What Is Your TV Station Worth To Your Viewers?
Posted on Fri, Jan 08, 2010 @ 03:25 PM
Sinclair and Mediacom have reached a one-year retransmission agreement that will keep KGAN and KFXA - here in our backyard - and 20 other TV stations in 14 markets - on the Mediacom cable systems. As local viewers, it's good news for us and our neighbors.
But this is a battle that's far from over, and not becau.jpg)
se it's just a one-year deal. The industry is working hard to set a value on service it offers to viewers, yet we have not yet discovered how much viewers actually value that service. There's a whole mess of stuff that's going to happen over the next few years that will shape the new economics of local television.
It hasn't been long that TV stations have realized they can get cable companies to pay for their product. Companies like Sinclair continue to push to find just how much a local TV channel is worth. But the networks have sniffed the scent of money; ABC says it wants as much as half of its affiliates' retrans revenue. Cable operator Comcast, assuming its purchase of NBC goes through, says its' going to set a new standard for retransmission compensation. So now local TV stations, just having found this stash of cash, are already having their pockets picked.
Meanwhile, cable companies are going to have to find just what customers are willing to pay. How high can rates go to make up for these new payments? Will they have to start offering channels ala carte so people can afford their cable service?
It's going to reach a point where the channels that are most valuable to viewers will be the ones to survive. How much do you think your signal is worth to your viewers? What can you do to make sure your programming is something they'll pay for? And don't count long-term on what the networks feed you - they may not be there forever. The future of local TV is all about providing value.
These retransmission consent disputes are the beginning of a new landscape in the industry. But there is one assurance we can offer. Make your product valuable to your viewers, and you'll have a future. Many other programmers, channels, and stations won't make the cut.
- John Altenbern