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Cable Should Pay for DTV Signal

Guest Commentary 1/18/2004 07:00:00 PM Eastern



Author Information
Ostroff is vice president, new technology, for the Sinclair Broadcast Group

It seems to me that the growth and ubiquity of subscriber cable is rapidly marginalizing the free over-the-air broadcaster. The coming of DTV and its lack of ease of reception with antennas has certainly served to hasten whatever fate we terrestrial broadcasters will have to endure.

When we accepted the ATSC transmission system, we sacrificed, knowingly or unknowingly, a future that could have included a mobile and a pedestrian component as well as reception of our signals by simple indoor antennas. For fixed reception, we therefore placed ourselves fully in the hands of the cable and satellite industries to provide us with our connection to the audience. Whether we like it or not, that is not likely to change.

Not all broadcasters are willing to take it quietly, however. Emmis Broadcasting took a step to withdraw its HDTV signal from a local cable company if it was not paid for that product. Sinclair Broadcast Group is withholding its HDTV signals from cable unless operators are willing to discuss compensation. So far, the industry is unwilling to even approach the subject of fair and equitable compensation. Such compensation is essential to support the magnitude of our DTV investments.

Why do terrestrial broadcasters allow cable companies to take and use without compensation a product that costs us millions of dollars to create and deliver? The model that supported a free use of our analog signals was based on historically viable advertising revenue. That is not true for DTV.

Why do most of our industry leaders sit in their offices seemingly unwilling to speak out and support a collective effort to challenge the cable industry to fairly compensate us for our product? It seems to me that a united effort would be far more effective than the few skirmishes that flair up from time to time. Is it not time that other broadcasters rally to defend their businesses?

Some will say that the only way to approach the cable companies and make our point is through an industry-wide effort. The obvious candidate to take up that challenge is the NAB. As an industry, we have spent billions of dollars to create a DTV delivery system with no obvious source of immediate income. This investment, made in good faith, needs to be supported by a viable cash stream if we are going to survive in a digital and wired world. It is clear that advertising just is not ready to support DTV. The only obvious source of immediate revenue seems to be fees fairly paid to broadcasters for their signals.

Meanwhile, our investment costs continue while the cable industry uses our DTV product as an enhancement to drive subscribers to premium digital tiers. For the cable industry to take a position that the product is free in the air and, as such, is theirs for the taking is patently absurd.

Broadcasters control the most powerful promotional engine on the planet. Why do we not use it to make the public aware of our case and promote and preserve our businesses? Why do our "industry organizations" not step up and address these issues? Why are individual broadcasters left to do battle with a monopolistic cable industry without any support from our Washington organizations?

In short, What am I missing?



Author Information
Ostroff is vice president, new technology, for the Sinclair Broadcast Group

 

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