We have previously written about some of those pesky hidden fees buried in cable and satellite bills each month. (Even Hulu TV charges an incremental DVR fee.)
Now we’d like to explain one fee that is extremely confusing, sometimes hidden and quite expensive – retransmission fees. These might also be called consent, broadcast and/or programming fees, just to complicate matters further.
With the television landscape in a state of flux, the FCC may be reconsidering who has to pay for these fees.
Why Should You Care about Retransmission Fees in the First Place?
While streaming content is certainly the rage, a huge chunk of folks still like to watch local news, sports and other premium content. In fact, we carried out our own research to prove it. And though Hulu and YouTube are making headway among cord cutters, guess what? The overall cost of streaming TV is slowly approaching that of traditional pay TV services, with further hikes possible on the horizon.
One reason the cost of cable and satellite television service is so high is because of retransmission fees which are passed along to consumers by cable and satellite companies, even though those signals can be freely received with an over-the-air antenna.
So that’s why you should care.
How Content Makes its Way to Your Home
Are you confused yet?
To help shed light on who has to pay a retransmission fee and who doesn’t, it is helpful to understand how programming makes its way to your television set. Take a look below:
There are several ways to receive video content to your home.
First, you can get it directly from the local broadcast TV source. Shows like the ABC Nightly News or This is Us are produced by national networks and are ‘free’ when transmitted to your home over-the-air, and received via an antenna like “rabbit ears.”
Second, you can get local TV and more through an intermediary, such as cable and satellite companies. These companies offer those same shows mentioned above from major broadcasters plus premium content like ESPN’s College Game Day or HGTV’s Property Brothers. (These shows are also streamed on various platforms as well.)
Third, media companies like Amazon Prime and Netflix create shows like Marvelous Mrs. Maizel and Stranger Things and stream them into your home via the Internet.
Last, and we’d like to think best, is Evoca’s hybrid model. Using Next Gen TV and our proprietary TV transmission tower, you can view local shows, sports and premium channels. Evoca even delivers internet-based content via TV broadcast signals so you don’t have to worry about clogging your bandwidth.
Here Come the Fees
Major national networks and local affiliates generate billions of dollars by selling on-air ads. But that’s not the only way they make money.
Since local stations have to pay the major networks (ABC, NBC, CBS, Fox) for content, they can, in turn, charge cable and satellite companies retransmission fees to offer their programming through cable and satellite systems. Though local stations end up being middlemen, the burden for paying programming fees falls on cable and satellite subscribers.
These local TV “retrans” rates range from $2.50 to $3.00 for every subscriber, according to industry analyst telecompetitor. As an example, this translates to an incremental and extra $15/month for a typical satellite household in Boise, Idaho who wants to use that service to watch local channels. Across the nation, those fees add up to almost $11 billion/year (yes, that was BILLION).
And another thing. The rates continue to rise.
As much as 11% every year.
Free TV, The Way it Should Be
As previously mentioned, cable and satellite users are paying retransmission fees to watch content produced by the big four national broadcasters. And these same shows are free over-the-air to those using an antenna.
Evoca, through its Next Gen TV broadcast service, is working hard to make sure these channels are available to consumers free of charge. That’s why you need an antenna, along with Scout, our receiver, for service. With Evoca, you only have to pay for the same premium channels we have pay for. The rest is free, the way it should be, because you’ll be receiving those local channels over-the-air – just like your TV is already equipped to do.
And what that means, if you have followed along this far, is great TV for less than $50/month.