On last Friday’s radioshow, former WCIA news director Ken Schreiner and I talked about how TV station owners like Nexstar (WCIA’s owner) and Sinclair are trying to suck money out of every stream they can find. These midsize owners leveraged the hell out of themselves in order to buy up stations, and currently aren’t turning profits.
Nexstar has been pushing cable companies to pay cash in exchange for the right to carry its stations, even resorting to pulling all its stations of a Joplin, MO system for nearly all 2005. Up until very recently, cable companies usually entered into quid pro quo agreements with stations, such as buying up empty ad time — the cash thing is new, and represents the hardball tactics that Nexstar is leading the way with since ad dollars aren’t cutting it.
These hardball tactics are becoming more pervasive in satellite carriage agreements, too, and bringing the game to other, more liquid, owners like Hearst-Argyle.
Broadcasting and Cable reports on an ongoing dispute between Hearst Corp. and Dish Network over carriage rates for the Lifetime network — Lifetime wants more per subscriber and Dish doesn’t want to ante up. Not coincidentally, Dish just agreed to pay out big bucks for the rights to carry Hearst-Argyle’s broadcast stations.
Hearst Corp. owns a controlling stake in Hearst-Argyle, and in the past the deal was that satellite and cable companies paid a premium for Lifetime in order to get access to the broadcast channels. But now those deals are turning around, as it turns out the local broadcast stations are more valuable to Dish than networks like Lifetime. That’s despite the fact that Lifetime is the #1 cable channel amongst women, and groups like the National Coalition Against Domestic Violence have been protesting Dish’s dropping the channel.
The rest is that while cable, satellite and TV stations play an increasingly higher stakes game of chicken, subscribers are being deprived of channels they’re used to getting — sometimes for a few weeks, sometimes for nearly a year.
Losing a few television channels isn’t tragic, but it does up-end the normal expectation of service for cable and satellite subscribers. It’s more important when it comes to local channels. For all of the faults of local TV news, sometimes it’s one of the only reliable sources of local information, especially during times of severe weather or emergencies. And many households subscribe to cable or satellite because they can’t get good over-the-air reception. I don’t want to overstate the impact, but it is neverthless true that many people really do depend on their local TV stations.
Yet, the quality of local news and information continues to spiral downward because of the decline in profits. Consolidation is one of the main contributing factors in all of this, since companies like Nexstar and Sinclair blew wads of cash buying stations to add to their empire, strip mining the staff and resources of the local stations to fund the shopping spree, similar to what Clear Channel did to local radio.
Underneath, we see the broadcast TV industry struggling with declining viewers and profits, desperate to wring a buck with short terms strategies rather than investing in better facilities and local service. Even cost-cutting measures are being cut. For instance, Sinclair’s NewsCentral program, which replaces local news with a national broadcast containing a short local news segment, has been scaled back from 60 to 30 minutes on several stations, and eliminated altogether in others.
It’s no accident that Congress had to mandate a final switchover date for digital TV — a lot of stations have only reluctantly made the investments necessary to start digital broadcasts and would really rather not have to make them in the first place.
The final irony is that now the TV broadcasters are making a big deal out of the digital TV with their MyFreeHDTV campaign, touting the supposedly great high-definition programming you’ll get from them without paying a dime. But how much more can they supply when most can barely cobble together a useful newcast?
Moreover, the only reason broadcasters got on board with digital TV is because it allows them to shoehorn more channels into their space — more channels of reruns and infomercials. Of course, all those extra channels reduce their ability to offer real high definition programming.
And how free is it? If you have cable or satellite it won’t be free, you can bet it will cost you more. If you’re one of the early adopters who went back to roof-top antennas to get over-the-air HDTV, or you’ve never had cable or satellite, sure it’ll be free for you, if it’s worth even that price.
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