Executives See Big Potential for Retransmission Consent Revenue at NBC
Retransmission consent revenue from NBC’s station group and compensation from its TV station affiliates could amount to “hundreds and hundreds of millions of dollars” for NBCUniversal, Steve Burke, executive vice president of Comcast and NBCU CEO, said at a Bank of America conference Wednesday. “If we get what I think the market will shake out at for our own stations, plus we get a big chunk of what our affiliates end up charging,” NBCU will see large gains in retransmission consent revenue at the broadcast division, he said. “Perhaps our biggest upside at NBCU in the near term is broadcast."
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No broadcast network has ever been as financially far behind its competitors as NBC is today, Burke said. That gives the company plenty of room for growth, he said. Consequently, NBCU plans to invest in programming to pull the network from the ratings basement, boost local programming and get its syndication business going again, he said. “There is nothing that we can do with USA or Bravo in the near term that can match that opportunity,” he said.
Media companies are starting to find the right balance on retransmission payments, said Burke, who said he spent 12 years fighting to stop retransmission consent payments to broadcasters. Comcast-NBCU probably won’t “lead the charge” on extracting higher retransmission consent payments, “but I think we're going to try to get compensated similarly to CBS, ABC and Fox,” he said.
With its affiliates, NBC has proposed handling all carriage talks, offering a 25 cent per subscriber monthly payment as a floor, and “we would share 50 percent of whatever we would get,” he said. That arrangement would probably lead to fewer station blackouts and fewer carriage disputes, he said. “If we do it the right way, it would reduce the risk of having channels go off the air,” he said.
NBCU is limited in its “degrees of freedom and running room” when it comes to online video, Burke said. “We're in a slightly different situation than other companies, in that we signed a consent decree that said we're going to continue to distribute product on the Internet the way we have historically,” he said. For the company’s new iPad app, it took all the content that was already available on NBC.com and made it available on the iPad, he said.
As online video distribution rises in prominence, it will become more important to have top-tier cable programming networks, Burke said. “You could argue that the Internet and alternative distribution could do to cable what cable did to broadcast,” he said, noting that the broadcast business is still profitable. “But our feeling is that not all cable channels are created equally. If there’s a top 100 of well-distributed cable channels, you don’t want to be in the bottom quartile,” he said. “That’s not a good place to be.”