OPEN MIKE BY PRESTON PADDEN

Stations Need To Stream Their Signals Now

Stations need to begin streaming their live signals, and to offer streams of past programs, before the future passes them by. The first steps are to fashion a business model and secure the necessary rights from broadcast networks. It's in the networks' interest to extend those rights to affiliates, which are still the strongest distribution platform around.

Streaming video is a big part of today’s television experience and it will only get bigger. It concerns me to see the streaming phenomenon grow without the full participation of TV stations. To be blunt, I worry that local stations could miss out on the future of television.

The broadcast networks have jumped on the streaming bandwagon with their own “.com” sites and through deals with Hulu, Netflix, Amazon and others. That is great, but what about their traditional station partners?  Some networks, like ABC, allow local stations to sell some of the ads in network streams to viewers in the station’s local market. And some stations stream their local news. Unfortunately, these laudable, but fragmented, streaming initiatives are not the same as streaming the station’s entire signal.

Stations need to begin streaming their live signals, and to offer streams of past programs, before the future passes them by. The question is how to fashion a business model and how to secure the necessary rights.

Let’s start with how not to get there. Some advocates for stations have tried to make two particularly unpersuasive legal arguments.

First they argue that historical affiliation agreements between networks and stations already confer streaming rights on the affiliates. But, the basic grant of “first call” program rights in most of these agreements dates back to a time when the only “streams” around were those with trout in them.

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The second ill-considered argument is that the cable compulsory copyright license somehow confers on affiliates the right to stream all the programs on their schedule. The Copyright Office has soundly rejected this argument. In my opinion, the time spent on arguments like these is time wasted as streaming becomes entrenched everywhere except on TV stations.

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My suggestion is that instead of advancing strained legal arguments, stations should develop credible streaming business models and then engage in good-faith negotiations with their program suppliers, including the networks, to secure the necessary rights. Geo-location technology, like Syncbak, is available to appropriately limit a local station’s streams to its DMA. But stations first need to negotiate for the rights. And, the sooner the better.

If I were running a station, I would negotiate for exclusive live streaming rights for all of my programming. Then viewers in my market (including those who don’t subscribe to cable or satellite) could watch my station live on their iPads, Android tablets, smart phones and other devices, without needing to fight for the inclusion of VSB receivers in these devices, which is unlikely to happen anytime soon.

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In addition to exclusive live streaming rights, I would negotiate for non-exclusive streaming rights in the programs on my schedule subsequent to their live broadcasts. It is perfectly fine that the networks offer after-broadcast streams on their own “.com” sites and authorize Hulu, Amazon and others to do the same. But stations with credible business models should be able to offer consumers the same after-broadcast streaming opportunity on a non-exclusive basis.

If I were running a network, I would want my affiliates to participate in the streaming revolution. Stations are the strongest distribution platform in television — by a wide margin. Assuming that stations can develop streaming business models that generate revenue for their networks, it would serve the best interests of the networks to keep this great partnership going into the streaming future.

Unless I am missing something, there is the potential for a real “win-win-win” here for stations, networks and viewers. Unfortunately, there is also the potential for stations to miss out on the streaming future of television. That would be a crying shame.


Preston Padden is an adjunct professor of law at the University Of Colorado and a senior fellow at CU’s Silicon Flatirons Center. Previously he was an executive with Metromedia, Fox, ABC and Disney.


Comments (20)

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Colin MacCourtney says:

August 4, 2011 at 12:45 pm

Once again, Preston is a visionary who understands how TV broadcasters must modify their business and distribution model to assure their future prosperity.

    steve weiser says:

    August 4, 2011 at 4:14 pm

    Not really. There have been voices “crying in the wilderness” on this matter for at least three years that I am personally familiar with, at NAB, NATPE, and even BEA. The real problem with local stations streaming all their content is that it will ultimately be in the networks’ best interest NOT to negotiate anything with the local stations. Networks do not need local stations any more. They keep them only because of tradition and because they have their heads in the sand. At some point, one of the networks is going to wake up, drop its affiliates, and go directly to the consumer, thus getting all retrans fees and advertising time. Once that happens, the others will follow suit quickly. Think about it – the arguments for local affiliates is local news and reaching the (currently) 8% of the audience – and that’s dropping – that could, but chooses not to, get some form of alternative delivery system. Neither argument holds water any more in this time of exploding personal technology and the increasing need for capital by the networks as they attempt to compete with the myriad other offerings available. They networks ultimately will drop their affiliates, keep the retrans money for themselves, keep all the advertising slots for themselves, and will be more profitable for doing so. These arguments have been made for at least three years, if not more.

    Matthew Castonguay says:

    August 4, 2011 at 4:50 pm

    It’s not a bad argument, but superficial… and of course has been looked at by networks as evidenced by reading between the lines of some of their own pronouncements. But those who really understand the dynamics realize that there is a ratings synergy between networks and affiliates. CBS direct to consumers, sans local affiliates, would see it’s ratings at least halved.

    steve weiser says:

    August 4, 2011 at 5:36 pm

    I have to disagree. I feel sorry for any network if half its ratings are coming from the 8% who don’t have some form of alternative delivery system. For the other 92%, CBS over a local station is no different than CBS directly to the consumer. A CBS channel would be a stronger brand identity than having 200+ different CBS affiliates in 200+ different markets. Most people look for the network when watching television, not a station’s call letters. They want the station’s call letters when watching local programming such as news. A unified brand nationwide for each network makes more sense. Additionally, when all television ultimately goes IPTV, the networks will need unified brands even more, especially should they choose to open their programming up worldwide, which they will be able to do. Think of the potential revenue then!

    Christina Perez says:

    August 5, 2011 at 7:15 am

    PSYOPS ALERT: It is painfully obvious that the broadband lobby spams this website with disinformation propaganda, the ultimate goal of which is to get stations to surrender their broadcast spectrum without a good fight — making them just another programming source for pay video greedsters. Not a word about mobile over-the-air DTV, which will put broadcasting firmly in the mass medium catbird seat when market demand forces cellphone makers to put ATSC M/H chips into their products. Hard to believe that Padden used to represent broadcast stations.

Joanne McDonald says:

August 4, 2011 at 3:08 pm

like the idea of both IVI TV and FilmOn HDi be allowed to go in business again and be able to transmit all the local stations to the viewers on the net for free without any interference from the government for violating any copyright laws with benefits for online viewers that want to watch their favorite stations programming such as local news and shows even after the spectrum auction and plan becomes very mandated and very hard for TV stations to be able to stay on the air without being able to stream all their programming online to the viewers online.

    Matthew Castonguay says:

    August 4, 2011 at 4:46 pm

    If stations can get the rights from networks and syndicators (and somehow I imagine sports leagues will be holding out their caps for some spare change too), what the hell would we need IVI for?

Ed Brandon says:

August 4, 2011 at 3:34 pm

Spot on…now let’s see if anyone bites.

Don Richards says:

August 4, 2011 at 4:30 pm

Absolutely correct. The problem is not technology. It’s leadership. Preston sounds the clarion but what do we do next. Is this a job for the NAB? Is there another group who could spearhead this? I can’t imagine a TV broadcaster who would object…and who would follow along. Who’s going to be the leader?

    Don Richards says:

    August 4, 2011 at 4:33 pm

    Sorry…the next to the last line above should have been, “I can’t imagine a TV broadcaster who would object…or who would not follow along.”

Lisa Churchville says:

August 4, 2011 at 4:39 pm

Live streaming of local stations over wireless networks could be a double-edged sword. It will only increase the demand for spectrum by the wireless providers, who already covet the broadcasters’ spectrum. A far better approach is what NAB and others are espousing — a partnership whereby one-to-many broadcasting is done by broadcasters, rather than by the wireless providers using individual one-to-one streams, which only hog precious bandwidth.

Matthew Castonguay says:

August 4, 2011 at 4:47 pm

I don’t think they’re mutually exclusive… I forsee a platform/market where streams are initiated point-to-point, and when demand reaches a certain threshold, are switched seamlessly (and transparently to the user) to broadcast.

Teri Green says:

August 4, 2011 at 5:02 pm

With more and more ISPs capping bandwidth this idea is about three years too late. This idea runs contrary to what AT&T, Verizon and Comcast and others want. They want you off the Internet and onto their TV section of the business.

Hans Schoonover says:

August 4, 2011 at 6:29 pm

I agree with Mr. Padden, that people are no longer satisfied with television as the gatekeeper for entertainment and this malaise is only going to grow, unless broadcasters fight back… And the networks do not want Broadcasters to unite and grow locally to compete in the internet world. More so, Contrary to the Facts …Internet companies feed a perception that TV Stations are Users of yesterday’s technology, Too frightened to learn, Unable to compete for new media market share AND Soon to fade away like any other late life cycle product. …. Maybe the FCC agrees .

Grace Reed says:

August 5, 2011 at 5:21 pm

The issue is who owns the rights to the program. Local stations got of the content creation business and own almost no programming, let alone unique and interesting programming. The owner of the compelling content can do just as good a job nationally with the content, cutting out the middleman and his money hand in the process. NFL, MLB, NBA have all started their own networks just in case they don’t like ESPN’s offer. The other issue is that the Big 4 program less than half the day, that’s an awlful lot of programming they need to come up with. Maybe more talk shows?

Catherine Garcia says:

August 6, 2011 at 9:26 pm

I would like to respond to DocA’s comment that the networks stick with their affiliates because of tradition and because the networks have their heads in the and. Not true. The networks are run by smart people. They stick with their broadcast affiliates because they are the strongest distribution platform in television. Every network has done the analysis on going straight to consumers through cable, satellite and online. Some networks hve even experimented by affiliating directly with cable systems in a few markets. In every test case the cble only ratings have been a fraction of broadcast ratings. Networks are not sentimentalists. They stick with broadcast distribution because it is better than the alternatives. That is part of the reason why I think that affiliate streaming, based on sound business plans that generate revenue for both the stations and the networks, would be in everyone’s interest.

    steve weiser says:

    August 8, 2011 at 2:28 pm

    If what you say is true, I would like to see the results. As a university professor, such information is important for me. Please post contacts or links to where I can get the information, please. However, until I see the results, I will have to stay with my view that the local affiliate relationship is not best for the networks.

Catherine Garcia says:

August 8, 2011 at 11:17 pm

Sorry, as a Law School Professor, I no longer have access to network data. But trust me, every network has run that analysis. And, I believe that they will continue to do so. Similarly, I assume that most affiliates periodically analyze whether they would be better off without their network. The affiliate/network relationship is fraught with friction. But, it is a mutually voluntary relationship that endures because it provides value to both parties.

Mike Brown says:

August 9, 2011 at 9:39 am

I strongly believe that the days of the network-affiliate relationship are numbered — and fading fast!! It simply falls back to fact that the “1950’s broadcast stick model” is something that lives on only in the minds and hearts of those who grew up in the ’50’s and 60’s. I am one of those people…but, I can see the train’s headlight getting brighter and brighter…it is about to roll right over the local network affiliate.

One need only ask any group of high school kids…they don’t know and they don’t care what local station carries their favorite shows. They want them streamed to and stored on their portable device for viewing anywhere at anytime.

Oh…and just try to explain to those kids the concept of DMA exclusivity…you might as well be showing a moon rock to Abe Lincoln!!

The 1950’s model died long ago…and unless the local station becomes “hyper-local” and gets with the world of streaming…and off the addiction to network content, they will end up with foreclosed buildings and selling their tower for scrap metal.

    steve weiser says:

    August 9, 2011 at 1:08 pm

    Exactly right, WIGUY. I give the affiliate/network relationship 5-10 years maximum, then there will be only hyper-local stations, stations that have become the video arms of the local newspaper or cable system, or shuttered stations.


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