For years, we have seen the cost of TV going up, and two of the main causes of that are broadcast TV channels like ABC, CBS, FOX, and NBC, along with RSNs. Now these companies want more money that will likely drive up the cost of cable TV.
Now, according to Gray Television the second largest owner of local affiliates in the United States, we get a good idea of how much locals and RSns cost. According to a report from Gray Television 22% of cable TV bills are for locals, and 10% are for RSNs. With numbers like that you can understand why many streaming services have dropped RSNs if they cost 10% of the total cost of the bill for one channel.
What is maybe even more shocking is the fact that Gray and recently Nexstar both have come out saying they expect to get more money for their local TV station.
To help cover the cost of locals and RSNs, many cable TV companies have started to raise the fees they charge for these channels. Comcast, early this year, raised the price of its Broadcast TV fee to $31.25 a month on top of the advertised price. Not only that, but you will also find in many areas a $9.10 RSN fee.
This means Comcast is adding $40.31 to many of its TV packages on top of the advertised price. So that $70 Popular TV package that offers 125+ channels will now cost you over $110 a month once they add in the RSN and broadest TV fee.
Gray Television in a presentation to investors today, said they expect to get even more from cable TV bills going forward. According to the presentation, they are counting on more professional sports moving to local TV stations as RSNs shut down. This, they hope will allow them to charge cable TV companies even more money.
Already Scripps owner of local TV stations, has announced that it expects $750 million in retransmision revenue from cable TV, up 15% over last year. The company also said it was able to get a 40% increase in net distribution dollars.
Scripps President and CEO Adam Symson said in a release that he was “pleased” that the company secured the agreements without resorting to blackouts that “punish viewers.”
Locals are not stopping there as they are also pushing to reclassify streaming services like YouTube TV as cable TV companies so they can charge even more.
As more Americans cancel cable TV local TV station owners are trying to keep their high profits by charging more. The question now is at what point will this become unsutainable.