To some, hearing “retransmission fees” reminds them of times being unable to watch their favorite shows because their cable provider/satellite provider/network/sports network/local channel can’t agree on whether showing the program is worth it.
DirectTV is aiming to avoid paying millions in retransmission fees by adding an integrated antenna into its set top boxes to grab over-the-air signals for free. These savings will hopefully be passed on to their customers and also help the service pick up more channels and produce their own TV shows. There are lots of ways to sign up for DirecTV through sites such as www.SaveonTVDirect.com, via phone, and occasionally coupons come in the mail.
At a recent conference in Boston, DirecTV CFO Patrick Doyle stated that with the advent of retransmission consent and the large fees that many broadcasters charge to customers, they are now able to integrate the antenna.
Doyle stated at a conference that, as of now, DirecTV is “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 retransmission cost. Now the NPV [net present value] of the future costs you’re going to pay in retransmission 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.”
For quite some time now, retransmission consent costs have been a pain to multichannel video programming distributors. In fact, retransmission fees could hit $6 billion annually by 2018. Of that, satellite TV service providers would be paying about $2 billion.
Doyle hasn’t said when the new air antenna would be available, but he did say that in the beginning, it would be only with new customers, and then expand over time to its existing customers.
As of now, there have been no dates set for testing. In fact, DirecTV spokesman Darris Gringeri stated that the company is “just exploring any options that could help get programming costs under control.”
DirecTV has already hesitated at carrying the Pac 12 Network and Comcast’s Houston regional sports network, because they may not have the viewership to justify the price. However, DirecTV does carry Time Warner Cable SportsNet in Los Angeles, which some believe to be the priciest of regional sports, because it considers the network a must-have for its customers in that market.
According to Doyle, chance will only come when costs get to the point that they are so high that a content owner can’t realize a return on its investment if Washington doesn’t get involved.
Doyle also said that the next test could come with the upcoming Los Angeles Dodgers RSN. According to Doyle, “We’re spending a lot of time, and we will continue to spend a lot of time, on how many of our customers watch a Dodgers game on any given night, how does it spread across the base, when we are presented with an offer, how does that cost match up with the value we see to our customers. You go back a few years ago, we weren’t doing that kind of analysis.”
What do you think about the possibility of DirecTV testing a set-top that has an antenna that lets you pull over-the-air broadcast signals in order to save money?