Saturday, October 22, 2005

Abilene article offers insight into Nexstar-Cox agreement

What concession did Nexstar Broadcasting receive from Cox Communications that made it feasible to return its programming to Cox.
An article posted on the Abilene Reporter-News site Friday offers some insight. Two statements in the article are particularly revealing. Cox spokesman David Grabert says the agreement will not bring about an increase in cable rates. He also says Nexstar will not be paid on a per-subscriber basis.
"Grabert said the cable company compensates its broadcast stations through various deals, including favorable lineup placement, advertising rates and other agreements. He said the deal involving KRBC does not set a precedent for other broadcast stations."
Another Texas newspaper, the Sweetwater Reporter-News features the quote that may indicate just what concession Cox made:
"We highly value the local and national programming that the Nexstar and Mission stations deliver to our customers," said Debbie Cullen, Cox director of programming. "We are pleased to have reached this agreement with Mission and Nexstar, which meets all of our original objectives. The deal demonstrates that broadcasters and cable operators can reach terms that are mutually agreeable and in the best interest of consumers. Our innovative agreement provides for incremental value to all parties, while giving Cox the long-term rights to carry the primary analog and digital signals of the Nexstar and Mission stations."

It appears that mention of digital signals is the key to the agreement. A recent bone of contention between broadcasters and cable has been the reluctance of cable to carry every digital signal that will be offered. Cox agreeing to do this with Nexstar and Mission should open up a new source of revenue for the broadcasters.

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