Affiliated TV stations said they are suffering a double retransmission-consent hit from their networks driven by the move to streaming video.
The chairs of the Big Four affiliate associations have been pressing the Federal Communications Commission to start applying retransmission consent rules to virtual multichannel video programming distributors (vMVPDs) so non-network owned stations can negotiate directly with streamers for payment.
According to FCC documents, the chairs of the ABC, CBS, Fox and NBC affiliate associations met last month with top FCC officials, including chairwoman Jessica Rosenworcel and other commissioners, to argue that their respective networks have effectively cut them out of negotiations for vMVPD subscription revenues. vMVPDs like Hulu Plus Live TV, YouTube TV and fuboTV are streaming services that deliver a linear lineup of multichannel programming.
Affiliates emphasized that vMVPDs are a growing video-delivery system. “Today, some 15-20% of live television viewers subscribe to vMVPDs, and that number is expected to rise to more than 30% within the next several years,” they said.
The issue of which regulatory regime to apply to over-the-top video is a long-simmering one, with former Democratic FCC chairman Tom Wheeler at one point proposing bringing streaming services under the agency‘s program access and carriage rules, though that effort failed to gain traction.
“Because the commission’s retransmission consent rules do not currently apply to vMVPDs, the Big Four networks control negotiations with virtual MVPDs,” the affiliate association chairs told Rosenworcel and other officials according to a filing on the meeting. “The affiliated stations are at the mercy of agreements that they have no say in negotiating.“
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“Time and again, the Four Affiliates Associations representatives explained, a Big Four network (or, more accurately, its parent entity) will fully negotiate an agreement with a given vMVPD for carriage of network-owned stations as well as network-owned cable channels and other, less-popular programming — without any meaningful input from its non-owned affiliate stations,” they said. “After such an agreement is all but finalized, the Big Four network will then present the agreement to its local Affiliated stations in what generally amounts to a ‘take it or leave it’ deal that the Affiliate must accept if it is to be carried on the virtual MVPD at issue.”
They told the FCC officials that until the agency defines vMVPDs as MVPDs, the over-the-top platforms are also not subject to consumer protection rules on accessibility to emergency programming or Equal Employment Opportunity (EEO).
While on the subject of networks and streaming services, the affiliate associations also pointed out another "challenge" to the network/affiliate relationship that represents another threat to the retrans fees that pay for the local news and public service information programming that their viewers rely on.
They pointed to network-owned direct-to-consumer services like Paramount Plus, Peacock and Hulu, and the move to those platforms of network programming that used to air exclusively on TV station affiliates. They called the programming shifts a “loss of valuable exclusivity that hinders [stations’] ability to negotiate fair compensation for retransmission of their signals.” ■
