Delivering for Television Viewers: Retransmission Consent and the US Market for Video Content

31 July 2014
Dr. Jeffrey A. Eisenach

Video content markets around the world are undergoing a period of profound change with an increasing number of delivery platforms fragmenting markets and challenging free-to-air broadcasting models. In the US, the retransmission consent scheme recognizes the role that broadcasters play in investing in and delivering high-quality services to viewers, and enables them to be compensated for delivering that content to competing platforms. For the first decade after retransmission consent was implemented in the US, cable TV operators refused to pay cash compensation to broadcasters, but more recently broadcasters have successful in winning cash payments. In 2013, broadcasters received approximately $3.3 billion in retransmission consent payments.

Dr. Jeffrey A. Eisenach, Senior Vice President and Co-Chair of NERA's Communications, Media, and Internet Practice, has conducted a study examining the effects of retransmission consent on the US market for video content. Based on his results, Dr. Eisenach concludes that retransmission consent has contributed positively to the development of a robust, innovative video content ecosystem in the US. By allowing television broadcasters to compete on a level playing field with pay TV distributors and, more recently, with new Internet-based services, it has increased competition in the market for digital video programming and distribution. US consumers have benefited from better programming, including more news and other public interest programming, and from the ability to receive free over-the-air programming for which they would otherwise have to pay.

The success of the US retransmission consent regime provides a useful example for other nations in which television broadcasting faces increasing competition from pay TV, Internet-based distributors, and other media. While the details of any such regime should be carefully tailored to reflect local realities, the US example demonstrates that allowing broadcasters to be compensated for the value of their programming is good public policy.