OTA commercial subs.....

Scott Fybush scott@fybush.com
Mon Jun 30 12:22:27 EDT 2014

On 6/30/2014 11:50 AM, Gary's Ice Cream wrote:
> Oh yes they do!    For a while (in the analog days before HDTV) I had
> a TV in my office on an antenna and I would often have it on as I
> prepared dinner (one in the living room was on cable, one in the
> office on antenna) so that whichever way I was facing I could see it)
> and in almost every spot cluster the cable feed would have one or two
> different commercials than the OTA signal.

So here's what's happening:

If you are an OTA TV station today, you have to make a choice every two 
years about how you will interface with the cable and satellite 
operators that serve your market.

Choice A is "must-carry." Under must-carry, the station can compel the 
cable company to carry its programming. No money changes hands from 
either side - the cable company pays nothing for the signal, and the TV 
station gets the visibility of reaching the majority of viewers in the 
market (anywhere from 50%-95%, depending on the market) who use cable or 
satellite instead of OTA reception.

Under must-carry, the cable company has to carry one stream of the 
station's programming (usually the x.1 channel), in HD if it's offered, 
on the station's virtual major channel number or a lower number. (In 
certain cases, if a station was historically carried by cable on a lower 
channel, it must remain there if it wants to.)

Must-carry is usually chosen by smaller stations that want an audience 
and don't offer programming desirable enough to make them eligible for 
choice B. (Think WWDP or WTMU or WMFP...)

Choice B is "retransmission consent." Under retransmission consent, a 
station waives its must-carry rights in exchange for the ability to 
negotiate with the cable/satellite provider on the terms under which it 
will be carried.

In some cases, that's a straight money-for-carriage deal - the cable 
company pays a per-subscriber rate in exchange for the right to carry 
the station.

However, many other pieces can go into the deal. If you're negotiating 
with an ABC owned-and-operated station like WABC-TV, you can expect that 
the rights to carry WABC will be tied into a deal to also pay a specific 
rate for ABC/Disney-owned cable channels such as ABC Family and the 
Disney Channel. (I think ESPN's channels are negotiated separately.)

I would not be surprised to find out that WCVB's negotiations are linked 
in to carriage of A&E and other Hearst-owned networks.

Station owners can also negotiate for carriage of subchannels ("if you 
take WCVB, you must also take MeTV"), for sister stations ("if you want 
NBC on WHDH, you have to also pay us for WLVI"), for channel position 
("if you want to carry WHDH, you have to put WLVI on 12") - and if they 
want to, they can also negotiate to run split advertising on cable, 
allowing advertisers to buy viewers in specific regions.

Some stations have even negotiated to provide cable with split newscasts 
for portions of a sprawling market. At least one of the stations serving 
the Charleston-Huntington WV market, for instance (WSAZ) sends the 
Huntington cable company a separate Huntington-only newscast while 
Charleston cable viewers and OTA viewers get a regional newscast.

But - and this is important - it's not unilateral. Cable companies never 
have the right to replace ads on broadcast channels unless they have a 
deal in place with the TV station. And when they do, you may be certain 
that the TV station ends up getting most of the money from the ad.


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