Before the new year, Comcast sent a Christmas card of sorts to its subscribers: Happy Holidays, your cable bill is going up.
There were a number of reasons for the increase, from regulatory fees shooting up $1.23 to the rental fee for a TV box and remote increasing $2.32.
But the biggest increase? The broadcast television fee. It increased $5 from $10 to $15. That’s right. Comcast is charging you $15 per month for local channels that you can receive over the air for free using an antenna.
“Ninety percent of American families live within range of at last one local broadcast tower, which means they should be able to enjoy ABC, NBC, FOX and PBS for free with a simple, over-the-air TV antenna,” said Grant Hall, CEO of Nuvyyo, which makes the Tablo DVR for cord cutters. “However, most Tablo customers receive more than 40 stations including specialty sub channels featuring classic TV, movies, science fiction, sports and much more.”
The cable giant isn’t alone, though. Big Cable about $5,625,144,000 a year customers paid for free TV channels.
That amount is expected to go up again in 2020.
The cable providers argue it’s to cover the cost of paying broadcast networks and not add to their profits, but they still don’t offer a cable package that doesn’t include those local channels, in exchange for giving a customer the opportunity to just use an antenna and pull down the network-affiliated channels for free. Streaming services, like Hulu Live and fuboTV, don’t tack on these hidden fees and simply bake it into the monthly price.
To break down the amount each cable company reaped in broadcast TV fees last year, we need to rely on estimates. These retransmission consent fees are negotiated between the provider and the network in confidence, but there are research groups who offer up solid estimates that allowed us to reach that dollar amount. We also used the most recent complete subscriber information from Leichtman Research’s 2019 Q4 report.
Subscribers: 21.25 million
2019 broadcast TV fee: $10
2019 Fee revenue: $2,550,480,000
Subscribers: 16.1 million
2019 broadcast TV fee: $12
2019 Fee revenue: $2,324,736,000
Subscribers: 3.9 million
2019 broadcast TV fee: $10
2019 fee revenue: $463,800,000
Subscribers: 3.2 million
2019 broadcast TV fee: $7.50
2019 fee revenue: $286,128,000
Next-gen over-the-air TV
It’s hard to say how we got here with these retransmission consent deals. Some argue it’s a convenience fee to have your local channels ready to watch at your fingertips instead of messing with an antenna — and there is some truth to that. And it’s not all big cable’s fault. Broadcasters rely on those retransmission fees as part of their yearly budgets.
When you want to access local channels through a cable provider, you likely have an interactive guide, the ability to DVR those shows and a chance to scroll forward and see what’s on later in the day. With an antenna, you essentially need the TV guide app on your phone to figure out what’s on at what time.
But that’s also changing. This year, some television markets are launching ATSC 3.0, the next-generation over-the-air TV standard that brings plenty of promises with it, including 4K HDR picture, better sound and — most importantly — better over-the-air TV coverage.
The standard can also send out custom weather alerts, interactive news stories via the Internet and more.
You will need an antenna, but smaller antennas, like the ones offered by Mohu and other companies, will likely suffice. The signal from ATSC 3.0 will be stronger and could potentially allow some users, depending where they are located, to hide the antenna completely and still pull down a crystal-clear 4K feed.
Next-gen TV models from LG, Samsung and Sony are expected to hit the market this year.
As this standard makes it way to markets across the country (we can assume the big markets will get it first and then it will roll out over the next several years to more rural areas), it will be interesting to see how negotiations between broadcasters and cable providers will go, now that the signal will essentially be more valuable.
You can probably bet, though, that’s it not going to decrease the cost of your monthly cable bill.
Editor’s note: This article has been updated with more recent data that came March 3, 2020.