German cable and broadcasters face off over retransmission fees

German public broadcasters and cable operators are engaged in a struggle over the former’s growing reluctance to pay retransmission fees, ANGA Cable attendees heard this morning.

Karola Wille, managing director of regional public broadcaster Mitteldeutscher Rundfunk (MDR) told attendees at the opening panel session at the congress that it was not normal in other countries for broadcasters to pay cable operators for carriage. There were now multiple distributors of content and cable operators had to compete for content, she said. “We think this is a good point in time not to pay fees to the cable operators any more,” she said.

Kabel Deutschland chief operating officer Manuel Cubero retorted by saying that cable operators were an inexpensive infrastructure option for public broadcasters. ARD and ZDF paid €2 per home for access – much less than for satellite carriage or to use the digital-terrestrial platform. “We think we are the perfect partner for public broadcasters [and others],” he said. Pubcasters benefited from their enormous market power and from the imposition of must-carry rules, he said. Cubero said he was optimistic an acceptable deal could be reached, but cable was not willing to see this revenue stream disappear. “We hold the view that we are willing to negotiate,” he said. “Public broadcasters take enormous capacity in our network. They take 30% more capacity than private broadcasters taken together.”

Wille said that satellite and terrestrial platforms were different because there were no subscriptions from which platform operators could make money. All platforms received HD channels from public broadcasters and benefited from their content, she added.

Speaking on the same panel, Liberty Global president and CEO Mike Fries said that his company remained open minded about the issue. He said there were ways to renegotiate the business arrangements so that both cable and broadcasters were happy. He said that feed in fees were not unusual in other countries.
Conrad Albert, head of legal, distribution and regulatory affairs, ProSiebenSat.1 Media, said that it was not acceptable to have different regimes for public and private broadcasters and that any relaxation of retransmission fees for public broadcasters would mean that commercial players would be entitled to seek similar terms.