Video Call Center, the technology company founded by television veteran and former Sanford Bernstein analyst Tom Wolzien, reached another milestone Thursday, landing a deal with television station group TEGNA to use VCC's Caller Cloud Video Service in its newly launched news and entertainment program, Daily Blast Live.

TEGNA, the former broadcasting arm of Gannett Co., has about 46 TV stations in 38 markets. Daily Blast Live debuted Sept. 18 on 36 TEGNA stations as well as Facebook and You Tube, using VCC technology to do a live remote interview with a survivor of the recent mass shooting in Las Vegas.

VCC's Caller Cloud Video Service provides a caller acquisition and production system specifically designed to enable live, interactive broadcast remotes with celebrities, subject matter experts and everyday audience callers, according to the company. With the Caller Cloud TEGNA can:

• Manage the process of screening and preparing callers for air in real-time. This includes the VCC’s team of call screeners and the use of Caller Queue, the VCC’s unique “green room in the cloud.”
• Integrate video callers into the Daily Blast Live production control room located at TEGNA station KUSA in Denver where Daily Blast Live is produced.
• Optimize the visual quality and reliability of video calls originating from smartphones and other devices using native video over IP applications and public Internet connections.

“Daily Blast LIVE is an innovative, fast-paced show that relies on the latest technology to engage with celebrities, experts and viewers no matter where they are,” said TEGNA senior vice president, programming Bob Sullivan in a statement. “TEGNA was an early adopter of the VCC and we are excited to work with them on DBL. Their innovative technology offers our production team numerous options to create an ever-changing and dynamic live program every day.”

TEGNA has had a long relationship with Video Call Center and was one of its first major investors back in 2015.

VCC CEO Larry Thaler said in an interview that the technology allows programmers to rapidly set up remote interviews by using the technology available to the subject, either their cell phones, laptops or tablets. And it brings a new twist to live segments, which he said are increasingly being demanded by advertisers and programmers.

“Live is dramatically more valuable with advertisers than pre-recorded content,” Thaler said.

VCC technology is showing up in other networks as well. The company has a long-standing relationship with Discovery Communications, which is using the VCC for a live segment near the end of Alaska: The Last Frontieron the Discovery Channelthat allows fans to call in and ask cast members questions. The technology also is being used by Discovery network TLC in an epilogue as part of its 90-day Fiancéshow, giving updates on couples after their segments finish taping. VCC provides a way around the logistical and costs constraints inherent in bringing the couples together from halfway around the world, Thaler said. It’s first epilogue show airs on Oct. 30.

Broadcasters continued to eke out double-digit percentage increases in retransmission-consent revenue in the first quarter, despite mounting evidence that the pay TV universe is shrinking.

A look at some of the top broadcast station groups show that retrans revenue, while still rising at a healthy double-digit percentage clip, leveled off a bit from the triple-digit increases of a year ago. But overall growth at the top five publicly traded broadcasters rose a collective 25% in the period, slightly behind the 35% increases in the first quarter of 2015.

SCRIPPS LEADS THE CHARGE

Leading the charge was E.W. Scripps, which boosted its quarterly retrans haul 92% to $53.6 million, behind the 123.8% increase in the same period last year. Sinclair Broadcast Group — the largest station owner with 172 broadcast properties in 81 markets — maintained a high-single digit percentage increase in the period, although it told analysts those raises will taper off in the next three years as its deals mature.

Sinclair said its next big retrans negotiation will be at the end of the year, with Comcast, and it expects 2017 retrans increases to be in the mid-single digits, dipping to the low-single digits by 2018.

The company, which has been aggressively accumulating stations over the past five years — it had only 58 stations in January 2011 — will have some added leverage in retrans negotiations going forward. It agreed to purchase sports network Tennis Channel in January (the deal closed on March 1), adding to its growing stable of cable networks that include American Sports Network, Ring of Honor and Comet TV. While Tennis Channel had little impact on the first quarter — it had only been officially under the Sinclair umbrella for a month in the period — the network is expected to have influence in future negotiations.

The second-largest station owner — Nexstar Broadcast Group, with 104 properties in 54 markets — saw retrans revenue rise 46.2% to $97.3 million in the quarter, less than the 89.5% increase in the same period in 2015.

Of the top six station owners, all except Tegna, the former Gannett broadcasting group, reported a smaller percentage increase in Q1 2016 than in the prior year. That could be in part because of a declining pay TV subscriber base, as total pay TV customers fell by 1.2% in the quarter. But it is more likely tied to the timing of retrans renewals and overall market maturity. Tegna said it expected retrans to grow more than 30% for the rest of the year.

MVPDs reached several retrans deals with station owners in the first quarter, including Cox (with Nexstar), Time Warner Cable (with Scripps) and Dish (with Cordillera Communications), which likely had an impact on revenue growth. Most of those deals — except for TWC and Scripps — also included brief blackout periods, which one pay TV industry group believes has a huge impact on rates.

The American Television Alliance, a group that includes the traditional pay TV distributors such as Charter Communications, Cablevision Systems, DirecTV and Dish Network, said there were 193 blackouts in 2015 — a new record and more than twice the 94 blackouts in 2014. So far in 2016, 26 blackouts have occurred, and more are expected as deals come up for renewal, usually around major sporting and entertainment events.

The ATVA sees a direct correlation between blackouts and higher retrans fees, adding that oftentimes consumers are forced to pay higher rates after a dark period has ended.

“Each broadcaster’s quarterly earnings report is further confirmation that the retrans cash grab is driving the TV blackout crisis,” said ATVA spokesman Michael Hacker in a statement.

Back in July 2015, SNL Kagan raised its estimates for overall retrans revenue growth to $10.3 billion by 2021, a 63% increase from the $6.3 billion in 2015. CBS alone has said it will generate about $1 billion in retrans revenue in 2016, growing to $2.5 billion by 2020.

RETRANS TAKES UP THE SLACK

Retrans fees have been a savior for some broadcasters, taking up the slack in recent years as the advertising market has tanked. But even as ad sales have begun to rebound — Morgan Stanley media analyst Ben Swinburne said in a recent note that the first quarter was the strongest for national TV ads since Q3 2013, with broadcast advertising revenue up between 8% and 10% — retrans fees continue to rise.

While overall percentage growth appears to have slowed in the first quarter, Pivotal Research Group CEO and senior media and communications analyst Jeff Wlodarczak said it probably won’t last long, adding that it could simply be a result of the “law of large numbers.”

“As they keep getting bigger, the growth is going to slow,” Wlodarczak said. “I see broadcasters trying to push through higher fees on distributors to offset lost revenue from cord cutters/shavers, which will of course only exacerbate the problem.”

Activist investor Carl Icahn recently bought nearly 15 million shares in Gannett Co., or 6.6% of its outstanding stock, adding that he wants to play a role in its plans to split its publishing and broadcasting units.

According to a 13D filing with the Securities and Exchange Commission, required of holders of 5% or more of a public company’s stock, Icahn began acquiring shares of Gannett in mid-June, about two months before the company disclosed it would split its 46 television broadcasting stations and publishing unit (including national newspaper USA Today) into two separate publicly traded units. The split, which is expected to close in the fourth quarter, would create two pure play publishing and broadcasting stocks. Some analysts have speculated that the Gannett split, and others proposed by Tribune Co. and E.W. Scripps, could create a second wave of consolidation among owners of TV stations and give them more clout in retransmission consent negotiations with pay TV distributors.

In the SEC filing, Icahn, who has a reputation for buying large stakes in companies and pushing for management and operational changes, said he believed Gannett shares were undervalued. Although he has not yet met with Gannett officials, the document stated that Icahn and his representatives “intend to have discussions with representatives of the Issuer's management and board of directors relating to the planned separation, corporate governance, capitalization and capital allocation.”