The depressing truth behind TV’s internet revolution
As RBC Capital Markets explained this morning: “We don’t think there will be huge demand for this product on a standalone basis, but that’s probably not the point.” The point, it argues, is enabling CBS to get more in “retransmission” and digital fees, which are paid by cable companies (and telecom/satellite pay TV operators) to broadcasters for the rights to carry channels in their packages (and their own “TV everywhere” offerings). At the moment, RBC estimates that CBS is getting $2 per subscriber from cable companies in “retrans” fees. The new service will cost $6 a month. If it gains any traction, CBS will have more leverage with the cable companies next time retrans negotiations come around. – John McDuling,Quartz
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