RAISING THE BARR

The Network-Affiliate Conundrum

The broadcast networks may be desperate to keep up with the big streamers by laying big bets on their own, but in the process, they’re choking off their local affiliates and hastening their own demise. It’s time for a more cooperative relationship.

Emily Barr

With the recent speculation regarding NBC’s interest in cutting back to two hours in primetime, another long-simmering issue is coming to a boil: Why are the traditional television networks (CBS, NBC, ABC and Fox) still in complete control of the financial and legal relationships between the affiliates and the virtual MVPDs otherwise known as YouTube TV, Hulu, DirectTV Now, Sling and the rest of the gang?

Way back in time, maybe 10 years ago or so, the network affiliates, through their affiliate associations, resolved to negotiate directly with the nascent virtual players in the same manner they had already been doing with the traditional cable and satellite players. To their chagrin and complete frustration, the affiliate associations were rebuffed by both the vMVPDs and the television networks, who had joined forces in order to control the revenue and determine the value they believed the affiliates were worth, using their affiliates as leverage to help clear their slate of programming channels.

Never mind that many of the early subscribers were using these new platforms as a combination antenna service and virtual DVR. Never mind that much of the most-watched programming remained the local news. Never mind that the networks, who were now charging ever-increasing rates for their own “programming deals” with the affiliates, were now dictating to the affiliates exactly how little they would be allowed to “earn” if their signals were carried on these streaming platforms. But much like the early days of social media, the affiliates had little choice but to take the deal lest they risk not being seen at all. And never mind that unaffiliated stations were completely ignored by the vMVPDs simply because they did not have a network representing them.

Having been snubbed by both parties, the affiliate boards set about negotiating as best they could, looking for opportunities and exclusivity only to later discover that the networks were hard at work using the affiliates’ own signals to drive viewers to their newly hatched streaming platforms with little regard for the damage they were inflicting on the local stations.

Exclusivity went out the window with the incessant promotion of Peacock, Hulu, Disney+, Paramount and Tubi, but small promises were made to share some of the expected revenue in a kind of reverse payment for all that promotion. As Wimpy would say: “I will gladly pay you Tuesday for a hamburger today.” To make up for these payments, the networks continued to demand and generally received more money from local broadcasters in programming fees.

BRAND CONNECTIONS

The networks are desperate to keep up with Netflix, Amazon Prime and others, but they are hastening their own demise in the process. At some point soon, affiliate owners are going to have to demand and receive a reduction in network fees, especially if and when primetime drops to two hours. If the affiliates are able to wrangle a significant decrease in fees, this will leave the networks with far less cash which could, in turn, damage these fledgling network streamers and the content they need to keep generating an audience.

Perhaps a potential solution lies in a more cooperative relationship between the networks and their affiliates. Let the affiliates have a meaningful financial stake in the streaming platforms. Stop playing the middleman and let the affiliates negotiate directly with the vMVPDs, which they have proven adept at doing with cable and satellite providers. Consider running original affiliate content on network streaming platforms, which will bolster both sides of the relationship and add much-needed original content to platforms heavily laden with reruns.

And here’s a novel idea: Create network content that can be seen only on network affiliates — if not forever than for a reasonable length of time before it hits the streaming platforms. At the end of the day, none of these traditional television networks will survive if they choke off the local affiliates and the network programming they promote and carry.

Have some respect for the 70-plus year relationship with your affiliates and find a way to work together and thrive. Our respective futures depend on it.


Emily Barr is the former president and CEO of Graham Media Group.


Comments (3)

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AdamMadMan says:

October 14, 2022 at 2:05 pm

This whole article hits the nail on the head. Not surprising, considering it’s written by the woman who ran one of the most successful, well-respected independent station groups in America for nearly a decade; of course Emily Barr knows what she’s talking about.

I’ve always been of a mind that the decline in viewership on traditional TV platforms has been due to poor business practices, not because watching ads or watching on a schedule are somehow inherently unattractive to audiences under 50. If that were the case, why are most of the big name SVODs running or starting up cheaper ad-supported tiers? And why are FASTs like Pluto TV and Roku Channel growing?

Really, while I don’t deny that streaming and the resulting audience fragmentation has certainly taken viewers away from network TV, I think the big problems are audience cannibalization due to corporate interests (read, pushing viewers to SVODs), the treatment of local stations as little more than ciphers, and a general failure to convince viewers to watch shows live. All of these were in effect with that 30 Rock special back in 2020. Sure, people would’ve to see Liz Lemon and company back together for one more show, even if it had to be more or less a nationally televised Zoom call because COVID. But not like this, not what was basically a glorified infomercial for Peacock. Needless to say, not only did audiences reject it, but station groups were understandably PO’d that NBC was willing to promote the very thing that was threatening to take viewership away, with no artistic integrity to back it up, and most of them just told the network to take the “special” and shove it (though ironically, Barr’s Graham was one of the few big station groups not to completely shun it, instead opting for malicious compliance by dumping it in graveyard slots on their respective NBC affiliates).

It’s stuff like that which makes Nexstar’s recent acquisition of The CW start to really make sense. On the surface, you’d think Perry Sook was nuts to buy a struggling network that was never profitable to begin with (after all, for all the “hits” they produced, most if not all of them were watched mainly on platforms other than the actual network). But if anything, this is a chance for the biggest station owner in America to take control of prime time TV programming and make sure, if nothing else, that viewership of their prime time programming isn’t cannibalized by some SVOD or AVOD.

Sheisme says:

October 15, 2022 at 10:50 am

Even my little brain thought it to be absurd to place networks new content on streaming also, only to cannibalize your viewership and draw your TV ratings down when local stations live and die by local ratings in the market from, wait for it, TV. Seems a bit lazy to create a streaming platform only to use your new programming t o megacast it. It didn’t work for March Madness when they included ESPN2 and Tru to megacast the championships. Like why would you turn from TNT to watch it on Tru? Someone with a bigger brain please make it make sense!

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