Why Cable Programming Fees Go Up

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why cable programming fees go up

You are probably wondering, what are programming fees and how do they affect you? The price that a customer pays each month for TV services is determined by the fees that service providers have to pay to retransmit channels from programmers. These service providers, such as D & P Communications, pay a fee per household or business that has these channels available to them, regardless if it is viewed by each consumer or not. In most cases, the networks then dictate what channels need to be provided and what packages they are available in. As a result, programmers sometimes require less popular channels to be put into certain channel lineups because they are all owned by the same network.

These regulations set by networks, along with a rise in additional fees, increase the customers cost for video services. Negotiations with the networks occur every year to determine what service providers pay per subscriber. To offset some of these costs, companies have incorporated broadcast fees and sports programming fees.

Broadcast & Sports Fees

Local broadcast TV stations distribute their programming at no cost to homes in the area thanks to the federal government. Then, they charge a fee to service providers for this local programming. Service providers then charge a broadcast fee to cover the cost coming from these networks. A broadcast fee is a charge to retransmit the local stations to each subscriber.

In addition, sports programming fees are due to the sports networks charging fees to retransmit their channels as well. Any sports related stations are charging the service providers for all of their programming in order to air the content. If these fees are not paid or a contract negotiation is not resolved, the networks can force companies to remove their channels so they are no longer available to the service provider’s customers. The service providers have had rising fees to pay to provide these channels to the public, so the consumer’s broadcasting and sports fees are increasing each year as well.

Retransmission Costs

Retransmission fees allocated by networks can have an effect on all consumers that purchased a cable TV package with the included channels in their lineup. While these local channels are available by antenna to consumers for no additional cost, service providers are still being charged to retransmit these same channels and include them in the basic packages offered.

Conclusion

Unfortunately, the cost of programming hits the rural companies harder when they do not have the leverage to negotiate lower prices with each network like larger national companies do. Despite all this, we attempt to keep it as affordable as possible with increases in fees only when the contract negotiations require us to pay more to programmers.

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