Local stations push FCC to let vMVPDs pay them directly
Local TV station groups are petitioning the FCC to reclassify virtual MVPDs (vMVPDs) as traditional cable operators, which would allow them to directly negotiate retransmission fees with vMVPDs instead of through broadcast networks. This change, if implemented, aims to increase revenue for local stations, which currently claim that network-negotiated agreements for streaming rights are too low. The FCC Chair Jessica Rosenworcel has stated that the FCC lacks the authority to make this change, deferring to Congress.
Key Takeaways
- Station groups want vMVPDs such as YouTube TV, Hulu + Live TV, Sling TV, and Fubo treated like cable operators under the 1992 Cable Act.
- Current vMVPD carriage talks run through broadcast networks, while traditional MVPD deals involve local station group owners.
- BIA says local TV stations will collect $14.3 billion in retransmission fees in 2024, rising to $15.6 billion by 2027.
- The American Television Alliance counted more than 200 blackouts in 2023, including a six-week DirecTV-Tegna standoff that affected about 5 million subscribers.
- Leichtman Research Group says vMVPDs have 13.4 million subscribers, with YouTube TV at 8 million and growing.
Why It Matters
If the FCC accepted the station groups’ request, local affiliates would gain a direct path to negotiate with vMVPDs rather than leaving those deals to CBS-Paramount, ABC-Disney, and NBC-Comcast. That would reshape who captures retransmission revenue in streaming bundles and could pressure the economics of skinny bundles that have marketed lower monthly prices. The article also shows how much money is already at stake: BIA pegs local station retransmission fees at $14.3 billion in 2024. Watch whether Congress takes up any change to the Communications Act, since Rosenworcel says the FCC cannot do it on its own.
Read full article at forbes.com