The amount of money broadcast networks are collecting from both pay-TV distributors and their own affiliate stations for their content is growing faster than Wall Street had anticipated.
In a new report, Sanford C. Bernstein analyst Todd Juenger said CBS is anticipating revenue of $1 billion in 2016 from retransmission consent fees from cable and satellite operators and their own affiliates. CBS had previously said it wouldn't hit that number until 2017.
According to Juenger, that figure is based on a subscription fee of $1.22 per-month, per-subscriber from multichannel video program distributors (MVPDs) for the stations the network owns, including KCBS-TV Los Angeles. It also includes a 50% cut of whatever their affiliates get from MVPDs, which Juenger thinks will be the same price CBS gets for its stations.
Of course, whether every CBS affiliate, particularly those in small markets, will be able to squeeze MVPDs for $1.22 remains to be seen. If it can't and CBS has set 50% of what it is taking in as the price tag, some stations may have to reach into their own pockets to cover that cost. However, CBS may also agree to adjustable rates on so-called reverse compensation.