For more than 60 years, TV stations have broadcast news, sports and entertainment for free and made their money by showing commercials. That might not work much longer.

The business model is unraveling at ABC, CBS, NBC and Fox and the local stations that carry the networks’ programming. Cable TV and the Web have fractured the audience for free TV and siphoned its ad dollars. The recession has squeezed advertising further, forcing broadcasters to accelerate their push for new revenue to pay for programming.

That will play out in living rooms across the country. The changes could mean higher cable or satellite TV bills, as the networks and local stations squeeze more fees from pay-TV providers such as Comcast and DirecTV for the right to show broadcast TV channels in their lineups. The networks might even ditch free broadcast signals in the next few years. Instead, they could operate as cable channels — a move that could spell the end of free TV as Americans have known it since the 1940s.

“Good programing is expensive,” Rupert Murdoch, whose News Corp. owns Fox, told a shareholder meeting this fall. “It can no longer be supported solely by advertising revenues.”

Fox is pursuing its strategy in public, warning that its broadcasts — including college football bowl games — could go dark Friday for subscribers of Time Warner Cable, unless the pay-TV operator gives Fox higher fees. For its part, Time Warner Cable is asking customers whether it should “roll over” or “get tough” in negotiations.

The future of free TV also could be altered as the biggest pay-TV provider, Comcast Corp., prepares to take control of NBC. Comcast has not signaled plans to end NBC’s free broadcasts. But Jeff Zucker, who runs NBC and its sister cable channels such as CNBC and Bravo, told investors this month that “the cable model is just superior to the broadcast model.”

The traditional broadcast model works like this: CBS, NBC, ABC and Fox distribute shows through a network of local stations. The networks own a few stations in big markets, but most are “affiliates,” owned by separate companies.

Traditionally the networks paid affiliates to broadcast their shows, though those fees have dwindled to near nothing as local stations have seen their audience shrink. What hasn’t changed is where the money mainly comes from: advertising.

Cable channels make most of their money by charging pay-TV providers a monthly fee per subscriber for their programing. On average, the pay-TV providers pay about 26 cents for each channel they carry, according to research firm SNL Kagan. A channel as highly rated as ESPN can get close to $4, while some, such as MTV2, go for just a few pennies.

With both advertising and fees, ESPN has seen its revenue grow to $6.3 billion this year from $1.8 billion a decade ago, according to SNL Kagan estimates. It has been able to bid for premium events that networks had traditionally aired, such as football games. Cable channels also have been able to fund high-quality shows, such as AMC’s “Mad Men,” rather than recycling movies and TV series.

That, plus a growing number of channels, has given cable a bigger share of the ad pie. In 1998, cable channels drew roughly $9.1 billion, or 24 percent of total TV ad spending, according to the Television Bureau of Advertising. By 2008, they were getting $21.6 billion, or 39 percent.

Having two revenue streams — advertising and fees from pay-TV providers — has insulated cable channels from the recession. In contrast, over-the-air stations have been forced to cut staff, and at least two broadcast groups sought bankruptcy protection this year.

Fox illustrates the trend: Its broadcast operations reported a 54 percent drop in operating income for the quarter that ended in September. Its cable channels, which include Fox News and FX, grew their operating income 41 percent.

Analyst Tom Love of ZenithOptimedia said he expects the big networks will end the year with a 9 percent drop in ad revenue, followed by an 8 percent drop in 2010 and zero growth in 2011.

A small chunk of the ad revenue is being recouped online, where the networks sell episodes for a few dollars each or run ads alongside shows on sites such as Hulu. Media economist Jack Myers projects online video advertising will grow into a $2 billion business by 2012, from just $350 million to $400 million this year.

But that is not significant enough to make up for the lost ad revenue on the airwaves. Advertisers spent $34 billion on broadcast commercials in 2008, down by $2.4 billion from two years earlier, according to the Television Bureau of Advertising.

So rather than wait for the Internet to become a bigger source of income, the networks and local stations are mimicking what cable channels do: They’re charging pay-TV companies a monthly fee per subscriber to carry their programming.

Since 1994, the Federal Communications Commission has let networks and their affiliates seek payments for including their programming in the pay-TV lineup. Not everyone demanded payments at first. Instead they relied on the broader audience that cable and satellite gave them to increase what they could charge advertisers.

The big networks also were content to let their broadcast stations essentially be subsidized by higher fees for the cable channels that fell under the same corporate umbrella. A pay-TV company negotiating with the Walt Disney Co., which owns ABC, is likely paying more for the ABC Family channel than it otherwise would, with the extra assumed to help Disney cover its costs for the ABC network broadcasts.

But over time — such contracts generally run about three years — more networks began demanding payments for the stations they own. And affiliates already receiving the fees have bargained for more money.

Some talks have been tense. In 2007, Sinclair Broadcast Group, which operates 32 network-affiliated stations around the country, pulled its signals for nearly a month from Mediacom Communications Corp., which provides cable TV to about 1.3 million subscribers, mainly in small cities.

The American Cable Association says its members — mainly small cable TV providers — have seen their costs for carrying local TV stations more than triple over the past three years. The group’s head, Matt Polka, says those fees have gone “straight to consumers’ pocketbooks” in the form of higher cable bills.

Gannett Co., for instance, which operates 23 stations, has taken in $56 million in fees from pay-TV operators this year after negotiating a new batch of agreements, up from $18 million in 2008. Dave Lougee, president of Gannett’s broadcast arm, defends the fees, saying “broadcasters were late to the game in really starting to go after the fair market value of their signals.”

Analysts estimate CBS managed to get as much as 50 cents per subscriber in its most recent talks with pay-TV providers that carry CBS-owned stations. CBS Corp. chief Leslie Moonves said such fees should add “hundreds of millions of dollars to revenues annually.”

That could be just the beginning. CBS and Fox are also asking for a portion of the fees that their affiliates get, arguing that the networks’ shows are what give local stations the leverage to ask for fees.

Over time, the networks might be able to get even more money by abandoning the affiliate structure and undoing a key element of free TV.

Here’s why: Pay-TV providers are paying the networks only for the stations the networks own. That amounts to a little less than a third of the TV audience, which means local affiliates recoup two-thirds of the fees. If a network operated purely as a cable channel and cut the affiliates out, the network could get the fees for the entire pay-TV audience.

If forced to go independent, affiliates would have to air their own programming, including local news and syndicated shows.

Fitch Ratings analyst Jamie Rizzo predicts that at least one of the four broadcast networks “could explore” becoming a cable channel as early as 2011.

Any shift would take years, as the networks untangle complicated affiliate contracts. At an analyst conference last year, CBS’s Moonves called the idea an “a very interesting proposition.” But he added that it “would really change the universe that we’re in.”

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On August 7th Dish Network will be officially rolling out a major channel expansion in Puerto Rico, including a new HD package that contains 33 high definition channels.
The news of this major expansion into Puerto Rico was announced to Dish Network retailers earlier in the week.
The new High Definition channels coming to Puerto Rican Dish Network customers include: A&E, Animal Planet HD, Bravo HD, Cartoon Network HD, CNBC HD+, CNN HD, Comedy Central HD, Discovery Channel HD, Disney HD, Disney XD HD, Espn2HD, Food Network HD, FX HD, HDTV HD, History HD, Lifetime HD, MTV HD, Nick HD, Spike HD, TBS HD, TLC HD and The Weather Channel HD.
Also coming soon is a 6 channel Spanish HD package and will feature channels like Discovery HD and National Geographic HD with their audio in Spanish.
Dish is also planning on introducing a new 30-inch satellite dish for use in Puerto Rico that will come complete with a printed with the flag of Puerto Rico printed on the Dish.
Dish Network claims that no one else will provide more HD to the island then they will, in addition Dish told retailers that more HD for Puerto Rico is to come.
Getting Ready For CES
The 2010 Consumer Electronics Show is still 6 months away but already I find myself getting ready for it. Last week I submitted my Alumni credentials and got myself fully registered and now I am already planning out my plan of attack when I land in Las Vegas in January.
My mind wonders of what exciting new satellite news I will hear and what new technologies I will see.
I am sure Dish Network will be there with the amazing Slingloaded ViP 922 HD DVR which they announced last year. I have been following the progress of this amazing receiver closely over the past 6 months and from what I have seen this is going to be an amazing receiver when it’s released. While Dish is hoping to have it released in time for a holiday release, I don’t believe we will see it available until after the CES show. A device this jam packed with features needs to be polished so that it really shines.
I may pick on Dish’s advertising, but honestly the Dish DVR’s are the best DVR’s on the market, it is the Dish DVR’s that keep me tied to Dish Network as no other DVR comes close.
And speaking of DVR’s I am hoping that this year we will see the long awaited DirecTV MPEG4 HD DVR with TIVO technology finally shown off. As much as I love my Dish DVR’s I know there are a lot of people who prefer the TIVO software on their DVR’s.
Back in September of 2008 DirecTV and TIVO announced this new DVR and TIVO fans everywhere have been waiting for this DVR with baited breath. I am hoping at CES we will finally get our first look at the new unit. Since being announced in 2008 there has been nothing more announced about the unit, there have been no mock up photos, no initial screen shots… nothing. Let’s hope we see this DVR at CES.
I also hope that DirecTV themselves is at CES this year. The nations #1 satellite provider has been absent from the CES show floor the past 2 years. I really hope they are there this year. I am a person who enjoys putting a face with a name and events like CES are one of the few events where I can meet face to face with the folks who make this whole industry work.

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Many people when they buy a free to air satellite receiver such as a Conaxsat Nano, Sonicview 360 ELITE or others are in a good position to make the learning curve understand how to setup your FTA Receiver easier then ever!

GoodFTA would like to announce our new Youtube Channel at http://www.youtube.com/user/GoodFTA

We show you everything you need to know about setting up a FTA Receiver, Scanning your channels and loading FTA FILES on your
receiver.

We making Free to air easy by walking you through set by step from beginning to end!

This is a service we provide free of charge to the FTA Community to help provide the very best FTA Support that we possibly can.

Members of our FTA FORUM can gain exclusive benefits such as more videos, live support chat, and the largest online database of guides, tutorials, setup techniques and fta files on the planet. We cover all FTA RECEIVERS!

Join us today!

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At long last, AT&T this week officially launched its CruiseCast in-car satellite service, boasting 22 video channels and 20 audio channels.

According to the telco, the service, which is part of a joint venture between AT&T and Raysat Broadcasting, includes content from USA, CNN Mobile, SciFi, Adult Swim, Discovery, Lifetime, Animal Planet, ESPN and others and costs $28 per month. The hardware itself retails for $1,299 and includes an antenna and an in-car “set-top box” device.

So far, about 600 retailers have signed on to to carry the CruiseCast hardware and sell subscriptions, and car makers are reportedly considering offering the system as a factory installed option on some new vehicles.

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A number of forums for satellite enthusiasts have emerged as the unlikely targets for Distributed Denial of Service (DDoS) attacks over the past few weeks.

A DDoS attack attempts to flood the server hosting the site with junk requests, forcing the server to become overwhelmed and freeze up.

The source of the attack is usually a botnet of compromised computers known as zombie PC’s.

Techwatch itself was targeted repeatedly, experiencing spikes of over 2GB per second, before a solution was put in place.

Other major satellite forums have also apparently been targeted with denial of service floods over recent weeks.

S*tellites.co.uk, als*t.co.uk, and s*tpimps.com are other major satellite forums that were reported to have been attacked over March, as well as smaller boards such as s*t-haven, and d*nktenk.com.

When Techwatch was first attacked by repeated DDoS floods in February, messages posted to the forums from anonymous proxies suggested that extortion was the primary motivation.

However, there have been no such demands with the more recent wave of attacks over March.

This and the fact that it appears to be satellite forums specifically targeted has led some to suggest that one or more companies within the satellite industry itself may be responsible, even though DDoS attacks are considered a criminal offence in the UK.

In the meantime, all of the larger forums including Techwatch have taken different steps to minimise disruption caused by the DDoS attacks, and so far each appears to be staying online.

It remains to be seen if any identifying information on the attackers can be traced through continued monitoring of the situation.

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WASHINGTON (Reuters) – The U.S. government and four states sued Dish Network Corp on Wednesday, accusing the satellite television provider of assisting its authorized dealers in calling consumers with recorded telemarketing messages.

The marketing calls were made to some consumers who signed up for the Federal Trade Commission’s national do-not-call registry to fend off unwanted sales pitches, the agency said.

“Because a few bad actors still don’t get it, we want to make it crystal clear. If you call consumers whose numbers are on the Do Not Call Registry, you’re breaking the law,” said Eileen Harrington, acting director of the FTC’s consumer protection unit.

Dish Network said the company obeyed the law and should not be held responsible for violations by independent retailers.

“An independent audit demonstrates that DISH Network is in compliance with ‘do-not-call’ laws, has proper controls in place, and is well within the safe-harbor provisions of the law,” the Englewood, Colorado-based company said in a statement.

“We also believe that the FTC is equating merely doing business with an independent retailer to ‘causing’ or ‘assisting and facilitating’ violations by that retailer,” Dish Network said. “We look forward to resolving these differences of opinion through the judicial process.”

The FTC said the lawsuit was filed in federal district court in Springfield, Illinois and was joined by state attorneys general from California, Illinois, Ohio and North Carolina.

The federal lawsuit seeks to stop Dish from making the calls either directly or indirectly through its dealers, asks for unspecified civil penalties and asks that the company be required to enforce compliance with the do-not-call registry regulations. Two other related lawsuits were also filed against two of Dish Network’s authorized dealers, the agency said.

The FTC’s do-not-call registry became effective in 1995, allowing consumers to register their telephone numbers without charge. Telemarketers can access the registry via the Internet but are prohibited from calling the phone numbers.

Dish provides service to more than 13.7 million satellite television customers.

Federal Trade Commission v Dish Network, U.S. District Court, Central District of Illinois, No. 09-03073.

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DISH Network customers who tune to Channel 100 will be able to use the new Fandango application available through their television set. In fact, subscribers will be able to purchase tickets securely using just their remote control and the application will use the customer’s zip code to search for nearby theaters and showtimes. After your tickets are purchased you need only show the credit card used to purchase the tickets in order to pick them up at the movie theater. There’s no confirmation codes to remember.

The new Fandango iPhone application will offer users many of the same abilities. The free application will not only allow users to view movie listings at nearby theaters, but will allow movie fans to get information on movies which are “Coming Soon”. This includes the ability to watch trailers and read a synopses of the movie.

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The modern-day pirate doesn’t sport a patch or walk with a limp.

His weapon of choice is an unassuming, pizza-sized satellite dish that can literally harpoon signals from space – and provide lucrative and illicit profit.

And it’s happening across the country. The Canadian Motion Pictures Distribution Association estimates that the total loss to the industry from satellite piracy in 2001 alone was about $1 billion – and that number is likely far higher today.

But lately, satellite companies, including Bell ExpressVu and U.S.-based DISH Network have been fighting back. The companies are switching to a tough new encryption system while using the threat of court action to target end users.

“We take this very seriously and we have taken a number of actions to counter signal theft,” Bell spokesperson Julie Smithers said. Satellite companies like to remind users that theft of signal not only means less subscription revenue for providers, but a fall in ratings for stations which translates into lost advertising revenue, and for artists who are given a portion of profits from subscriptions through the Canadian Television Fund.

Los Angeles-based media analysts The Carmel Group estimates there are at least two million illegal television households in the U.S. and Canada, out of a universe of about 15 million legal households. And the number is growing exponentially.

In the digital age, pirates are likely to look a lot like James, a middle- aged Toronto engineer with two children who happens to enjoy watching the Tennis Channel.

“I can’t believe I was actually paying for cable before,” he enthuses. James has access to a universe of more than 200 channels, including current pay-per-view movies that are only available at the video store for a cost. Last summer he put up a second satellite at his cottage, with a dish and receiver from a computer store in downtown Toronto that he purchased for less than $200.

James is currently watching a live tennis match in his living room which is decorated with trophies from his local club. Flipping through channels on a black set-top box reveals that he has fully unscrambled access to dozens of Hollywood movies (currently playing are The Dark Knight and Milk) for which legitimate subscribers have to pay up to $5.99 each.

At the heart of the problem are “Free To Air” satellite receivers that are widely available throughout Canada. While the possession of the equipment is not a crime, modifying it to access subscription signals is.

Free to Air is a system widely available in Europe, where television and radio broadcasts are typically sent unencrypted. There are some 250 Free to Air channels in North America, typically for ethnic programming.

“The way piracy works in North America is when consumers turn their Free to Air receivers into Free to Air units that steal,” says a Carmel Group report.

A USB port on the system allows consumers to change the internal programming of the module after downloading software from the Internet.

“What the manufacturers and retailers are doing may not be illegal, but it is wilful blindness,” argues Luc Perrault, co-chair of the Coalition Against Satellite Signal Theft and a vice-president of the Weather Network. “These things are being imported by the container load into Canada and it’s a serious issue.”

The coalition, which represents Canadian cable and satellite providers is lobbying government to toughen laws against piracy, including harsher sentences for pirates.

There have been some charges, but they aren’t coming quickly enough for the industry. Chris Frank, vice-president of programming for Bell ExpressVu, says the company has “done everything to ensure the integrity of our platform. Secret services around the world spend billions of dollars upgrading encryption systems to make sure their data is secure,” he told the Star’s Chris Sorensen last year. “We are a commercial company, we can’t spend billions, but we spend what it takes within reasonable bounds.”

Frank would not say how many people steal from Bell only that it was “speculative to try and figure it out. But the illegal reception is well within industry bounds.”

So far, Bell’s electronic countermeasures with a new encryption route introduced last November, seem to be working, blocking access to many channels. DISH Network is also in the process of migrating to the new system.

But hackers have been here before. Hacker groups are currently working on the new system, and some feel it is only a matter of time before the code is broken.

Meanwhile, one final route that would have a powerful deterrent effect is to go after consumers who steal signal.

In a get-tough policy, Bell has targeted end users by threatening legal action against customers who have been sold FTA receivers and are registered members of websites that promote piracy.

“We are contacting you because the operation or possession of illegal signal theft equipment to access Bell ExpressVu’s programming constitutes a violation,” says a letter sent to customers of a distributor selling satellite equipment.

The letter states that Bell is willing to drop legal proceedings if the user pays a $1,000 fine and hands over the equipment to Bell.

But the new tactics aren’t scaring some pirates.

“They’ll have to pry the remote control out of my hands before I give it up,” says James.

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Testifying before a congressional subcommittee on Tuesday, senior executives of DirecTV Group Inc and DISH Network Corp said that proper incentives would make satellite television companies willing to extend local service to underserved and rural areas.

Lawmakers are debating whether to renew a law that gives the two national satellite television companies the right to carry and retransmit broadcast television content.

Some in Congress say any renewed law should require companies to provide local service in all of the nation’s 210 designated market areas.

Rick Boucher, who chairs the House communications and technology subcommittee, said rural residents in about 30 markets cannot currently receive local news and weather programming via satellite subscriptions.

Charles Ergen, CEO of DISH Network, said his company is willing to provide the local programming if it receives assistance in funding the technical fixes needed for retransmission.

Ergen said that local TV stations should be required to allow the retransmission at no cost, or for a fixed royalty rate. And stations without truly local content, a number Ergen estimated at 15 to 20 percent, should be excluded from retransmission requirements, he added.

“We would love to be able to do it with the right incentives,” Ergen said.

However some stations have been increasing their rates, according to DirecTV Senior Vice President Bob Gabrielli.

“Broadcasters now routinely demand fees three times those previously paid. And it does not appear that this additional money is being used to provide more or better local programming,” he told the subcommittee.

“Many broadcasters are producing less and less local news.”

Representative Bart Stupak (D-MI) expressed frustration with the firms, saying residents of his hometown of Marquette did not have access to local content such as school closings, despite pledges that the situation would be resolved.

“All these promises that we get from these guys, but you never seem to fulfill it,” said Stupak, who has introduced a bill requiring satellite TV companies to carry local broadcasting in all markets.

Boucher said the law being considered for renewal was established to help satellite television companies compete against cable network operators and to give consumers more programming alternatives.

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