TVREV

View Original

How US Broadcasters Might Stream More "Freely"

Last week's observations about the UK launch of the new Freely "streaming broadcast" service from that country's dominant terrestrial TV companies (ITV, Channel 4, Channel 5, and the BBC) raised a lot of eyebrows from readers - many of whom wondered: why can't American viewers access full broadcast channel feeds via streaming too?

After all, full US broadcast TV signals are already available for free to consumers via an over-the-air antenna. Wouldn't it be an audience-increasing no-brainer to also offer those signals through streaming CTV and mobile platforms - where the vast majority of American viewers now more conveniently "watch TV" - instead of requiring a linear MVPD pay TV subscription, adding a separate/parallel/clunky antenna integration, or settling for local newscast-only FAST-channel approximations?  

Of course it would.  But the major (ABC, CBS, NBC, Fox, Univision, Telemundo, CW, and even PBS) broadcast networks' increasingly outsized reliance on wholesale retransmission consent fees (or "retrans") from cable, satellite and virtual MVPD pay TV bundle providers as their main revenue source means that streaming live feeds for free online is an immediate non-starter - even as the number of pay TV subscribers continues to fall precipitously.

Longer term, however, that strategic stance looks specious; milking more broadcast retrans fees out of a declining pay TV subscriber base is not a recipe for growth - instead, it is indicative of secular decline.  Add in the fact that most broadcast networks liberally populate their parentally owned-and-operated subscription streamers with the very prime programming once held exclusively for their affiliated local stations, and the idea of paying (additionally?!) for linear TV makes even less sense.

Interestingly, there has been evidence of real consumer appetite in the US for a direct-to-consumer streaming app version of a local market's full broadcast TV channel offerings - one that essentially replicates the traditional OTA live/linear local station lineup (including low-power signals and diginets) into something akin to a "broadcast bundle" - when such offerings have been made available directly to consumers.

Although innovative DTC streaming services such as Aereo (2012-2014) and Locast (2018-2021) ultimately ran afoul of US TV copyright restrictions (each for different reasons, and both after withering legal pressure by the broadcast industry lobby), each managed to attract significant interest from consumers (Locast: ~3MM subscribers across 36 markets; Aereo: ~100K in limited portions of three) - enticed by the allure of unfettered access to (ostensibly) free broadcast television that featured dependable reception, digital flexibility, and a low/reasonable price for the convenience of not having to grapple with an OTA antenna setup. (With apologies to Antenna Man!)

Didja, Inc./Local BTV

More recently, the scrappy Local BTV “virtual OTA” service from Los Altos, CA-based Didja, Inc. has been beta-ing away with a new subscription streaming broadcast DTC service in 50+ US DMAs, offering scores of local TV signals, broadcast diginet feeds, and even cable public access-like "hyperlocal" channels with a legally copacetic twist - asking for "must-carry" permission and/or seeking retrans consent deals. 

Didja, Inc./Local BTV

Despite genuine interest from numerous broadcast affiliate station group owners, it's been a tough slog to convince any of their "major" network partners to strike deals - even though the business rationale, consumer value proposition, and even regulatory appeal of a broadcast-bundle-as-app is obvious:

  • Meeting "TV" viewers where they already are - streaming;

  • Ensuring full-market broadcast TV access to millions of disenfranchised consumers with challenging OTA antenna reception issues (distance, geography, terrain, urban density, etc.);

  • Increasing total viewership (and ad revenue) of broadcast stations and their network fare - far beyond disparate newscast-only FAST channels;

  • Preserving/strengthening the network affiliate model for the digital era, aligning/integrating stations with network SVOD streaming services - and extending existential retrans economics into a DTC model;

  • Enabling broadcasters to pursue direct economic relationships with consumers for the first time - including subscription revenue, targeted digital-like advertising, retail/shopper loyalty integration, etc.  

  • AND, creating an immediately tangible strategic pathway (and consumer "training wheels") for the eventual arrival of full-fledged NextGen TV features to come in the years ahead.     

Can US local broadcasters and their network programming patrons get out of their own way and glean some innovation inspiration from their brethren across the pond - and potentially ensure their survival and relevance in the process?  The technology is in place - is the industry's strategic fortitude?
+ + +

Local News To Peruse: