As I usually work for the Central Florida division, I can only speculate on what's going on in NYC. I know that HBO and SHO require us to sell subscription to the package before anyone gets the HD version. I know most of you would never pay for the HBO package, if the only one you want, HBO HD, was free without it. HBO knows it too. They don't get paid unless we get paid, and we are in this as a business.
Stephen C: Sorry, but it would definitely violate confidentiality aspects, and I wasn't the guy doing the direct negotiations. Instead, let me discuss a hypothetical case.
The FCC gives local broadcasters the right to demand "must-carry" from a cable system, where the cable company has to carry the broadcaster's signal, but without compensation. The broadcaster will be paid in the form of higher advertising rates due to increase viewership, particularly when 70% of the customers get programming through cable. Without those customers, and likely without the satellite customers as well (another 15%?), the ad revenues are going to be meager indeed.
The broadcaster does not have to demand must-carry however. Perhaps the cable company needs to have that programming enough that they will agree to "compensate" the broadcaster for letting them carry it. As the broadcaster holds the local copyright to the programming, without their permission, the cable operator is out of luck. But so is the broadcaster. In my military life, we called this "Mutually Assured Destruction", and the game of brinksmanship is played here as well.
So who demands "must-carry" and who invokes "retransmission agreement"? If you're sure cable customers will scream "bloody murder" if the company drops your programming, then try retransmission agreement. If they might not even notice you're gone...then must carry. Generally, the big networks (NBC, CBS, ABC, etc) go retransmission agreement, independents go must carry.
As some local broadcasters are owned by mega-conglomerates (i.e. Meridith, Clear Channel, etc.), we sometimes get handed "national" deals worked out by out Corporate folks up North. Others we have to negotiate locally. Generally, each type of programming (analog, digital, etc) requires its own permission, sometimes in one deal, or in separate deals.
Any number of things can get wrapped up in a deal, and this is lawyer territory for certain. I'm not sure if the network allows the locals to "sell" the programming, but they can demand compensation in other forms. We buy a lot of local advertising -- they may require we spend a certain amount with them. They may demand a certain amount of advertising on our systems at free or preferred rates. Any number of technical issues can get wrapped in. Who pays what costs to get the signal to the head end?
These things can be easy, or they can get really ugly. A few years back, TWC and ABC (read: Disney) got into a huge public "pissing contest" over a retransmission agreement in NYC. Without knowing any of the real details, it's obvious that ABC wanted more from us than we were willing to give, possibly to avoid setting a precedent our other systems would have to follow. Public accusations try to make the other guy the bad guy, but both parties lose.
Does that help?
