After a period of strong growth, BIA Advisory Services is predicting that cord cutting and the shift towards streaming will produce a “flattening” in retransmission fees between 2024 and 2028. That marks and important change from recent years, where BIA estimates that local TV stations generated $12.3 billion in distribution revenue from MVPDs and vMVPDs in 2020, and this rose 22.5 percent to $15.1 billion by 2023.
A blog post by BIA's Rick Ducey noted that “as shown below, NBC affiliated stations saw the largest increase in distribution revenue in this period, followed by CBS, FOX, and ABC. Broadcasters often negotiate both financial and non-financial terms such as including carriage of diginets.”
“Looking ahead beyond 2023, the local TV industry has come to rely on these distribution revenues but the dynamics are in flux,” Ducey noted. “In a world with growing segments of homes that are cord-cutters and cord nevers with a transition to CTV/OTT streaming video services, the economics of retransmission consent are changing as MVPDs see video subscriber losses along with the associated revenues from which distribution fees can be paid. MVPDs themselves are making adjustments by moving towards offering their own streaming services served to their growing ranks of broadband customers versus their traditional cable households.”
The BIA did not provide specific dollar figures for its 2024-2028 retrans fee estimates but noted that “BIA’s latest forecast for local TV station vMVPD/MVPD distribution revenue shows growth from 2023 but an overall flattening in the 2024-2028 period. Of the total amount of distribution revenue in the 2020-2028 period, the Top 25 TV Markets account for over half of the local TV station revenue from multichannel video providers. The Top 10 markets generate 29.9 percent of the total and Markets 11-25 get 21.6 percent.”
