Nomura Equity Research analyst Michael Nathanson, a one-time bull on big media stocks, turned sharply bearish in a research note yesterday, citing slowed growth in local and national TV advertising after the 2012 presidential campaign, declining cable subscriptions and the TV industry’s evolution into a “zero-sum game,” in which a show can only build an audience by taking viewers from somewhere else. But another zero-sum game in the TV business is about to get even hotter: that tug of war between broadcasters and cable and satellite providers over retransmsission fees. Yesterday, Time Warner Cable, Dish Network and a group of small cable operators, along with the Newspaper Guild and consumer groups, jointly sent a letter to FCC chairman Julius Genachowski asking the agency to crack down on local broadcast stations’ growing reliance on joint operating agreements that the groups claim diminish competition. While the groups behind the letter don’t all share the same agenda, the cable and satellite operators in the bunch are clearly concerned that the joint agreements are driving up retransmission fees by reducing MVPDs’ negotiating leverage with broadcasters. By going to the FCC, they’re now making a federal case out what had been an intra-industry dispute.
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