TV Station Blackouts: When Will Performance/Ratings Factor In?

Major TV station groups need to reevaluate their relationship with traditional and virtual pay TV providers. Should ratings performance now be a bigger factor?

Both DirecTV and Dish Network are having new retransmission deal issues with TV station groups Tegna and Nexstar Media Group, respectively.

Both those veteran U.S. satellite-based TV companies have had issues around subscribers departing due to cord-cutting, as well as programming costs that keep climbing.

The rapidly growing world of connected TV/OTT is not much fun these days for late arrivals. This is especially true for much of traditional media. The big question: How to transition to new platforms, which have yet to reach meaningful monetization, from declining, but still big-money-producing declining legacy media?

For TV stations, traditional pay TV retransmission fees continue to be a key revenue component -- all as core-advertising revenue keeps drifting lower.



At the same time, new virtual pay TV providers -- as well as other new digital TV content distributors -- Roku, Amazon Fire TV, Samsung and Vizio TV platforms -- aren’t yet bringing in the big bucks to TV stations.

So what to make of these negotiations stalls, leading to threatening and real blackouts? Do TV station groups find a more compelling way to go direct-to-consumer?

Leaving out pandemic disruptions for the moment, TV stations are still looking long-term -- perhaps what its new ATSC 3.0 standard brings to the party in terms of digital media-consumer friendly capabilities. But analysts says much of this is still -- at the moment -- pie-in-the-sky stuff.

From pay TV providers, maybe there is more of twist: performance and ratings factors.

For example, according to reports, Dish made it clear Nexstar Media Group’s WGN America’s “flagging ratings” over the last several years made it less worthy than Nexstar’s local over-the-air stations.

To be fair, Nexstar hasn’t owned the cable network that long; it was previously owned by Tribune Media. However, since taking over in  September, Nexstar invested big time in a prime-time, three-hour news block, “NewsNation.”

What comes next, when and if pay TV providers start questioning and negotiating around ratings of individual TV stations? Will that be good news?

1 comment about "TV Station Blackouts: When Will Performance/Ratings Factor In?".
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  1. Randall Bongarten from Bonten Media Group, December 7, 2020 at 2:15 p.m.

    In many ways the TV groups are just the middlepeople.  The networks have been aggressively jacking up the cost of programming to the affiliates.  They do not significantly adjust by station ratings.  The local TV share of programming (retrans) revenue has been declining for several years.  The networks themselves are not necessarily committed to the local TV distribution model preferring to maximize revenues/profits through whatever mix of distribution makes that happen.  Of course, the distributors have their own problems, so I think we will continue to see continuing blackouts and difficult negotiations until the market gets to some sort of equiilibrium...if it ever does.

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