THB #383: A Brief History (& Forecast) of TV Delivery

50 years ago, there was Broadcast Television… and it was good.

THE BROADCAST ERA, ends mid-1970s

There were only 3 national broadcast networks at the time. ABC was a big step behind CBS and NBC, but it would become an equal in the 70s. Fox Broadcast Company wouldn’t launch until October 1986, just 36 years ago.

50 years ago, there were was no “home entertainment” as such. No VHS, no DVD, no internet. Reruns and syndication. Current movies ran for months and months (sometimes over a year) and would be slotted in for an appearance on a broadcast network (if big enough) and then in to late night slots on network affiliates or perhaps an independent and/or UHF channel.

I should stipulate here, as in all these eras, that there were small exceptions within each of these eras. But this is a look at the broad picture.

THE FIRST CABLE ERA, ends 1992

Cable really came into its own in the mid-70s and through the 80s.

It was closely regulated by the FCC and had must-carry requirements. City by city, deals were made to lay down the cables and service the communities… another set of rules. This included pricing. And public service.

Every local broadcast tv station in every market was required to be carried, which changed the value of independent and UHF stations, as channels like Home Shopping Network were built out nationwide, local station by local station at first.

Aspiring companies would do things like buy baseball teams or make major league sports deals to assure they were considered must carry… if you want to see the Braves, you needed TBS. If you wanted to see the Cubs, you needed WGN.

Getting a slot on a cable network was a goal and getting a better slot on the ever-growing channel numbering was an obsession.

THE SECOND CABLE ERA, starts 1992

“Retransmission consent is a provision of the 1992 United States Cable Television Consumer Protection and Competition Act that requires cable operators and other multichannel video programming distributors (MVPDs) to obtain permission from commercial broadcasters before carrying their programming.” (ht/wikipedia)

What does this mean in English? After more than 15 years of cable being closely regulated and dominated by governmental agencies, with those companies wanting slots on the cable box for their new networks kissing up to the approved cable companies, the tables were turned and now, the cable companies had to pay all those local tv stations for being on their systems.

In 1990, the Washington Post wrote about increasing cable pricing, with the basic package of 58 channels rising to $21.78 and the average cable bill in Montgomery County, MD rising to $41.

An FCC statement said, “From 1995 to 2005, cable rates have risen 93%. In 1995 cable cost $22.37 per month. Communications Daily has reported that prices for expanded basic are now about $50 per month.” (That would be expanded basic cable.)

Here is an FCC chart covering 1995 -2016…

But the number driving that expansion in the cost of expanded basic service was not just retransmission, which only covers the broadcast channels that are being carried on cable/satellite. A bigger load is “carriage fees,” which is what is charged to able/satellite providers for non-broadcast channels, from USA to ESPN and beyond… over 150 channels on average.

You’ll notice that not only did the prices grow significantly, the number of channels grew even more aggressively. Giving large companies more cable slots was a part of the way cable held back retransmission insanity for a long time.

As this all worked itself out over the years, cable providers had to find profit in the side hustles - charging for multiple TVs or HD or insurance, etc - instead of making much if any money on bringing us the content itself.

THE LAST CABLE ERA, starts 2018