Time to treat fee-happy local channels like HBO

After WBAY and WFRV revealed they may seek WLUK-like retransmission windfalls, it's time to think of the locals like HBO -- as premium channels. "It's not TV. It's FOX 11."

As long as I can remember, there's been cable in my life.  There was a rooftop antenna on the house I grew up in, but it never even occured to me why.  Local channels were always just there, and front and center among the few dozen cable channels available to us.  They were never fuzzy or snowy like the locals at my friends' houses who used antennas.  My parents had used an antenna for a time, but after getting cable, they never went back.

Cut to 2008 and local channels have always just seemed like a "given" on our cable lineups.  Now times have changed.  The economy is slowing.  Local ad revenue is drying up. Add to that, some networks like FOX now charge affiliates to carry their program instead of the reverse.  In the last year or two, "retransmission fees" have been the buzz of the local TV industry.  From what I understand from a couple dozen Google searches, previously stations could petition for "must carry" status on a cable lineup in their market.  Doing so would increase the reach of a station whose signal could be marginal in areas.  Now a station can either choose to be "must carry," or can negotiate retransmission agreements with the cable operator for a fee.  Until this year, such a thing hadn't been done in the Green Bay market.

Then came FOX 11.  For several years now, the big buzzword for them has been "HD."  They had it.  The other Green Bay broadcasters had it, and cable had their HD.  But not FOX 11's.  Why?  Well, according to the "HD FAQ" that appeared on their website as early as August 2004:

Q. Why won’t cable companies broadcast FOX 11’s signal?
A. In a nutshell, here’s the issue. Cable companies want FOX 11 to give them our digital programming, including HD programs, for free. They in turn want to charge their subscribers for our programming. If you currently subscribe and receive a digital package from a cable company, you know about the significant additional charge. Cable companies keep 100% of that fee.  It is customary for cable companies to compensate cable channel providers for their signal. The Weather Channel, ESPN, USA, Bravo, Cartoon Network, Lifetime, FX, CNN, Discovery, and virtually every other channel is compensated by the cable companies for their programming. ESPN receives over $2.00 per month per household. Cable companies refuse to compensate broadcasters for their signals even though cable subscribers watch FOX 11, CBS, NBC and ABC almost 70% of the time.

This was back during the days in which FOX 11 was owned by Emmis Communications.  Packer fans with HDTVs across the Northeast Wisconsin era hoped that this attitude of precluding FOX 11 HD from cable would follow Emmis out the door as LIN Television Corporation bought the station in early 2006.  Back in October 2008, Time Warner Cable customers find themselves without WLUK in any form as the stalemate between the cable operator and LIN Television enters its second week.

Previously, I had asserted that WLUK must prove that it is worth the 30-cent-per-month fee they're requesting, as their newscasts have suffered incessant on-air snafus and the station overall hasn't offered any additional value to their viewers.  WLUK seemed to rest on their laurels as a FOX affiliate, which brings them Packer games, American Idol and other big-ticket properties.  What had WLUK done for their viewers lately, other than giving Patrick Powell a weather radar he could draw on and zoom into (to hit-or-miss effectiveness) with his fingertips?  I compared them to WBAY, who now operates two digital subchannels popular to the area, and WFRV, who converted their control room to full HD and now broadcast syndicated programming in HD as well as network programming.  I mentioned that those are two broadcasters whom I would have no qualms paying a retransmission fee to, because they have gone above-and-beyond to bring viewers new, exciting added benefits. 

Well, WBAY and WFRV must have been reading that week.  In an interview with the Green Bay Press-Gazette this week, reps from both stations hint at possible retransmission negotiations in the future.  I really didn't think they would do that, but I still stand by my thought that paying more for those stations feels justified compared to WLUK.  And hey... if Journal Broadcast Group decided to do that with NBC26 and WACY, would many people would miss those channels going dark on their lineups?

So now that the retransmission fee bug is spreading through the local TV market like a flesh-eating virus, I think it's time for TV viewers to rethink how local channels work.  If you've got an antenna, you're golden.  No one's saying broadcast TV is changing at all, and it's still free to those within reasonable range of the towers.  When it comes to locals on cable, satellite and telco service, I could very well see some stations branded as "premium channels" the way HBO, Showtime and Cinemax have been since their inception.  I never had those movie channels growing up, but did for a time once I started paying for my own cable.  Why?  They had the good movies and shows, and they were commercial-free.  Now that some broadcasters are starting to charge for their rebroadcast on pay TV, it's time to treat them like HBO.  If you want the fee-happy local broadcasters, you can add them for an additional fee.  Keep the free-minded broadcasters like WPNE and -- for now -- WIWB, WACY, and WGBA available to everybody.

Why do that?  Well, it might prove incentive to the locals to keep their feed free, or much lower in price, to keep them on everybody's lineup.  If ad prices are dictated by viewership, and branding yourself as a premium channel would lead to lower viewership than other local broadcasters, maybe even WLUK would go plead the "must carry" line again.  If given the option to lower your cable bill by shedding FOX 11, WBAY or WFRV and picking them up manually with antenna, I think you'd see a lot more rooftop antennas on cable households.  A couple years ago, I read an article saying Motorola was developing new cable boxes with antenna integration, and why cable operators haven't really deployed them yet, I'll never know.  If you could give your viewers an opportunity to pull in locals outside of your channel lineup, it would seem to me that you would not only avoid retransmission fights like this but you would also free up valuable spectrum for new HD channels and services.

Think of it -- if local broadcasters were deemed "premium channels," you could pick and choose the ones you wanted.  Hell, we all know a la carte cable is never going to happen so long as we live in a 500-channel universe controlled by a handful of corporations bent on "bundling" lesser channels with the popular ones.  But why not the locals?  Keep your WPNE for free, but you could take the WBAY package and the WFRV package for a buck or two a month each, omitting others you watch less frequently.  Perhaps if they all want to trade their right to be carried on cable for demanding fees equal to cable networks, that's the way cable should treat them -- like the HBO's, Showtime's and, yes, the Playboy Channel's of the world.

Maybe it's time to buy stock in the antenna manufacturers too, come to think of it.