Commentary

Fox, Affiliates Fight Over New OTT Service

TV networks have always found ways to glean more from TV station affiliates -- money, leverage, promotion time -- all in exchange for some premium prime content.

So it probably isn’t surprising that negotiations stalled between Fox and its affiliates over deals it wants to make concerning network and local TV programming on live, linear OTT (over the top) digital TV services.

Fox will be offering a live national Hulu feed, where it will replace the affiliates' local news and syndicated programming with programming from Fox cable networks -- National Geo, Fox News Channel and Fox Business Network. The report comes from a Wall Street Journal story.

This move is affecting Fox TV affiliates in 70 markets, including TV stations owned by Sinclair Broadcast Group and Raycom Media.

Fox launched the national service -- temporarily -- because it has been unable to agree on the revenue split of the carriage fees from those digital streaming services with its affiliates. Fox may also place the national Hulu feed to run on AT&T's DirecTV Now.

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All this has reignited a troubling, longstanding theory: TV networks and their related TV production companies don’t need TV stations in for future digital media deals.

TV stations feel there continues to be a strong connection with their local viewers -- especially when it comes to strong news programming. That is leverage TV stations say has not been lost.

This is not likely to change for sometime. That is, until there is a decided shift of big advertising monetization, national TV and local TV revenues moving to premium digital video platforms, mostly live, linear digital TV services featuring a number of TV networks.

This assumption would also factor in a major change -- lower promotional value TV affiliates/stations brings to TV networks. TV stations are still key in driving TV viewers to network programming content.

When that happens -- and TV networks believe there is little connection between their programming channels and local TV viewing -- then perhaps more separation between TV stations and TV networks could occur.

1 comment about "Fox, Affiliates Fight Over New OTT Service".
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  1. Ed Papazian from Media Dynamics Inc, June 14, 2017 at 2:56 p.m.

    It's pretty hard to swallow the notion of such a powerful "local connection" between an independent station's 10PM local news---which reaches mostly older adults----and the Fox network's primetime fare. Does anyone think that because 3% of a local station's market---again, mostly oldsters---tunes in nightly to its 10PM news that this causes a huge reverse audience flow benefitting the Fox networks dramas, sitcoms and reality shows airing between 8-10PM? As for the idea that the networks will eventually decide not to air their shows on stations but go totally digital, that works only if there is more money in such a concept---based on audience tonnage and quality of audience--- not just for the network but also to make up for the huge profits that most major market ststions still earn---including the highly profitable network O&Os. Such decisions aren't made in a vacuum.

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About the Author

Wayne Friedman is West Coast Editor of MediaPost. You can reach Wayne at wayne@mediapost.com.