The National Association of Broadcasters Friday said the American Cable Association's assertion that cable subscription rates have risen due to "excessively large" retranmission consent fee gains by broadcasters is way off base.
NAB cited a study it commissioned that concluded that programming costs were only a small percentage of cable operator revenues.
The study found that cable operator profits had risen by five times as much as their programming expenses, from $48.96 per sub per month in 2003 to $62.99 in 2006, an increase of $14.03 or 29%. By comparison, said the study, "[d]uring that same period, programming expenses per subscriber per month increased from $15.63 to $18.47, an increase of $2.84 per subscriber per month or just 18%."
"With cable's profits rising five times as much as their programming expenses, it is absolutely illogical to claim that retransmission consent plays a significant role in the continued escalation of cable subscription rates," said NAB Executive VP Dennis Wharton in a statement.
NAB added that the study also found that a household was 10 teims as likely to experience a cable outage as to have its channel dropped due to a retrans dispute.
"The ‘study’ is based on data that the NAB collected from four large publicly traded cable operators that each serve many millions of customers," ACA president and CEO Matthew M. Polka said in response. “Because no ACA member was included in the portion of the NAB study that compared programming costs to profits, it's an irrelevant response to ACA’s May 7 release that documented excessively large retransmission consent gains by several local TV station groups.”
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