DirecTV Figuring a way Around Retrans Fees
DirecTV is working on a way they won't have to pay your station or company a fee for carrying the station's signal.
Retransmission fess have become a big part of station's bottom lines and DirecTV wants to get away without paying that money.
DirecTV is considering testing a new set-top that incorporates an antenna allowing customers to pull over-the-air broadcast signals, which could allow the satellite giant to avoid paying millions of dollars per year in retransmission consent fees.
Speaking at the JP Morgan Technology, Media and Telecom conference in Boston, DirecTV chief financial officer Patrick Doyle said the company had used the integrated antenna solution early in its history, before it began offering local broadcast channels via satellite. Once the satellite giant began offering local-into-local broadcast signals on a wide scale basis, the antenna solution didn’t make economic sense.
But now, with the advent of retransmission consent and the huge fees that some broadcasters charge, the economics have changed, he said.
“Now we’re spending a fair amount of time on the technology side, taking an over-the-air signal, integrating into our set-top boxes and not paying a retrans cost,” Doyle said at the conference. “Now the NPV [net present value] of the future costs you’re going to pay in retrans is a big enough number … now it’s starting to make sense. We’ll spend more time on it. We’ll probably test in some markets an over-the-air integrated tuner set-up and make sure the customer experience is there.”
Retransmission consent costs have long been a thorn in the side of multichannel video programming distributors. According to SNL Kagan, retrans fees could top $6 billion annually by 2018, with satellite TV service providers paying an estimated $2 billion of that bill.
Doyle wouldn’t say when an integrated set-top would be available, and added that once it is rolled out, it initially will be only with new customers, eventually expanding to its existing base. DirecTV is the second largest MVPD in the country, with about 20 million subscribers.