COMMENTARY

Not Just OTT Ad Dollars, TV Stations Want Higher FCC-Regulated Carriage Fees

• by Wayne Friedman , Staff Writer, June 2, 2021

Gray Television, a major TV station group, wants new OTT streaming platforms that carry local TV stations -- and will in the future -- to pay the same rate that cable, satellite, telco, and virtual pay TV providers do.

It has filed a document with the FCC asking it to consider OTT platforms as traditional MVPDs. That means they have to negotiate "retransmission consent" with individual stations. This includes Hulu, YouTube TV, Roku, Amazon Fire TV, among others.

And you know what this really hints at: Larger carriage fees -- the ones TV stations are desperately need to show big-time financial growth.

In an FCC document, a former FCC commissioner, now Gray lawyer, said ABC, CBS, Fox and NBC negotiates current OTT agreements and then offers them to stations at rates "far lower than the stations receive for traditional MVPD retransmission consent,” according to report in Broadcasting & Cable.

Right now, Roku, Amazon Fire TV, Samsung TV Plus and others aren’t FCC regulated. So guess what? They can essentially pay what they like — or not.

This goes hand-in-hand with TV stations that complain Facebook isn’t paying much to TV stations for linking news content to TV station websites. By making these new streaming/OTT MVPD regulated, TV stations can be assured of big revenues to come.

The backdrop: Traditional pay TV providers keep losing ground in the traditional MVPD world. Cord-cutting subscriber declines now regularly hit 7% per year. That means less money to TV stations.

At present, things aren’t down. But they aren’t spiking, either. S&P Global says retransmission fees inched up 2% to $12.17 billion in 2020 from $11.89 billion.

We know local TV stations are continuing to pursue other businesses -- OTT ad sales platforms selling locally/regionally based streamers, direct digital media ad revenue, and possibly, digital media competitive businesses, coming from the new ATSC 3.0 standard.

High-profile TV business news content is all about streaming -- not an area TV stations want to miss. With OTT ad sales platform units, TV station see ways to leverage their linear, local TV viewing with new streaming viewers, virtually all younger than traditional TV viewers, who are around 60.

Of course, the longer-term question is: Should TV stations get what they want, will those younger viewers find content on TV stations they want, via those streaming app platforms? And if it isn't local TV news content, what then?