By Joe Flint
Tribune Co., owner of 16 television stations across the country including KTLA-TV Los Angeles, is threatening to pull its channels from satellite broadcaster DirecTV.
At issue are fees that Tribune, which is also the parent of the Los Angeles Times, wants DirecTV to pay in return for carrying its local stations.
Such fees are known in the television industry as retransmission consent agreements. As broadcasters have faced greater competition for advertising revenue from cable television, most have sought to establish a second revenue stream through retransmission consent fees. Cable networks already have duel revenue streams.
Tribune's current agreement with DirecTV expires at midnight March 31, and the company said it wanted to start alerting viewers now of a possible disruption of service.
“Despite our best efforts, DirecTV is refusing to offer a fair deal and we remain far apart in negotiations,” said Tribune Broadcasting President Nils Larsen.Read More: Tribune threatens to pull stations from DirecTV - latimes.comThe 1992 Cable Act gave broadcasters the right to seek retransmission consent fees. At that time, most chose instead to leverage that right into new cable channels. News Corp., for example, launched FX and persuaded cable and satellite distributors to pay for that, and carry its local TV stations as part of the deal. NBC took a similar approach for the channel that ultimately became MSNBC.
Now broadcasters typically seek cash from distributors for their television stations. Typically, local TV stations ask for as little as a few cents per month, per subscriber up to as much as $1 dollar per month, per subscriber.
Tribune President and Chief Executive Eddy Hartenstein is a former CEO of DirecTV.
A large reason that local stations haven't been actively promoting their over the air signals is because they have drank the Kool-Aid of retransmission consent. In short, they can get more money if a person subscribes to a pay service rather than getting their signal over the air. That of course doesn't take into account the lost ratings that happen when people have access to cable channels. A little known fact is that both Dish and DirecTV almost always receive their local signals over the air, compress the signals before retransmitting them, and often pass reception problems at their "head ends" on to their customers.