Two Networks Hint at Leaving the Airwaves | Hacker News Reader

Two Networks Hint at Leaving the Airwaves

nytimes.com

46 pointsnlh13 comments

It's frustrating (and yet slightly satisfying) to read stuff like this. Watching an outdated business model face the reality of the modern era and sputter and spit in an attempt to keep its old revenue streams intact.

My first thought was "Why do they care? The ads are getting re-transmitted - if anything, they should be happy about getting a wider audience!" but deeper in the article is the key:

"The threat is specifically aimed at retransmission fees, which have become a crucial second source of revenue for stations as ad losses mount."

The broadcast networks have managed to get lucky in that they've found an alternative revenue stream to make up for their failing business model (ads). The problem is that alternative revenue stream isn't a consumer-driven product, it's a "forced" license fee. And now someone has figured out how to get around that fee, so it's hurting the broadcast networks.

Honestly, the move to cable is a natural one and it probably makes sense. Cable operators are willing to pay a per-subscriber fee to the networks, and consumers (in their decisions to subscribe to cable tv) are willing to pay for content. And as HBO / Showtime / etc. have shown, it _is_ possible to build a business without advertising if your content is good enough.

Back in 2001/2002, in the Bay Area, I remember when whoever it was that broadcasts the West Wing (NBC?) got into some snippet with whoever was my satellite vendor (Dish? Direct TV) was - and I could no longer get any of the NBC channels on my Satellite Dish. So, not only is there some fee structure, obviously it's high enough that the Satellite Provider I had refused to pay for it.

Aero completely bypasses that model, and I can see all sorts of other businesses coming into this space (now that Aero has done the hard work of establishing this as legal in the courts) - I can see why Fox/NBC/CBS etc... feel very, very threatened.

Honestly, I just don't understand any of it. What are retransmission fees? Who's paying them to whom? And what's wrong with receiving broadcast TV on antennas? Isn't that what something like 30% of US population still doing (no cable)?

Anyone feels like supplying some broad context?

In order to broadcast on a frequency in an area, you need an FCC license to do so. This is usually acquired by private sale approved by the FCC.

Once you have that license, you can require the cable companies serving that area to redistribute your channel -- in which case you don't get paid. OR, you can forbid them from carrying your channel, or you can negotiate a deal. That deal is a retransmission fee, and is based on the assumption that having the channel is worth something to the cable company.

If most of your content is from a national franchise (ABC, NBC, CBS, Fox, whatever TBS turned into and Univision), your remaining content -- local news -- is the entirety of your value to the cable companies. The national content can be negotiated with the parent franchise, either by carrying a remote station or by carrying a national feed like Fox News.

About 60% of US households have cable subscriptions. That's more than 60% of the population.

Cable itself is dying (or at least stagnating) as well. Overall new subscriptions to cable/satellite are essentially zero [1]. To the extent providers are getting new customers, they are mostly coming from a competitor.

People are less and less inclined to plan their schedules around broadcast content. They want to watch what they choose, when it's convenient. Cable doesn't really offer that any better than over-the-air broadcasting.

1: http://hosted.ap.org/dynamic/stories/U/US_ZERO_TV?SITE=AP...

Totally agreed. TiVo and the like are a partial fix, but I know >0 people recently who have totally nuked their cable subscriptions and gone 100% Netflix/iTunes/torrents (the latter of which is worth a whole conversation in and of itself). The only reason I even bother with a cable sub these days is access to live news (MSNBC, etc.) and the increasingly minuscule amount of content I can't get online.

Cable's days are numbered. It may be a big number since there a ways to go before streaming adoption really picks up, but they are numbered nonetheless.

This is a political gambit; the idea that "free over-the-air television" is some massive public good still has power as the rationale for FCC airwave-rationing and censorship.

But the content available through that coarse ad-subsidized broadcast model is less impressive than ever, and the Fox and Univision TV frequencies would probably provide more public benefit as 'super-wifi' open internetworking.

They knew what they were getting into... I say, let 'em crash.

100%. However, socialized TV will never go away.

Politicians will gladly force TV subsidy, because its literally the platform that gets them elected.

All of those useless PSA "Now you know..." Gov funded TV-spots are exactly that: Mini handouts / free cash.

Meanwhile, mainstream news will get softer and softer on their political benefactors.

These broadcasters who don't want to be broadcasters are shooting themselves in the foot with this move. If regional cable monopolies no longer have to carry these channels for free, they'll do so for a hefty fee. Any benefit these networks hope to gain from destroying Aereo will be clawed back by the cable companies they're selling their souls to.

https://en.wikipedia.org/wiki/Must-carry

OK, let them stop broadcasting. Then let's take all the radio spectrum we use for broadcast TV and repurpose it for unlicensed wireless networks. We were going to do that with whitespace a while back.

https://news.ycombinator.com/item?id=5513545

Does Aereo stream advertisements as well as the program or do they store it and let you fast forward? If they stream ads, shouldn't this work in the networks' favor?

Now if Fox will leave cable and the net as well, that would be nice.

Reply on news.ycombinator.com