Retrans revs set to pass billion dollar barrier by 2014
Joseph O'Halloran ©RapidTVNews | 02-11-2011 In what would amount to a huge boost to both TV Networks and Affiliates reverse retransmission revenue will grow from just nearly $500 million in 2012 to $1.3 billion by 2015 according to SNL Kagan.
The analyst says that despite continued sporadic flare-ups between broadcasters and multichannel operators, TV station owners are continuing to gain significant step-ups in monthly per-sub retrans fees.
Reverse retrans, added to the retrans revenues going to the nets' owned-and-operated stations, produces a major new revenue stream for broadcast networks.
For major networks, sharing in affiliates' retrans revenue stream is now a given says SNL Kagan and even though it notes that slightly different models are emerging, it believes that network partners appear to be planning to receive at least half of the income flowing to affiliates.
SNL Kagan regards the next several years as pivotal in the establishment of reverse retrans deals, with most networks' agreements having come up for renewal by 2014-2015.
Examples cited by SNL Kagan of major players with key assets that will draw reverse retrans revenues include networks that procure major sports rights, such as NBC's deal to acquire TV rights for the Olympics. The analyst also believes that such networks could use such content to bolster their leverage with affiliates. However the retrans growth leader over the next five years will likely be News Corp, CBS, Comcast (including NBC). Disney (ABC) and Univision.
Broadcasters could also benefit from a boost in margins that has followed the growth of the high-margin retrans revenue stream will not dissipate in the coming years. For smaller TV stations in particular, retrans can make up a sizable portion of cash flow.
Yet on what may be a cautionary note for over the top and other online video services, SNL Kagan suggests that broadcast networks may minimise the amount of high-value programming made available for free online in order to protect the rising retrans fees revenue stream.