Paidcontent.org recently interviewed ABC News Digital Senior Vice President, Paul Slavin, who revealed that he expects to have a paywall plan in hand as early as June. Paywalls have become a hot topic, and a sore subject, for media outlets lately, and they have found proponents in everyone from Rupert Murcdoch, to the New York Times, to Hulu. For PBS, many questions should arise here. Should it ever implement a paywall? Would anyone pay for PBS’ current content? Could a paywall help replace the pledge drive system someday? Is a PBS paywall system even possible, or permissible? If it were, what regulatory hurdles would PBS have to clear first?
Other broadcast networks are making their case for cutting themselves in on cable fees and installing paywalls, and these new revenue streams will improve their fiscal fates. Conversely, PBS’ inability to tap these streams and keep pace with fellow broadcasters, may only hasten its demise.
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The Feds and Congressional leaders are promising strict scrutiny of Comcast’s proposed purchase of NBC Universal, and rightly so. Recently, broadcast networks like Fox and ABC have been firing shots across the bows of Time Warner and Cablevision, respectively, threatening to blackout major events like the Super Bowl and the Oscars, unless the cable giants pony up on fees. So it is indeed curious to see Comcast buying NBC just as its broadcast bretheren are launching a major fee offensive. In fact, ABC’s recent blackout showdown with Cablevision has cable companies lobbying the FCC to prohibit networks from pulling signals during negotiations.
The opening salvo of the fee wars has shown cable companies the kind of the intimidation broadcasters are willing to wield against them to force fee concessions. Could it be that Comcast has read the writing on the wall, and seeks to buy a non-aggression pact with NBC? Only time, and plenty of government oversight, will tell.
In buying NBC, Comcast is also buying the right to charge more for NBC shows, and even leverage them in certain markets, which would necessarily hike cable rates nationwide and ruffle Comcast’s competitors, broadcasters, and customers alike.
The fee wars are poised for an escalation, and broadcasters may be down to two choices for survival. On one hand, they can hedge their losses by fighting, as Fox and ABC have, for cable fees. And on the other, they can be purchased by a cable provider and live on as vassals in the broadcast realm. So, whither PBS? It’s the one broadcaster that can’t be sold, merged, or leveraged (although Comcast already owns PBS Kids), which leaves PBS with no other choice but to assert its market standing and either negotiate for retransmission fees (like ABC), or promote its future as a subscription channel (like FOX). There is, of course, a third choice: to be put out to pasture.
In the wake of the Newscorp’s recent dustup with Time Warner Cable, ABC Disney has threatened a blackout for Cablevision subscribers after midnight this Saturday, unless Cablevision pays ABC Disney a fair share of the $18 monthly fee it charges subscribers for basic broadcast signals. The blackout could leave 3.1 million Cablevision subscribers Oscar-less on Sunday night, and so another mass media game of chicken is set to play out. Cablevision just posted a fourth quarter profit, with revenues up 5%, which could explain why ABC suddenly wants a piece of the action.
The obvious question may be when do NBC and CBS join ABC and FOX in the fee racket game? With network ad revenues shrinking, subscription channels thriving, and cable providers profiteering on fees, these isolated skirmishes seem likely to broaden to a national fee war. The less obvious question is what will happen to PBS if it sits this fight out. Change has come to the broadcast market, and networks are taking an ‘adapt or die’ approach. If PBS can’t bring itself to join the network axis powers to capture a modest share of the cable fee spoils, or even institute a distinct cable subscription fee all its own, it may already be dead.
Read more about this story at NYTimes.com by clicking here.