Streaming services dam up revenue for local cable access

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Streaming services dam up revenue for local cable access
Karen Henderson, general manager of Westborough TV, tapes the dedication of the new veterans’ monument at Minuteman Park on April 15. (Photo/Maureen Sullivan)

WESTBOROUGH – Cutting the cord from cable providers may save some money, but that action may leave local cable access studios with an uncertain future.

Executive Director of Westborough TV Karen Henderson came before the Select Board on May 14 to present what could happen financially over the next two to three years.

For Westborough TV and other local studios, the news is not good. As more consumers switch from cable to streaming services, revenue is declining. A portion of that revenue goes to local studios to provide local coverage and programs.

In WTV’s case, that means hundreds of hours’ worth of town board meetings, cultural events and sports; training for journalism students from Westborough High School and Assabet Valley Regional Technical High School; and producing business promotions, among other programs.

According to Henderson, the number of cable subscribers has declined 35% since 2015; and the revenue to WTV has gone down 24%.

WTV has a reserve fund, but that will be depleted by the end of 2026. Come 2027, WTV could be seeing a financial gap of $138,000.

Currently, Westborough TV receives no funds from local taxes. That could change should WTV be unable to find other sources of revenue, according to Henderson.

Westborough TV could raise some funds by selling its studio on West Main Street. According to the Assessors Office, the property is valued at $520,300. However, much of that funding would go to move, fit out a new studio, and pay rent.

One possible source is making its way through the legislature. The bill, “An Act to modernize funding for community media programming,” would establish a statewide policy on streaming entertainment services.

State Sen. Michael Moore (D-Millbury), the chair of the Joint Committee on Advanced Information Technology, the Internet and Cybersecurity, said the bill would establish a new funding source for local access television through assessment fees on streaming services.

The bill would create a “PEG Access Facilities Revenue Advisory Board,” comprising government officials, a community TV advocate and a telecommunications industry representative. The board will meet at least annually and will collect data on historical community access TV funding levels, historical revenues paid to community access TV by cable operators, and historical streaming service revenue generated by sales to Bay Staters.

Using the data, the board will file a report recommending a streaming service assessment rate that would provide each operator of a community access TV channel with at least the same level of total revenue as the historical average of the three highest years of revenue for each operator.

Within 30 days of the Department of Revenue receiving the report, the DOR would be required to set an assessment rate equal to that recommended in the report.

Streaming services will be required to pay the assessment rate of their gross annual revenue from sales to Massachusetts residents to the “Streaming Entertainment Fund,” which will allocate funds directly to local public access television programs.

According to Moore, the bill had been redrafted after it failed to gain support from the committee last year. In the redraft, the bill – S 2771 and H 4613 – is asking for a study group to determine the level of funding and a fee schedule.

“We didn’t have all the data,” said Moore of the original bill.

The bill was recently reported out of the joint committee, and is now with the Ways and Means Committee for the House and Senate.

For details on the bill, go to https://malegislature.gov/Bills/193/S2771/Cosponsor.

 

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