Originally Posted by Dan in St. Louis
I would suggest that an equally valid argument is that the locals should pay the satellite to present their ads to a wider audience. Are ad rates not based on eyeballs? More eyeballs, the local can charge more for ads?
If that's a valid argument, then why didn't that happen back at the turn of the century, when satellite companies were allowed for the first time to carry local stations?
Hmmmm... The only explanation I can come up with is that the people who ran DirecTV and DISH then were just flat-out stupid. After all, they willingly paid for something that you think they should have been paid for taking off the hands of the local stations.
No, the fact is that satellite television subscriber numbers and profits took off like a rocket ship once DISH Network and DirecTV were allowed to pay for the privilege of carrying local stations. I don't know of any better illustration of the value of the content that local stations control. Obviously the people running the satellite TV companies recognized that value and how it could help to catapult their businesses to the next level.
And at that very moment, cable TV executives had to have heard the sound of the other shoe dropping. I don't know -- maybe they actually believed that the cost of carrying those stations would put the satellite guys out of business. Whatever, they completely dropped the ball and never even tried to pick it up. I mean, they could have completely avoided the current drama years ago by including off-air analog and/or digital tuners in all their cable set-tops.
But then, that's not how monopolists think -- they don't need to adapt, because they believe market will ultimately bend to their will.
The key problem underlying the ongoing dispute between local stations and cable companies is the fact that the market for local station distribution has been distorted by government regulation -- regulation that no doubt had good intentions way back when and may even have been necessary in the early days of cable television. But look at how screwed up things are now -- satellite willingly pays for local station carriage, while cable, the primary competition of the sat TV industry, goes running to the government for relief when they're asked to do the same.
And your solution is that local stations should pay satellite? I don't get it, but I give you mucho points for way-outside-the-box thinking.