It cites a recent study to argue that higher cable subscriber rates have not been driven by an increase in retransmission consent payments to broadcasters.
NAB today responded to claims made by the American Cable Association (ACA), which yesterday asserted that cable subscription rates have risen due to “excessively large retransmission consent gains.”
In responding to ACA’s claim, NAB pointed to a recently released study, which details how several cable operators’ gross profits increased from $48.96 per subscriber per month in 2003 to $62.99 per subscriber per month in 2006, an increase of $14.03 per subscriber per month. During that same period, the cable operators’ programming expenses per subscriber per month increased from $15.63 to $18.47, an increase of just $2.84 per subscriber per month.
“With cable’s profits rising five times as much as their programming expenses, it is absolutely illogical to claim that retransmission consent plays a significant role in the continued escalation of cable subscription rates,” NAB Executive Vice President Dennis Wharton said.
The study found that while some recent retransmission consent deals have included monetary compensation for the local broadcaster, the compensation figure “is trivial when compared with cable operators’ revenues and costs.”
“Retransmission consent fees account for only two tenths of one percent of cable revenues today, and industry analysts predict they will never rise above one percent,” the study concluded.
NAB said the study also showed that an American household is about 10 times as likely to experience a complete cable system outage, and about 24 times as likely to experience an electricity outage, as it is to be deprived of its first-choice television channel because of a retransmission consent dispute.
The entire study can be read online in PDF format.