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Cable Goes Local for HDTV

March 30, 2007 | Author: Ibex Marketing

During the lead-up to the SuperBowl, we saw lots of local cable companies get in beefs over rebroadcasting the HD programming from local network stations. As I mentioned at the time, it makes sense to me that the owners of the local stations ask to share in the revenues earned by the cable companies for those rebroadcasts.

But what if the cable companies didn’t rebroadcast the local stations at all? That’s the idea behind a new breed of cable set-top boxes that go back to the future by adding a digital TV tuner. This lets the cable subscriber connect the box to rabbit ears or some other antenna, and get the broadcast stations directly over the air, for free. Not only do the cable companies not have to pay anything to the local stations — because they are not rebroadcasting — they also don’t have to set aside bandwidth for those channels. And the subscriber will likely get a better image for the local stations in the bargain.

Cable companies started by offering a better signal than subscribers could get from their own antenna, but that has changed now with digital television broadcasts. Either you get the picture or you don’t; there’s no snowy middle ground as is the case with analog signals. As a result, the benefit of cable has transformed into the delivery of more content choices, such as movie channels and on-demand programming. It makes sense for cable companies to strike back at local stations that want licensing fees; if this end run helps cable companies remain competitive with services from satellites and now the phone companies, it sounds like a good strategy.