If you live in a rural area, chances are that your local TV stations aren’t on the internet—and probably won’t be for a while. That’s likely because smaller broadcast stations don’t have the cash to buy the equipment necessary to put broadcasts onto the internet.
But this situation may soon change if consolidation in the market moves forward.
Indeed, the issue of smaller market affiliates lacking the necessary technology, and sometimes skills, for streaming has surfaced as more virtual MVPDs like Sling TV, DirecTV Now and the recently launched Hulu live TV work to bring local network affiliates onto their platforms.
“There is the technology integration piece, which we’ve found gets harder as you go from major markets from smaller markets,” Ben Smith, head of user experience at Hulu, told The Verge.
As the report points out, many smaller market affiliates of NBC or CBS are still using legacy broadcast workflows. In particular, Hulu told The Verge about one station where a guy was pressing a button for commercial breaks.
With that kind of antiquated technology and uneven funding for stations, it will take a long time to get all the ducks in a row for true nationwide streaming. For vMVPDs like Hulu, it may be a case of wait and see.
“It’s not actually our job. For the owned & operated stations, the networks could work with the stations to implement whatever they need to deliver OTT and conform to whatever metadata needs the network needs,” Hulu CTO Tian Lim told FierceBroadcasting, adding that Hulu doesn’t get much visibility into how it works for non-O&Os or station groups. “However, everybody’s pushing to get all those guys onto the internet and we’re lighting up channels every single week.”
Alan Wolk, independent media analyst, said it is likely vital for smaller stations to get their content onto streaming platforms and in front of new audiences or risk endangering their futures.
“In some markets the smaller stations will get smart and figure something out, and some of them will fade away,” Wolk said.
But he said that it’s not cheap to buy end-to-end streaming solutions from vendors like Anvato and Ooyala, and upkeep of that is not inexpensive either.
In order to help move local stations onto the internet, the major networks have begun signing affiliate deals to help negotiate terms for local network carriage on streaming services. ABC introduced Clearinghouse, a program intended to allow ABC to negotiate streaming deals for its affiliates. CBS reached an opt-in agreement for streaming services with the CBS Affiliates Board. NBC and the NBC Television Affiliates Board have a new deal that will allow local TV broadcasters to opt in to NBCUniversal’s carriage agreements with new OTT streaming services and for TVE distribution rights.
But opt-in affiliate agreements are only one piece of the puzzle. Smaller stations still need the ability to ready their content for streaming platforms. And perhaps that’s an area where broadcast consolidation could help.
Consolidation to the rescue
Sinclair’s recently announced $3.9 billion blockbuster deal for Tribune Media certainly has its critics. Anti-consolidation groups have managed to make enough noise to get the D.C. Court of Appeals to temporarily block the reinstatement of the UHF discount, the broadcast ownership rule upon with the Sinclair-Tribune deal’s hopes likely hinge.
But if there’s fear of how massive broadcast groups like Sinclair and Nexstar Media—which this year completed a large-scale merger with Media General—could wield their scale and influence, there should also be hope for how broadcast megapowers could help drive forward innovation for an industry competing with pay-TV, broadband and wireless providers.
For Sinclair, the Tribune merger will better enable Sinclair to build out the ATSC 3.0 next-generation broadcast platform, advanced services, scale emerging networks and national sales, and integrate content verticals. The company said the merger will also create synergies through operating efficiencies, revenue streams, programming strategies and digital platforms.
For what it’s worth, Sinclair sounds like it wants to use those advantages to better serve communities, be it through OTA broadcast or streaming.
"Television broadcasting is even more relevant today, especially when it comes to serving our local communities. Tribune’s stations allow Sinclair to strengthen our commitment to serving local communities and to advance the next-generation broadcast platform. This acquisition will be a turning point for Sinclair, allowing us to better serve our viewers and advertisers while creating value for our shareholders,” said David Smith, executive chairman of Sinclair, in a statement (PDF).
Smaller broadcasters likely have some time to prepare for the streaming world as local affiliate deals for streaming services will likely follow a top-down approach, with services going after the largest markets first. But eventually all TV stations will be called upon to join the OTT world, and if they’re not ready, they could be left behind. Aligning themselves with broadcast groups with better scale and funding could be a solution to that problem.—Ben | @fiercebrdcstng