About channel carriage issue


28 Jul 2020
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Guys, I thought that channels have to pay fees to DTH operators. But when I was searching google, I got this link: How much do TV channels charge cable companies? - Quora

It says that channels don't pay the DTH operators. It is the opposite way: DTH operators pay the channels :ouch:


"TV Channels" don't charge anything; they just carry electrical signals.

Program suppliers charge cable companies an amount that can vary from $0.00 to hundreds of dollars per channel per month. Here’s a list of possibilities:

Television Broadcast Stations

Television broadcast stations transmit their signals "over the air." If you have your own antenna, you can pick them up off the air for free. If you have cable TV, you receive them as part of basic cable service.

Under federal law, cable TV systems must carry most local broadcast stations on the basic tier (this is called the "must-carry" rule). Under certain conditions, federal law also allows broadcast stations to demand cash payments, or other forms of compensation, from cable operators (this is part of a set of rules called "retransmission consent").

If the station elects "must carry" the cable operator must carry the station's signal but no money changes hands.

If the station elects retransmission consent the fee can be hundreds of dollars per month. If the two parties can't agree the cable company may drop the station temporarily. This has been the cause for numerous public squabbles.

PEG Channels

"PEG channels" are free to the cable operator. PEG channels are dedicated to Public Access, Educational Access, and Government Access. Under federal law, Local Franchising Authorities (LFAs) have authority to require that cable systems provide PEG channels and carry them on the basic tier.

Political support for PEG channels varies widely. In many communities, only a small percentage of subscribers watch these channels. Yet in spite of low viewership levels, these channels often enjoy strong support among community leaders.

Although cable companies do not pay for the PEG channels they must pay franchise fees (typically 5% of gross revenue) and often have to pay for other goodies such financial support. Some cable franchise agreements specify that the cable company must provide studio facilities including color cameras, video recorders, and even staff.

Religious Channels

Religious channels are free to the cable operator. These channels derive revenue from viewer donations. Although cable companies do not have to pay for these channels, they still must pay for the entire infrastructure that carries those channels to the subscribers. That is a significant expense.

Home-Shopping Channels

Home-Shopping Channels are free to the cable operator; indeed they may even pay the cable company a percentage of sales revenue. .

Advertising-Supported Cable Channels

This category includes some of the most popular programming available from cable television: Animal Planet, CNN, Discovery Channel, Disney Channel, ESPN, Fox News, MSNBC, MTV, Nickelodeon, TBS Superstation, USA Network, WGN America. This category also includes a few cable channels that do not accept advertising: the three C-SPANs (funded by license fees), The Disney Channel (funded by license fees), Turner Classic Movies (funded by license fees), NASA-TV (funded by taxpayers), and LINK-TV (funded by viewer contributions).·

Advertising rates are based on several factors, but a significant factor is the total number of potential viewers. Every month, every cable company reports to its program suppliers the total number of subscribers that it bills for each tier of cable service. The total number of subscribers capable of receiving a given channel, summed across all cable systems, is then taken as the number of potential viewers for that channel. Even if you never watch a particular channel, you're counted as a "potential viewer" if you subscribe a tier that contains that channel.·

The license fee is the wholesale price that every cable company pays to a program supplier in exchange for the right to carry its programming. For channels carried on the basic tier, typical license fees are around $0.25 to $0.50 per subscriber per month, although ESPN's exceeds $5.00.

Cable companies recover license fees from their subscribers by building them into the retail price of the tier on which they are carried.

Premium Channels

This category includes programming offered at separate retail prices (HBO, Cinemax, Showtime, The Movie Channel, Encore, Starz) and programming offered on a pay-per-view basis. These channels are supported by license fees; most of them do not accept advertising. The license fee varies widely, but typically about 50% percent of the retail price.
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