If pay-tv companies like Direct TV, Dish, and Comcast have not felt the raft of the broadcasters, they will soon.
This is a little dramatic, but sooner or later, cable networks may be seeing higher increases in content fees. Why? Because according to a Wall Street Journal article, broadcast networks have been relying on cable networks as a source of income for so long, that there is a fear that the networks might be increasing its profits.
The problem is that if cable networks have to keep paying high retransmission fees to broadcast networks, then there only source of revenue is going to keep decreasing. Especially since the cable networks are not seeing a high increase in subscriptions.
I am really interested to see how this will impact the industry later on.
Looks like Aereo has complete faith that broadcast networks like Fox and CBS will not pull its broadcast signals off the air.
The startup company is confident that the networks will stay on the air because of the billions of dollars in ad revenue the networks will be giving up. Apparently, broadcast advertising undermines cable advertising because the audiences are bigger. Also, the idea of broadcast moving to cable is a move that would have to be approved by Congress.
So why would the broadcast networks want to pull its programming off the air? Simply because of Aereo.
Just a refresher, Aereo is a startup company that shows live streaming of shows online. The problem is that the company is not paying the retransmission fees other TV providers are paying. So it is virtually stealing programing and playing it online without the broadcasters permission. Currently the issue is in court.
CBS came to the defense of the statement Aereo made about losing billions in ad revenue saying,
“’More than 85 percent of our viewers already receive their signal from a pay-TV service, Ender said yesterday in an e- mailed response to Kanojia’s remarks. ‘CBS could serve the remaining 15 percent in a variety of legitimate ways. We don’t believe it’s going to come to that in any event.’”
At first I thought the broadcast networks may have been bluffing, but I think that the networks are just feed up. The idea of a startup winning one over on the networks is just a crazy thought. I have no doubt in what these broadcast companies can do or will do, but I don’t believe it will get that far. The companies are really going to have to go through many obstacles to have the chance to switch to cable, especially being that the networks are a vital importance to our society today in entertaining and informing viewers at a next to nothing cost for people without cable.