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Comcast's Burke: NBC/U will be seeking higher retrans fees

Thu, 09/12/2013 - 12:32pm
Brian Santo

If the U.S. cable industry was looking for the largest MSO to help push for reform of retransmission consent, it can forget it. Comcast’s programming arm is far behind its direct competitors when it comes to collecting retrans fees, but it is about to get aggressive on that front, according to NBC/Universal CEO Steven Burke.

“NBC made virtually nothing on retransmission consent two years ago. This year we’ll make about $200 million and I think if you go out two or three or four years other broadcasters like Les Moonves and Chase Carey had really said how important retransmission consent will be for anybody is in the business,” Burke said at the Bank of America Merrill Lynch 2013 Media, Communications & Entertainment Conference.

Burke noted that NBC/Universal’s contracts with several large distributors are about to lapse, and the company will be renegotiating more aggressively to increase the retrans fees it collects. He acknowledged that that position is going to be problematic for Comcast’s cable business.

Referring to the acquisition of NBC/Universal, he said, “One thing that we really hadn’t figured on when we did the deal was how rapidly retransmission consent was going to establish itself. We underestimated that frankly. That’s a very good thing for NBCUniversal not so good I think for Comcast Cable.” The source for Burke’s comments is a transcript provided by Seeking Alpha.

Time Warner Cable and Bright House Networks just had a high-profile stand-off with CBS over retransmission consent fees that led to a month-long blackout. TWC eventually began offering subscribers antennas to get CBS directly off the air.

Others assumed Aereo would end up taking advantage of exactly such situations.

Comcast now not only has a cable operation and cable channels, but also the NBC broadcast network. Asked about how companies like Aereo might affect the situation, Burke said, “Well, I think Aereo is going to be found unlawful. So, I don’t think that’s something that we’re not necessarily worrying about and I know there is been a lot of talk about taking broadcasters and turning them into cable channels which is something that we’ve looked at. But my bet is that what’s happening here is that the broadcast channels are turning into do a revenue stream businesses and they’ll remain do a revenue stream businesses for a long time I mean the fact of the matter is ABC, NBC, CBS and FOX aggregate the biggest audiences in the country and those audiences are valuable.”

Asked about competition from over the top distributors, Burke said, “Personally I’m skeptical that over the top is a good business. I looked at it many, many times and with or without high def or 4K or new technologies – I’m just skeptical. It remains to be seen. Maybe I’m missing something but I’m not sure over the top it’s a real business. 4K I think it’s a very interesting question. I have seen it and what I’ve seen it, its spectacular.”

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