Every time I hear about a contract dispute between a cable/satellite company such as Comcast or Dish and a local ABC or FOX affiliate, I can’t help but wonder why there is even some large fee being paid to the station to essentially rebroadcast a signal that is being transmitted over the air and can be viewed for free. Why are the stations and their parent companies counting on cable companies to front their bills when in the past, there were no cable companies because over the air was the only option?
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A local TV broadcast is, after all, a business. They make money by selling advertisements. So do cable companies. As a convenience, and because many cable subscribers dont want to be bothered with switching inputs on their TV from cable to antenna, cable companies will often broadcast the local TV channels on their networks. But they have to pay the local TV companies for their content. What many people dont realize is that the cable company can insert their own advertisements during the local TV broadcast. That results in less revenue for the local TV broadcast company. So they are compensated with broadcast fees paid by the cable company.
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