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Issue 10: March 9, 2020

Last week, we noted that YouTube TV would keep Sinclair's Fox RSNs and YES Network during negotiations. In its new deal, YouTube TV with Sinclair, YouTube TV kept most of its Sinclair sports networks but dropped YES Network, Fox Sports West, and Fox Sports Prime Ticket. This week, we'll discuss some of the implications of these chaotic back-and-forth negotiations and what they mean for cord-cutters. Read on to find out more in this week's Stream Report.

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Streamer's Spotlight: Sinclair and Other Broadcast Rights Holders Threaten Cord-Cutting

This week saw the end of YouTube TV and Sinclair's tense negotiations (for now). Sports fans can keep enjoying most of Sinclair's regional sports networks through YouTube TV, but the loss Fox Sports West and YES are a major hit. They're also a sign of more trouble to come for the future of cord-cutting as broadcast rights holders grapple to squeeze more money out of cord-cutting service providers and their customers.

Cord-cutting is getting more expensive

Recent data shows that cord-cutting is getting more expensive. In fact, in 2019, almost every cord-cutting service, from YouTube TV to Hulu with Live TV to Sling TV, all raised prices. The biggest price increase in the cord-cutting sphere was AT&T TV Now, which raised its rates by prices by 30% in 2019. Even the well-regarded, low-cost service Philo had a subtle increase of 25% after it dropped its $16 per month price tier.

The cost increases are coming from broadcast networks

The big question is "why?"

And the simple answer is "broadcast rights holders", and Sinclair, in particular. Sinclair and other rights holders like it love to play the

blame game

when blackouts occur, but it all comes down to money. Consumer Reports noted that traditional cable TV prices are going up in 2020, mostly due to the cost associated with providing programming to subscribers, primarily a factor of companies like Sinclair demanding more money.

Unfortunately, cutting the cord on traditional cable TV is not protection against cost increases. Streaming services like YouTube TV and Sling TV must also work out deals with broadcast rights holders, who, consequently, raise prices on everyone. Cord-cutting services are much cheaper, but unlike traditional cable, they're in a much more competitive space. They have less incentive to fight price increases than traditional cable companies, which typically operate in less-than-free markets.

The price-increase environment won't change until the law does

In a rather

prescient 2012 Forbes article

, Adam Thierer laid out a compelling reason why the current television market is far from a true free market. It comes down to the law. As Thierer explained, "When it comes to television programming, many layers of red tape still encumber this sector and prevent a truly free market in video programming from developing."

That red tape, in the form of the

Cable Act of 1992

, puts most of the power in the hands of the broadcast networks. The law allows OTA broadcast networks to demand payment from cable TV companies that carry their channels. They can, therefore, threaten to take away those channels if they don't receive what they believe to be fair compensation for those channels --- and can hold those broadcast networks as a bargaining chip in negotiations for other agreements, such as for sports.

While it's easy to point the finger at cable TV companies for hiking prices unnecessarily (and indeed, they are no saints), it's harder to make that claim on cord-cutting services. But when you factor in the power broadcast rights holders have at the negotiating table, it's easy to see why they continue to threaten the viability of the cord-cutting marketplace.

Prices are going to keep rising. And cord-cutters should expect more increases in 2020. Hopefully, the law changes to in favor of a true free market before they get too high.

This Week's Streaming Guide

1. HBO's 'Women of Troy' Dives into WNBA History

HBO offers an introspective on the women's basketball team that made a lasting impact on the WNBA. Watch

Women of Troy

TUESDAY on HBO at 9 PM EST. -

Flixed

2. HBO's hit show 'Westworld' Returns for Season 3

Westworld

is back for a third season, bringing with it more artificial intrigue. Watch SUNDAY at 9 PM EST on HBO. -

Flixed

News and Industry Developments

1. YouTube TV Loses New York Yankees and Many Others

In its new deal with Sinclair Broadcast Group, YouTube TV dropped Yankees' YES Network and Fox Sports West. -

Variety

2. Sling TV is Free This Week if you're a Returning Customer

If you used and dropped Sling TV in the past, you can try it again for free this week. Sling is offering service free for returning customers through March 15. -

Cord Cutters News