At its meeting at NAB, the group decides it needs to do something to fight the migration of programming — especially sports — from broadcasting to cable. It is devising legislative language to attach to the SHVERA bill, planning a grassroots campaign and offering $30,000 in prizes to the stations that can come up with the best PSAs for the campaign.
Everybody is saying that TV broadcasters are going to have to be more aggressive and seize whatever opportunities present themselves if they expect to come out whole on the other side of this painful downturn.
Most are trying, prospecting for new business as never before and, within tightening budgets, exploring the news businesses on the Web and mobile platforms.
In that spirit, the Fox affiliates at their meeting at the NAB convention earlier this week decided to take the can-do attitude into the realm of public policy.
Unsure about the effectiveness of the NAB and even whether the association fully represents their interests anymore, the affiliates came up with their own legislative agenda and a grassroots campaign to back it up.
Like all other red-blooded TV broadcasters, the Fox affiliates are going to do their bit to make sure so-called market mod legislation doesn’t become law.
As an attachment to the SHVERA bill, the measure would take away affiliates’ exclusive right to network programming within their markets and undermine their ability to wrest retrans fees from cable and satellite operators. What’s not to hate about that?
But the Fox affiliates want to go further. They want to attach their own rider to SHVERA. It would slow the migration of top sports and entertainment programming to cable by making it tougher for big cable networks (mostly ESPN) to jack up the carriage fees they charge satellite and cable operators.
“Program migration is the No.1 issue that is either going to save the broadcasting business or represent the last nail in its coffin,” says John Tupper, the chairman of the Fox affiliate board who is leading the charge. “Our legislation will stem the tide of migration and give us a fighting chance.”
The Fox affiliates are highly motivated. They are still smarting from the Fox network’s loss of the major college bowl game starting in 2010 to ESPN. Fox didn’t come close to ESPN’s bid.
The affiliates approach to stemming migration is rather convoluted.
Here’s the language of their legislation as Tupper read it to me:
“A program network supplier distributing its network for a price per subscriber in excess of 80 cents per subscriber to a multichannel video distributor may not, as a condition of subscription, withhold access or charge rates based in whole or in part on multiple network placement or channel placement.”
What that all means is no more block booking by the cable programmers.
In others words, a cable operator who wanted, say, ESPN would not also have to take and pay for ESPN2 and the other spin-off networks and he or she would be able to bump ESPN and its companion networks to a non-basic tier and charge subscribers extra for it.
It sounds more radical than it is, says Tupper.
In effect, it would probably not cause operators to reject networks or lead to more tiering, but it would cause a “slight shift” in negotiating leverage, giving operators a greater ability to fight off rate increases.
Less money for ESPN or Turner means less money they will have to bid against broadcasters for program rights.
“If you don’t truncate the growth and the money that those services are collecting, it will fuel the migration,” Tupper warns.
The Fox affiliates are coupling their legislative agenda with a grassroots effort.
They have put up $30,000 in cash prizes to induce stations to produce spots celebrating the great local programming that TV stations grind out day after day and pointing out just how much better stations are than those remote and impersonal cable networks.
“The theme is local television stations bring communities together,” says Tupper. “Where would you be without us?”
(The affiliates are looking for four series of six spots each, offering $15,000 for first prize, $7,500 for second, $5,000 for third and $2,500 for fourth. The winners will distribute the prizes at their stations as they see fit.)
At the same time the affiliates are running the spots, their general managers will “triple their efforts” to build personal relationships with their representatives in Congress, and they will invite representatives to appear on shows to address migration and other issues dear to broadcasting.
“Our air is probably the most influential component of any member’s reelection,” Tupper says, noting the millions of campaign dollars they pour into stations prior to elections.
A strong public interest argument can be made for the broadcasters’ anti-migration measures, Tupper says.
Unless something is done, Tupper claims, viewers soon have to pay $1,000 a year to watch on cable or satellite what they once got for free on broadcasting.
What’s more, the high-profile network programming helps support TV stations that provide local news and weather. According to Tupper, TV stations produce more than one million hours of local news each year.
“If you are going to throw that under the bus, you can be sure that unregulated blogs with the questionable journalistic skills and veracity of information are not going to fill the void.”
Tupper has no qualms about stations’ demanding answers from elected officials on air. “It’s a real story that really does affect the viewers in our markets.”
The Fox affiliates feel that they have to take charge on the migration issue because no one else will.
According to Tupper, NAB is “totally impotent” on the issue because of the substantial cable interests of some its most influential members, most notably Disney-ABC and NBC Universal, but also major station groups like Hearst-Argyle, Cox and Post-Newsweek. Disney-ABC and Hearst-Argyle’s parent are co-owners of ESPN.
For much the same reason, the Fox affiliates are not counting on much help from the other affiliate groups.
The Fox affiliates are hoping to get some assistance from the Consumers Union, Free Press and other advocacy groups that want to keep cable prices low and see the value of preserving free, over-the-air television.
“We are going to lead and hope that other groups and associations see the merit of what we’re doing and join,” says Tupper.
Nonetheless, Tupper concedes that winning approval of the block-booking proposal is a long shot, maybe 80/20 against.
That’s an honest assessment. With its hodgepodge of allies, the Fox affiliates are unlikely to generate nearly enough support to overcome opposition led by NCTA with its deep pockets.
But why not try?
Even if the Fox affiliates fail this go-round, their grassroots efforts will have lasting effects.
I understand the reluctance to impose another chore on general managers, especially when they are under intense pressure to find new revenue, but getting them to lunch or get out on the golf course with their elected representatives is crucial. Such relationships will pay dividends just as surely as a new account will.
And I look forward to seeing the Fox affiliate’s prize-winning spots. Every station, every day, ought to be reminding its viewers just what a station is and how its continued service is jeopardized by rising cable rates.
I would simply caution the Fox affiliates from using their news departments to bully their representatives. It’s always a temptation, and it’s always wrong.
Broadcast-to-cable program migration is serious and will be fatal if broadcasters don’t figure out a way to stop it. Viewers will go where the best programming is. Simple as that.
Tupper and the other leadership of the Fox affiliates deserve a prize for recognizing the problem and doing what they can to address it.
Harry A. Jessell is editor of TVNewsCheck. You may contact him at [email protected]