With linear TV in steady free fall, networks are counting on the continued upswing of streaming. But it can't come fast enough. Financial losses for those services to be started up continue to eat into whatever profit remains from those legacy businesses.
So, do they have time to deal and attention to give to their sometimes tenuous, sometimes suffering TV station affiliates?Paramount Global and its CBS TV station affiliates ran into a renewal issue with a virtual pay TV provider FuboTV.
This is one where the network negotiates exclusively for its TV stations. But some stations complained they would not be getting a bump in those revenue fees. As a matter of fact, some station affiliates say carriage fees under the new deal will be lower than previous carriage deals.
Early on, these network-affiliate agreements allowed TV networks to negotiate with the virtual pay TV provider to quickly give TV stations more coverage.
TV stations are now complaining that the original system is not working. For its part CBS says stations are not obligated to go along. They can do their own negotiations if they choose to.
Still, in its current situation, if a market rejects Paramount's efforts, the company will instead provide FuboTV with a CBS network feed to fill that spot for that market.
All this got TV Watch thinking about the long and somewhat troubled history of network-affiliate stations -- now disrupted with TV networks' pursuit of all things streaming -- even if some of the deals carry local TV stations, abd even if they might share in some of those revenues.
But maybe TV networks' heavy focus on streaming is altering their longtime partnerships with affiliates.
With regard to the FuboTV deal, a CBS spokesperson says: “It appears that they are just trying to leverage our high-value CBS content to do so, which they don't have the rights to do.”
Increasingly independent TV station groups are looking to do their own thing -- taking on local/regional streaming businesses that need help in selling advertising time. In turn TV stations can package those deals with their local linear TV inventory, giving advertisers some much needed extra reach.
At the same time, TV station groups are trying to launch or promote their own locally based networks via local digital signals.
This doesn't mean that the network-affiliate relationship is over. Networks still benefit from local TV stations' promotional efforts that push viewership to the network-owned programming -- in prime time, daytime, late night, whatever.
But the push is coming mostly for its linear TV airings of those shows -- which have the other purpose of promoting the streaming airings of those shows. TV stations continue to also bet heavily on its local TV news content for its continued value.
Is all this enough to hold the TV network-affiliate relationship together -- for the long term?
Interesting subject, Wayne. It should be noted that about 65-70% of U.S. TV households receive broadcast station---and network ----content, either via "pay TV" or over-the-air reception and this percentage is not in a free fall situation as the OTA side is growing as the "pay TV" side shrinks. So, overall, there will be a continued decline but hardly a collapse. That can only happen when the bulk of broadcast TV content is available exclusively via streaming---which is not happening in the near future at any rate.
It's also important to note that the stations provide two very important components for the libraries of the broadcast TV networks' streaming ventures---local news and sports. These are firmly fixed in the minds of would be subscribers to AVOD or SVOD offers as defining at least part of the value of any of these streaming services---it's not only about expensive Hollywood "originals".
Nevertheless, it seems likely that the carriage fees paid to the stations by the cable and satellite dirtributors will decline as more viewing time is registered by streaming services so it behoves the stations to work with their networks to negotiate the best deals and part of this concerns how the proceeds are split between the stations and the networks. Currently it's about 50/50 ---but that might change ---in the networks' favor. Which means that the stations need to be thinking seriously about how they will recoup any loss in this vital income source in the near future. Competing more aggressiveley against ditital media on a local basis may turn out to be the key to this puzzle as there are few signs that national advertisers will be upping their relatively modest spot TV spending.