Every broadcast channel has had their share of fights to get retrans fees from the cable providers. For those who dont understand, historically, broadcast tv channels (nbc, abc, cbs) generated their revenue from broadcast for free and selling ads. As ad dollars decrease a because of dvr, broadcast is looking to charge the cable service providers and anyone who carries their channels much like the cable channels. Here is Disney's Recent Fight. Much like the record industry tries to squeeze out revenue with advances from music sites, broadcast is trying to save their industries through retrans fees. However, if ad spending disappears, these fees will not sustain the business.
The risk is what it can do over the long run: debundling. As these standoffs continue to occur with the large cable providers, one of these games of chicken will result in someone pulling content and trying to distribute it independently (through premium online content). The first few efforts will be successful as people would pay $2-3 a month for abc so they can have lost and other content (assuming its pulled off the web and integrates local advertising). However, the first domino will cause more content providers to provide premium online only content creating a price war and potentially reducing the power of the cable providers (especially with the advent of wireless televisions). However, over time, pricing competition for premium channels and online ads will shrink the size of the market, for it will lack power of forcing price on the consumer. All because of the initial fight on retrans fees.
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