeld in this DMA is blacked out on my cable system.
I you think about how much free money that Disney gets from homes that have cable/sat and do not watch ESPN or other Disney owned channels then you will begin to understand why these content owners no longer care about veiwers and ratings. I think the final goal for the content owners is to get people to watch content directly from the content owners and pay what ever the price they are asking. I can see in the future that a person will have to pay the same price of a ticket to watch the Super Bowl in their home through an internet connection coming directly from the NFL servers.
As for the government, they are making more money from leasing out the TV broadcast spectrum to cell phone providers so I do not see any governmental agency caring about all this either. As the old saying goes Money Talks and BS Walks.