The Truth About Channel Negotiations
The Truth About Channel Negotiations
Programming costs are the largest component of your monthly cable bill and they are rising at a rapid pace. Some Networks are asking for increases of 100%, 200% or even higher – and often for the exact same set of channels with no new content. Our goal is to ensure we’re offering you more choice, control and value from all of the TV content you pay for each month.
Why Disputes Happen?
Wave negotiates dozens of agreements to carry local broadcast stations and cable networks each year. We look closely at every single channel on our lineup and evaluate each agreement to ensure we’re offering you more choice, control and value from all of the TV content you pay for each month. A significant portion of your TV bill goes towards the cost of Broadcast, Sports and Network TV channels. Wave pays Network or Station owners a fee per channel, per month, per customer. When contracts come to an end, we negotiate new agreements. Most of the time, you never hear about them. But sometimes, a Network or Station owner will demand a significant increase in its monthly fees for their TV programming and channels. In those cases, we believe it’s our responsibility to help protect you from excessive increases. We strive to provide the best TV choices, at a value that makes sense for you and your family.
Network and Station Fees
What costs make up your monthly TV service bill?
Your monthly TV service bill is made up of fees that come directly from the TV Networks. These fees are passed directly from the TV Networks to your monthly bill.
Why are my TV rates changing?
1. Programming Costs
All Cable and Satellite providers (TV providers) pay each Network owner (Programmer) a fee for every household that receives a particular Network – regardless of whether anyone in the household actually watches it.
These Network fees have increased dramatically at 3½ times the rate of inflation over the last 15 years. Five media companies control 90% of the Networks, and while we strive to keep these costs under control, they continue to use their power to demand more money. Programmers are securing long-term contracts with significant guaranteed Network fee increases, regardless of how many people watch.
2. Cost to Provide Service
This includes installation costs, maintaining and upgrading our network infrastructure and normal business expenses, such as employee salaries, rent and power. The bulk of this portion is used to build a better Internet and entertainment experience – including faster Internet speeds, superior reliability and more advanced services over our wholly owned, fiber-rich network.
Local TV Stations
Why is there a cost for local channels when they are free with an antennae?
A Broadcaster, such as CBS, NBC, ABC and FOX, airs their stations via public airways free over-the-air to households with antennas. But in order for TV providers to be able to carry them, broadcasters have the right to charge for their signals by law.
The result? Local stations started charging TV providers and their customers for access to local channels. Over time, these fees have increased at an unprecedented rate.
What is Retransmission Consent?
It’s a provision of the 1992 Cable Act passed by Congress. This Act requires TV providers to offer every local Broadcast station to their customers by obtaining permission, or “Retransmission Consent,” from each of the stations.
The law also states that we cannot pick and choose which stations to offer, nor can we decide to not provide a local Broadcast station.
Because PBS is funded by public and private support, they are not allowed to collect retransmission consent fees.
When TV stations don’t get TV providers to meet their demands for increased retransmission fees, they threaten viewers with blackouts to get them to complain to their TV provider, leaving you without your favorite programming indefinitely. These TV station owners may pull their channels as a negotiating tactic to improve their position to extract huge fee increases that eventually lead to increases in your bill.
Network TV Groups
Ever Wonder Why You Can’t Just Pick the Channels You Like?
Many customers would prefer to pay for only the most popular Networks and a select group of quality, special-interest ones that appeal to them. This is something that many Cable TV and Satellite providers would like to offer, but most Networks will not allow this. Unfortunately, the powerful Programmers often have the upper hand in how we can package their Networks, and in the additional Networks that they force you to pay for.
In recent years, another new trend has developed. Network or Station owners are dictating how and what networks we sell our customers, limiting your choice and control. In addition to huge fee increases, their demands include bundling their family of networks on our most popular and widely distributed TV packages.
That means you’d be forced to pay for channels you do not want and are not asking for – channels that have little or low viewership.
We’re committed to providing you the best entertainment and keeping you connected to the things that matter most to you. We want you to know that we will continue to focus on minimizing the impact of rising programming costs for our customers. You deserve the most value from every network and show you pay to watch on TV, and delivering that value is our priority.
Why Do I Pay So Much For Sports Networks?
Originally, most games were free on Broadcast TV. Then ESPN came along and carried games from all leagues for a fee. Now, many leagues, conferences and teams, including college sports, have their own Networks each with its own high fee. Some Networks offer less popular sports or low viewed games and events but demand the same high fee increases. Conferences and Regional Sports Networks account for a fast-growing portion of every TV provider’s monthly bill, and it’s happening in both small towns and big cities.
Escalating salaries of star players and coaches place large financial demands on teams and leagues who drive up programming costs to cover expenses. These costs are passed on from the networks to your TV provider and then to you.
Many teams, leagues and conferences have their own networks and charge TV providers separate, additional fees. To maximize their profits, these sports networks require TV providers to include them on basic lineups, forcing you to pay for sports programming – whether you watch or not.