Networks raise fees on programming

FPB forced to increase rate for Classic Cable

The FPB Board of Directors was forced to approve a $3.50 increase in the Classic Cable rate. This is a direct pass-thru increase – meaning that FPB doesn’t keep that money. It goes directly to the networks on Classic Cable for increased programming costs.

Cable television has so much to offer. At any time of the day, you can find news, sports, movies, concerts, dramas, sitcoms, educational shows, documentaries, kid’s shows, and reality shows and contests.

All of this programming costs money.  And as the availability of content grows, so does the price.

The media conglomerates (seven companies own nearly all of these networks) that provide this content raise their prices to cable providers like FPB every year. That’s what drives this increase.

For example, the media company responsible for about 25 percent of the price change is Disney/ESPN. Sports programming is a major offender. The fans pay the salaries associated with those high-paying athlete contracts. When a sports franchise announces a new TV deal, that means more money coming from the pockets of subscribers. The networks raise the rates to pay for these deals, and cable providers must raise theirs to cover the cost.

All pay-TV providers have had to accept significant price increases from programmers to carry their channels. It has been 24 months since FPB last asked for an increase in Classic Cable rates. FPB has absorbed as much of the increase as possible before passing it on to the customers.

In fact, in the past 16 years, while programming fees FPB pays to the networks has increased almost $61, FPB has managed to decrease operational expenses by more than a dollar per customer each month.

FPB only keeps 17 percent of your Classic Cable bill for operating expenses. This includes maintenance on the system, equipment and paying the cable installers to get you hooked up and serviced when needed.

The rest of your bill, 83 percent, leaves Frankfort and goes directly to the network programmers.

Rate increases for programming content are not unique to Frankfort or FPB. In the past two months, companies such as DirectTV, AT&T, Comcast, Charter and Dish have all raised prices for 2019.

Virtual operators such as DirectTV NOW, YouTube TV and Hulu Live have also either raised their prices or have announced coming increases.

Even Netflix isn’t immune to the increased cost of content. Their most popular plan will increase by nearly 20 percent next month – their third increase in the last three and a half years.

While the FPB Board of Directors would prefer to hold down costs for cable customers, it is committed to providing the programming customers demand. Unfortunately, that means setting rates to keep pace with the increase in the wholesale license fees that FPB must pay.

Classic Cable Programming and Operational Expense



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