WASHINGTON—The Motion Picture Association has filed comments with the Federal Communications Commission urging the agency not to change rules relating to how retransmission consent negotiations are conducted with services like YouTube TV, Hulu Live, and Fubo.

Currently those services (vMVPDs) are not classified as traditional pay TV operators (MVPDs) like Comcast even though they offer very similar packages of channels for a monthly subscription. That means that retransmission consent negotiations with these vMVPDs are conducted by broadcast networks and their parent companies rather than being negotiated by station groups who handle retrans deals with traditional MVPDs.

Broadcast station groups have long argued that they would be able to get higher retransmission fees if they handled the negotiations with vMVPDs.

In a filing made as part of the FCC’s ongoing investigation into the state of competition in the communications marketplace the MPA urged the “the FCC to refrain from intervening in the video marketplace in light of increasing innovation, intermodal competition, and viewer choice.”

The MPA is backed by the major studios as well as Amazon Studios and Netflix Studios that have major interests in the streaming industry,

More specifically, the MPA argued that the “FCC should intervene in the video marketplace only where it has clear legal authority and unequivocal record evidence of market failure. To do otherwise would hinder, rather than help innovation and viewer choice. Today, the marketplace shows abundance and intermodal competition, not clear signs of market failure. Indeed, online services are increasingly providing access to video programming that also remains available on other platforms, a proposition supported by the Public Notice launching this round of comments. From a competition standpoint, examining intermodal competition across broadcast, cable, satellite, telecommunications, and streaming services remains important.”

In addition, the MPA argued that “although streaming services compete with all the other video platforms, the FCC and Congress have both observed that the agency lacks authority to regulate online video services.”

The filing also cited a letter from the previous FCC Chair Jessica Rosenworcel to Sen. Charles Grassley in March of 2023 stating that “online video programming distributors do not neatly fit in these [multichannel video programming distributor] statutory definitions because they lack a physical connection to subscribers and do not use any electromagnetic frequencies when delivering programming to their viewers” and that “the Commission lacks the power to change these unambiguous provisions.”

That letter cited in the MPA filing also noted “that even if the Commission were to proceed, it would require changes to underlying copyright policies” also outside the FCC’s jurisdiction.

“The filmed entertainment sector continues to deliver content that captivates and caters to the viewing preferences of a wide range of consumers,” the MPA concluded. “The sector is a significant driver of economic opportunities for communities across the nation and enables American consumers to exchange diverse information, ideas, achievements, and culture. But as MPA stated in its 2024 Comments, the video programming marketplace will only continue to thrive if the Commission facilitates a light-touch approach to regulating video services.”

The full filing is available here.

WASHINGTON—In another sign that broadcasters are using the Federal Communication Commission's recently launched inquiry into sports rights and distribution to advance longstanding regulatory concerns, Gray Media used a recent meeting with the agency’s staff to highlight the importance of digital rights management (DRM) being part of NextGen TV deployments and to argue that the agency needs to change rules on how broadcasters negotiate retransmission agreements with vMVPDs like YouTube TV and Hulu + Live TV.

The National Association of Broadcasters has taken a similar response to the FCC’s request for public comments on sports broadcasting practices and market place developments by urging regulators and Congress to abolish ownership caps on station groups.

A letter summarizing a March 5, 2026, meeting between FCC staff and Gray representatives explained that “Gray shares the Commission’s concerns about how difficult it has become for consumers to find their favorite sporting event now that so much is moving to streaming and behind paywalls. During the discussion with Commission staff, Gray described the complex sports rights ecosystem. Gray highlighted the following difficulties: (a) professional sports leagues demand those carrying their games to include digital rights management (`DRM’) into the transmission signal to the extent technically feasible, which is why it is critical that the Commission continue to permit the use of DRM in ATSC 3.0 signals, and (b) network affiliates’ inability to negotiate for carriage of local television signals with virtual multichannel video programming distributors, which significantly handicaps local affiliates' ability to competitively bid for local sports rights because affiliates do not control and cannot appropriately monetize the relationship with a significant distributor of their local signals. Shutting out local affiliates from negotiations for sports rights and distribution not only disenfranchises local affiliates, but it also threatens the revenues used to produce local news, weather, and sports programming that is core to Gray’s mission.”

Station groups have long contended that the current practices of letting the media companies like Disney that own broadcast networks like ABC handle retransmission consent deals with vMVPDs harms them financially by reducing the amount of money that they could get in retrans fees, an argument that the broadcast networks reject.

Including DRM in the NextGen TV standard has been opposed by some consumers while broadcasters have long argued that it puts them at a competitive disadvantage to streaming platforms, who use DRM to encrypt streams, in sports rights negotiations because DRM is not part of the existing ATSC 1.0 standard.

The March 5 meeting at the FCC was attended by Robert Folliard, III, Senior Vice President – Government Relations and Distribution for Gray Media, and I met with Ms. Erin Boone, Chief of the Media Bureau; Evan Morris, Deputy Bureau Chief; and Chad Guo, Attorney Advisor.

The full letter is available here.

In a new opinion piece, Republican Federal Communications Commissioner Nathan Simington has proposed a number of regulatory changes to strengthen local broadcasters, including modernizing ownership caps and regulating vMVPDs like YouTube TV as traditional pay TV operators like Comcast.

Local station groups and the NAB have long pushed for the change because it would allow them to directly negotiate retransmission fees with the vMVPDs just as they do with traditional cable and satellite operators. Currently media companies like Disney, which own broadcast networks like ABC, handle the negotiations with vMVPDs as part of larger packages of networks.

“Unlike satellite, cable, and broadcast TV, streaming isn’t regulated by the FCC and faces no such constraints,” Simington and his chief of staff Gavin Wax wrote in a piece posted by The Daily Caller. “They are classified as “online video distributors,” not “multi-channel video programming distributors,” and thus escape the FCC’s oversight. This loophole allows a handful of powerful players to grow larger and more monopolistic, often while avoiding even the most basic public interest obligations."

In the piece, Simington once again signaled his interest liberalizing ownership rules. “Traditional broadcasters are bound by outdated ownership limits such as the 39% national audience reach cap, that prevent mergers or consolidation within a given market, while their internet-based streaming competitors like Amazon Prime, Disney+, and Netflix operate unregulated and unfettered, and are increasingly dominating the landscape with 100% coverage,” he wrote.

To strengthen local broadcasters, Simington concluded that the FCC “must modernize its ownership rules to allow traditional broadcasters greater flexibility to consolidate and compete” and “the FCC must reexamine how it classifies and regulates streaming platforms.”

The full editorial can be found here.

WASHINGTON—Federal Communications Commission member Nathan Simington and his chief of staff, Gavin Wax, have published a blistering editorial urging that the agency crack down financially on broadcast networks like CBS that they believe are part of a “corrupt media cartel.”

The editorial framed the argument as part of an effort to back President Donald Trump’s larger “America First” agenda and as a policy that would strengthen local broadcasters at the expense of broadcast networks like CBS.

After praising Trump’s $20 billion lawsuit against CBS as “bold litigation,” the editorial in The National Pulse said “we must go beyond the courtroom to move from outrage to reform.”

To achieve those changes, they proposed the FCC institute a 30% cap on “reverse transmission fees” that would hurt the broadcast networks, “protect local broadcasters, lower consumer costs and strike a decisive blow against the corrupt media cartel.”

“Media conglomerates like Paramount Global, the parent company of CBS, have begun charging what’s known as ‘reverse’ retransmission fees to broadcasters,” the editorial contended. “The networks demand a share of broadcasters’ revenue for the right to use their content. This practice was once unheard of, but some networks now regularly require more than one hundred percent of broadcasters’ retransmission fees as “reverse” fees, leaving broadcasters to sustain themselves solely on whatever ad sales they can make with their limited inventory (also capped by the networks, and often amounts to only a few minutes of airtime per hour).”

The editorial also attacked networks for the current practice of the networks handling retransmission consent negotiations with vMVPDs like YouTube TV, a system that broadcast stations have tried to change.

“Under their affiliate agreements with the networks, local affiliates can’t even negotiate for online providers to carry the content,” the editorial argued. “The networks do it for them and pay the affiliates whatever they deem reasonable (sometimes, nothing). This gives the networks total control over streaming distribution while robbing local stations of revenue and autonomy in the rapidly growing online video space. What was once a mechanism to support hometown news is now a corporate racket. Instead of investing in local reporters, meteorologists, and producers, local broadcasters’ funds are siphoned to bloated national newsrooms that churn out anti-Trump propaganda and woke talking points. Meanwhile, higher cable bills pass the cost to everyday Americans.”

“Capping reverse retransmission fees at 30% is not just a technical tweak; it’s a strategic strike on these bad actors’ financial foundations,” the editorial stressed.

Simington and Wax added that the FCC could take further action to hurt the networks financially: “[I]f the networks try to make an end-run by demanding an unfair cut in ad sales, restricting available airtime for local news and weather, or prohibiting broadcasters from trying to reach new audiences through alternative distribution channels, then the FCC should be prepared to step in and stop it. President Trump was elected with a mandate to put the American people back in charge. Capping reverse retransmission fees does just that. It ensures your local news stays local, your cable bill stays lower, and your country remains free from corporate media control.”

The ideas would get the FCC directly involved in the financial details retransmission consent negotiations and potentially in pricing, something the agency has been reluctant to do in the past.

Simington has argued that the FCC should change its rules so that MVPDs and vMVPDs are treated the same.

The full editorial can be found here.

NEW YORK—The Advertising Research Foundation (ARF) has proposed a new framework that would reclassify how U.S. households connect to TV. It would replace the pay TV/broadband-only/over-the-air scheme the TV industry has relied on for years.

ARF pointed to data from its DASH TV Universe Study, including the first wave of DASH 2024, that underscores the continued mainstreaming of streaming television, the “appification” of pay TV and the erosion of broadband-only (BBO) penetration as a useful definition of TV connection. The findings and recommended framework are summarized in a new ARF report highlighting shifts in U.S. television usage.

According to the report, the penetration of paid AVOD services has “exploded” over the past two years, from 17% in 2022 to 63% in the spring of 2024, with the two largest streaming services, Netflix and Prime Video, accounting for the vast majority of the most recent gain.

SVOD penetration, however, has fallen over the same period, though not at the same rate. The report also highlighted how free ad-supported streaming TV (FAST) continues to grow, while penetration of virtual multichannel video programming distributors (vMVPDs) like YouTube TV or Hulu + Live TV is flattening out. Adoption of vMVPDs has picked up among older (55-plus) households, though, suggesting that the technology is mainstreaming, according to ARF.

The report also found that more than 40% of pay TV households use apps to receive all or some of their TV signals, “blurring and effectively outmoding the concept of BBO (Broadband Only),” ARF said.

In response to these trends, ARF recommended a new classification system for U.S. TV households.

This framework divides households into six segments based on which TV signals they receive. Four of these segments constitute the pay-TV universe, including traditional and virtual providers, representing 59% of TV-accessible households this past spring. The other two segments capture households relying on over-the-air (OTA) and digital-only signals. Notably, the pay-TV segments and OTA comprise the linear TV universe, which ARF says represented 74% of U.S. TV households in spring 2024.

ARF’s proposal reflects the nonprofit organization’s long-held position on revising what it views as outdated methods of TV audience measurement, based not only on what platform viewers are watching content, but on what device as well.

“The latest trend data from DASH underscores the need for an updated view of how TV is defined and consumed,” ARF Chief Research Officer Paul Donato said. “As the lines between traditional pay and streaming services continue to blur, we’re moving toward a new paradigm that will more accurately represent how households connect to television.”

Philo has announced that its entire lineup of live and on-demand TV is now available on LG Smart TVs.

The launch allows subscribers to access the virtual multichannel programming distributor’s $28-a-month package of 70-plus popular channels, including AMC, A&E, MTV, VH1, BET, and Discovery, and 75,000-plus on-demand titles on LG Smart TVs. The offering also includes the AMC+ streaming service and 90-plus free channels.

Subscribers can access the programming by downloading the Philo app at the LG Content Store on their LG Smart TV and signing in.

The service is already widely distributed on Roku, Samsung, Apple TV, Vizio, Fire TV, Android TV and other popular streaming platforms.

More information on the programming is available here.

WASHINGTON—The National Association of Broadcasters continued its push to get the FCC to regulate vMVPDs like YouTube TV as traditional pay TV operators during in a recent visit with commissioner Anna Gomez, her chief of staff, Deena Shetler and her policy advisor, Harsha Mudaliar.

The issue is important to station groups, which believe they can increase their retransmission consent revenue if they are able to negotiate directly with YouTube TV, Fubo, Hulu and other vMVPDs.

Currently, station groups handle retrans negotiations with traditional multichannel video programming distributors (MVPDs) like Charter Communications and Comcast. But broadcast networks and major programmers like The Walt Disney Co. and Paramount Global handle retrans deals with virtual MVPDs because the streaming services are not classified as traditional pay TV operators (or MVPDs) under FCC rules.

Some members of Congress have supported the change, but FCC chairwoman Jessica Rosenworcel has argued the agency may not have the power to change those rules without Congressional action.

The discussion has also divided the broadcast industry between station owners, who want the vMVPDs reclassified, and broadcast networks owned by major media companies, which want to continue to handle deals with online providers as part of much larger distribution pacts.

The meeting with Gomez and her staff was attended by Curtis LeGeyt, NAB president and CEO, and Rick Kaplan, its chief legal officer and executive vice president.

During the conversation, the NAB emphasized the critical need for the FCC to study how streaming has affected local broadcasting. “It is impossible to understand the demands local stations face without coming to grips with the sea change wrought by streaming,” Kaplan said in a letter to the FCC following the Oct. 3 meeting. “The Commission’s rules were designed for a different world, and if the agency is truly committed to ensuring local service to communities across the nation, then it must examine the interplay between local broadcasting, the dramatic rise of streaming and the unregulated Big Tech behemoths that have shattered the economics underpinning local journalism.”

The NAB representaties at the meeting also expressed their surprise that the commission has not demonstrated greater curiosity about the impact of streaming, Kaplan added.

“While broadcasters have filed comments in docket after docket on issues such as foreign government sponsorship identification, cyber security plans, disaster reporting, proposed rules on generative AI disclosures in political ads, public reporting of station-by-station workforce demographics, retransmission consent impasse reporting, and more, we are left waiting for the Commission to address the one issue that is so forcefully impacting the ability of broadcasters to serve their local communities,” Kaplan wrote. “How is it that the Commission has not examined this issue in earnest since 2014, when it first proposed, for example, to modernize the definition of multichannel video programming distributor (MVPD) to include virtual MVPDs? Why, with all of the obvious shifts in the marketplace, has the Commission refrained from considering how these changes are impacting service to local communities?”

The NAB letter also noted that “many Members of Congress agree that this is exactly what the Commission should be examining” and said the FCC should be exploring the issue even if it is unsure of its authority to change the rules. “Why not still inquire about the marketplace even to report its findings to Congress?” Kaplan’s letter asked.

“As we explained, NAB is ready to work with the Commission to help it gain a better understanding of the current marketplace,” Kaplan wrote. “That will require the FCC to seek additional comment from parties in light of the intervening decade since it last sought public input on the issue of virtual MVPDs. The Commission should not fear information and differing viewpoints; rather, it should welcome them.”

The full letter is available here.

In response to the NAB's comments, a spokesperson for the Preserve Viewer Choice Coalition, which is backed by vMVPDs and such major programmers as Disney, Fox and Paramount, said: "Despite assertions by some to the contrary, the FCC has consistently reinforced their lack of authority to upend the streaming marketplace in the way that the big affiliate groups seek – a fact that bipartisan members of Congress have echoed. The reality is, local news is widely available on streaming, providing consumers with a variety of ways to watch. Further, polling shows that few Americans support more streaming regulations. We commend the FCC for their fact-based assessment of the streaming marketplace."

LONDON—Sports rights for televising NFL games remain by far the most costly of all U.S. sports rights, accounting for 44% of the entire sports broadcast rights spend in the U.S. Despite those costs, however, a new study by Ampere Analysis suggests they are certainly worth the cost for streaming services offering pay TV bundles and that the popularity of NFL football continues to play a key role in attracting new subs. 

A new report from Ampere Analysis looking at the impact NFL has on customer acquisition found that during the NFL season, starting in September and continuing through February, there is a 77% boost to customer sign-up for Virtual Multichannel Video Programming Distributors (vMPVDs) carrying channels with NFL rights.

But if NFL rights remain the glue that is holding together the pay TV bundle, the study also found that the increasing number of NFL games being packaged as streaming exclusives is a threat to vMPVD services like Fubo and YouTube TV. As there becomes fewer games available on linear channels meaning, the vMPVDs will need to consider aggregating streaming services alongside traditional channels.

The study also found that during March to August (off-season) vMPVD services collectively received an average of 29,000 sign-ups per day since 2020. This increased 77% to 51,000 during the on-season (September-February), highlighting the impact of the NFL. 

Over the same period, streaming services without NFL games rose by just 2.5% during NFL seasons. The largest sign-up event for vMPVD services collectively was the 2023 Super Bowl on Fox, garnering 410,000 subscriptions in one day

Ben McMurray, research manager at Ampere Analysis explained that as "the most popular sporting event in the US, the NFL can be a powerful subscription driver for companies acquiring broadcast rights. It also has the power to drive significant viewership on free-to-air channels and inflate the overall TV market during the NFL season - and deflate it when the season ends. The biggest potential threat to vMPVD services in the future is the sale of games and packages as exclusives to streaming services. vMPVDs can thrive even without direct investment in the NFL, acting in a mutually beneficial way with broadcasters by extending the advertising reach of games. However, if the shift to streaming exclusives continues, vMPVD services will have to either invest directly in rights or provide access to streaming services as an aggregator to continue attracting subscribers.”

Other key findings include: 

• Starting in September and ending with the Super Bowl in February, the NFL is the most popular event in US. It claims 44% of the entire sports broadcast rights spend in the country. 44% of sports fans in the US say they enjoy the NFL, 43% of which say that it is their favourite competition
• For vMPVDs, and many other platforms carrying NFL games, the sign-up rate is consistently high throughout the season. The biggest sign-up drivers are the start of the season - for those who want to watch it in its entirety - and the Super Bowl - for those who want to see the competition’s biggest game 
• Many NFL games are available on free-to-air channels including NBC, CBS, ABC, and Fox. These channels are carried by VPMVDs as well as many of the premium channels 
• vMPVDs are emerging in the US as consumers ditch cable. U.S. Pay TV penetration fell from a high of 84% in 2009 to 42% by the end of 2023
• Companies directly acquiring rights also use the NFL as a tool for generating sign-ups to their streaming platforms. Peacock’s exclusive playoff game generated just over 2 million subscriptions in one weekend. Paramount+ generated around 2.4 million sign-ups on the day of the 2023 Super Bowl.

WASHINGTON, D.C.—FCC Commissioner Nathan Simington has issued a statement criticizing the way the FCC currently regulates traditional linear TV and streaming services, arguing that the current rules “entrenches marketplace power at the expense of the consumer." He contends the FCC exerts an “uneven hand” in the media landscape with hefty “legacy rules for some, and close to zero rules for others.” 

“As the Disney / DirecTV distribution negotiation drags on, it is a moment to recognize a few truths,” Simington wrote. “One: about a third of linear network content distributed in the United States is now delivered by over the top, streaming platforms. Two: there is zero harmonization, whether in our rules or in industry practice, between network video content distribution over traditional linear MVPDs versus over the top, streaming MVPDs. Three: as is so often the case in major disputes between networks and distributors, independently owned and operated affiliates and station groups are left behind, powerless to distribute content to consumers in the way they prefer to consume it.” 

“The linear media marketplace is governed by a two-tiered system of rules—legacy rules for some, and close to zero rules for others,” he concluded. “We must balance the scales. A future Commission should take seriously the question of its own uneven hand in the media marketplace. We must either unleash the video marketplace from outdated rules or balance it with smart and targeted reforms, but what cannot persist is a system that entrenches marketplace power at the expense of the consumer.”

Simington didn’t directly discuss how the FCC should address the DirecTV/Disney carriage dispute that continues to blackout Disney’s ESPN, Disney-owned stations and other Disney networks for DirecTV satellite and streaming customers. But DirecTV did issue a statement praising the statement and calling for reform of regulations governing TV and video markets. 

DirecTV has filed a complaint with the FCC regarding Disney’s negotiating tactics.

The FCC has been exploring ways to address blackouts over carriage disputes. 

This summer, the FCC said it is is seeking public comment on whether the commission should require cable and satellite pay-TV providers to refund subscribers who face programming blackouts on their cable or satellite television subscription. 

In its “Customer Rebates for Undelivered Video Programming During Blackouts” NPRM, the FCC took note of the increasing rate of local TV station blackouts between station groups and pay-TV providers. The release of the NPRM was the second of two proposals targeting blackouts FCC Chairwoman Jessica Rosenworcel previewed last fall; the first proposal targeting reporting rules for blackouts was dropped late last year. 

But there is little agreement in the TV industry how the unequal treatment of streaming media and traditional TV can be addressed. Station group owners would like to see some players subject to increased regulations by having virtual MVPDs like Sling TV reclassified so they operate under the same rules as traditional MVPDs like Charter. This would allow stations to directly negotiate with vMVPDs for retrans fees and, they say, increase the funding for local news. 

That proposal is opposed by broadcast networks and their owners who currently handle those negotiations.

FCC Chair Jessica Rosenworcel has indicated that the FCC lacks the power to reclassify vMVPDs without Congressional action.  

NEW ROCHELLE, N,Y.—A new study from Horowitz Research indicates that streamers and content providers who want to attract African-American audiences need to provide culturally relevant content and that Black audiences are already embracing vMVPDs, FAST channels and Black-targeted streamers.

“Culturally relevant content has always been an important piece of the media pie for Black audiences,” notes Adriana Waterston, executive vice president, Insights & Strategy Lead for Horowitz Research, a division of M/A/R/C Research. “With retention being a challenge in the SVOD and vMVPD spaces and engagement a challenge for FAST/AVOD, offering top-notch Black content can be an important differentiator.”

Horowitz Research’s new annual report, FOCUS Black Volume I: Subscriptions 2024.which tracks the evolution of the pay and free TV, streaming, internet, and mobile environment among Black Americans, finds that content geared toward Black audiences is important for over 6 in 10 (62%) Black households. 

The study also found that as traditional cable/satellite subscriptions decline, penetration of subscription streaming services has remained steady among Black households. About two thirds (67%) of Black TV content viewers subscribe to at least one SVOD, which is about the same as total U.S. viewers. 

While Netflix and Amazon Prime Video top the list of most popular SVODs, Black audiences also use a range of Black-targeted SVOD services: Over 4 in 10 (42%) have access to at least one Black-targeted SVOD, such as BET+, Zeus, Black World Cinema, ALLBLK, etc.

The new Horowitz study also finds that Black audiences are more likely to watch content on free, ad-supported TV (FAST) channels than the general audience.

Three quarters (75%) of Black TV content viewers use FAST services (compared to 67% of total market consumers). That’s more than a five-fold increase from 2019, when only 13% of Black households reported using these services. 

In comparison, the total market usage of FAST services increased 25% during the same time span. 

The researchers also noted that the array of Black-focused content available on FAST channels is an important driver of viewership. Notably, 2 in 3 (66%) Black FAST viewers say that they watch content geared toward Black audiences at least weekly, according to the new FOCUS Black Volume II: Viewing Behaviors 2024 report from Horowitz. In the past month, Black households over-indexed for usage of Tubi, Pluto TV, and XUMO.

Virtual MVPD services like YouTube TV, Sling, and Hulu with Live TV are also gaining traction among Black households. Almost 1 in 3 (32%) Black TV content viewers subscribe to at least one vMVPD service (over-indexing compared to 23% of consumers overall). Notably, almost 2 in 3 vMVPD subscribers report high satisfaction with the channels and content geared toward Black audiences on their vMVPD service.

Horowitz also announced that the importance and value of content for diverse audiences will be a key focus of Horowitz’s upcoming Cultural Insights Forum, which is coming back in Fall of 2024 after a 6-year hiatus. The Forum, focused on how brands and media companies can drive ROI by reaching and serving America’s diverse, multicultural, and intersectional audiences, will be hosted on November 14, 2024, at Telemundo Center in Miami. Sponsorship and speaking opportunities are now open, and registration will open soon. 

WASHINGTON, D.C.—Affiliate groups for the four major broadcast networks have asked the FCC to reclassify vMVPDs like YouTube TV so they are subject to the same rules for retransmission consent negotiations as traditional pay TV cable, satellite and telco providers. 

The ABC Television Affiliates Association, CBS Television Network Affiliates Association, FBC Television Affiliates Association, and NBC Television Affiliates made the comments in response to the Commission’s proposal to require multichannel video programming distributors (“MVPDs”) to provide rebates to customers who lose access to broadcast programming during contract disputes between programming suppliers and MVPDs. 

“Like the National Association of Broadcasters, the Affiliates Associations take no position on whether the Commission should adopt the proposals included in the NPRM [Notice of Proposed Rulemaking],” for rebates and blackout reporting, the affiliates argued. 

Instead, they argued that the FCC's plan would not benefit to many consumers without wider changes to the definition of what constitutes a pay TV operator. Currently vMVPDs are not subject to the same rules as traditional cable, satellite and telcos. 

“[T]he Affiliates Associations agree with Chairwoman Rosenworcel that consumers should not be forced to pay for services they do not receive,” the affiliates said. “Unfortunately, no matter how the Commission resolves the NPRM, an increasing number of consumers will continue to be forced to do just that when service disruptions occur. That is because, as noted in several comments, traditional MVPDs no longer dominate the multichannel video programming marketplace as they are increasingly displaced by unregulated companies that provide video services over the Internet (so-called `vMVPDs’). As the Affiliates Associations explained at length in their recent Reply Comments in the Commission’s impasse reporting docket, rapidly growing vMVPD services operate outside the retransmission consent framework established by statute and federal regulations due to the Commission’s inexplicable failure to complete its 2014 rulemaking that proposed classifying vMVPDs as MVPDs for purposes of the Commission’s rules.”

“In the meantime, as NCTA correctly notes, the meteoric rise of vMVPD subscribership has coincided with a precipitous drop in subscribers to traditional MVPDs,” the affiliates noted. “Consumers are freely substituting vMVPD service for MVPD service; this makes sense, as the two products are essentially identical but-for the technology by which they deliver programming to their subscribers. (Indeed, MVPDs like DISH and DIRECTV are also vMVPDs.) Typically, these services even enter the customer’s home over exactly the same physical infrastructure. Imposing additional regulations on `traditional’ MVPDs while leaving vMVPDs outside the retransmission consent framework is arbitrary, unfair, and affirmatively harmful to consumers. The Commission should heed the well-reasoned recommendations of the New York State Public Service Commission (the “NYPSC”), which correctly points out that requiring MVPDs to provide rebates during service interruptions while imposing no such obligation on vMVPDs is bad for consumers.”

Station groups have long pushed for reclassification. Currently networks and the major media companies that own them handle retransmission negotiations with vMVPDs. If they were reclassified pay TV operators, station groups would handle the deals, which they claim would boost their revenue. 

FCC chairwoman Rosenworcel has, however, expressed doubts that the FCC has authority to make the reclassification without new legislation. 

The filing also complained about filings from organizations and pay TV operators who have argued that the marketplace for negotiating retransmission consent agreements is “broken” and that the FCC needs to regulate it. 

“The retransmission consent market isn’t broken,” the affiliates argued. “It’s functioning exactly as Congress designed it to identify the value of broadcast programming. As Commissioner Simington notes, `[i]t is no sin to get paid, broadcasters produce content worth the price, and blackouts, infuriating though they are, are a feature of price discovery.’ Commission involvement in the marketplace will not improve results and will likely have wide-ranging unintended consequences. The market is changing to be sure, but the only intervention the retransmission marketplace needs now is for the Commission to correctly classify vMVPDs as MVPDs. Accordingly, the Commission should ignore the calls of a small number of commenters to convert this proceeding into an excuse for further regulation of the retransmission consent marketplace.”

The full filing is available here.  

WASHINGTON, D.C.—In response to a FCC proposal to encourage local news by streamlining some regulations, Sinclair has filed comments with the FCC arguing that the FCC needs to address the economics of broadcast television by deregulating the industry in a number of key areas, including station ownership, the transition to ATSC 3.0 and rules governing vMVPDs. 

Sinclair made the filing, which states “local journalism in the United States is in crisis,” in response to an FCC proposal to encourage local journalism by speeding up license renewals for stations offering local news. 

“Sinclair does not oppose this proposal,” lawyers for the broadcast station group said. “But we respectfully submit that, if the Commission seeks to have a broader impact, the issue it must confront is one of economics, not unspecified regulatory carrots or sticks.”

“Accordingly, while we welcome the Commission’s efforts in this proceeding, we believe the Commission can and should do far more – and we hope the Commission will view this proceeding as a springboard rather than a stopping point,” the filing said. 

More specifically Sinclair argued for relaxed station ownership rules, increased FCC efforts to boost ATSC 3.0 deployments, changing rules regulating retransmission negotiations with vMVPDs and a more measured approach to enforcement. 

“We respectfully submit that the question of vMVPDs and broadcaster compensation for carriage will have orders of magnitude greater impact on local news over the coming years than any processing priority the Commission could conceivably propose,” the filing argued. 

Sinclair’s lawyers also argued that the FCC needs to work to accelerate the transition to ATSC 3.0. “We welcomed the Chairwoman’s announcement of the Future of Television Initiative designed to answer many of the questions associated with the transition,” the filing said. “We nevertheless continue to urge the Commission to move forward more quickly and not to take actions that might create uncertainty regarding the transition, such as novel steps to police patent licensing despite a lack of jurisdiction or expertise on this issue or raising unrealistic or unattainable barriers to the transition.”

In terms of ownership reform, Sinclair argued that “as an initial step, the Commission could simply commit to complying with its statutory obligation to complete the Quadrennial Review every four years and remove or update regulations no longer necessary in light of competition. We question how the Commission can rationalize restrictive and unchanging local ownership rules at a time when most markets are served by one or zero newspapers and broadcasters face intense and increasing competition for both viewers and advertisers in a video marketplace that any fair observer would agree has changed significantly over recent decades.”

More information is available in the original filing.  

WASHINGTON, D.C.—A new national poll from Preserve Viewer Choice Coalition finds that viewers strongly prefer streaming platforms to access video programming over traditional video services and that a majority of consumers are opposed to the idea of regulating vMVPDs like YouTube TV or FuboTV by the same rules governing traditional cable and satellite TV providers. 

The Preserve Viewer Choice Coalition is a strong opponent of proposals from broadcast station groups and the NAB to get the FCC regulate vMVPDs like traditional pay TV operators. The Preserve Viewer Choice Coalition is backed by ABC, CBS, FOX, Fubo, NBC, Roku, Telemundo, Univision, and Warner Bros. Discovery. 

This poll, conducted in partnership with Change Research, considers American viewers' preferences for watching video content, how and where they watch, the availability of local news on streaming and whether they support imposing new regulations on streaming platforms.

"The data shows that streaming services are the preferred viewing method for many Americans," says Bryce Harlow, Preserve Viewer Choice Coalition spokesperson. "Viewers want the ability to choose their content and control costs and oppose proposals for the FCC to regulate streaming like cable, which jeopardizes those priorities."

Findings from the poll include:

• Viewers strongly prefer streaming video (64%) to watching it via cable or satellite (23%).
• Fewer than 1 in 5 find it difficult to stream local news, and far more watch local news on phones, laptops and tablets than watch on televisions.
• More Americans oppose regulating streaming like cable; of the 57% who oppose these proposed regulations, 42% strongly oppose them.
• Viewers are more concerned with cost and convenience than the ability to watch live content on a television.
• Americans today watch video online, more often than via cable. Respondents say they watch video online at least a few hours per week, either through clips on social media (66%) or via subscription on-demand services, such as Disney+ or Hulu (60%).
• Live streaming services, including YouTube TV and Fubo are also popular, with 45% of Americans saying they view video content on those platforms weekly.
• Almost half of Americans (48%) indicate they never watch cable or satellite TV and 3 in 4 say they never watch antenna TV.
• Local news is widely available and easy to access for Americans of all ages. 84% of respondents said they often or sometimes view local news on a smartphone, computer or tablet versus only 48% who said they often or sometimes view on their television via cable or satellite. A majority of respondents across all age groups found it easy to access local news broadcasts on streaming platforms, while fewer than 1 in 5 found it difficult. 
• Respondents were almost evenly split between cable/satellite and streaming viewership for local news – 40% and 37% respectively.
• Streaming service perks like content and convenience are attractive to consumers, with the majority of viewers indicating they are content with the current streaming model. Viewers generally express satisfaction with streaming, with most American adults (57%) opposing regulating streaming like cable.
• Most viewers (66%) believe that streaming services give them more access to content than cable or satellite.
• Most surveyed (62%) believe that it is easier to switch streaming services than to switch cable providers, speaking to the ease of opting in and out of streaming platforms.
• Just as many respondents 65 and older feel the same about cable/satellite as they do streaming, younger people are far more likely to feel more positive about streaming.
• Respondents overwhelmingly ranked hidden fees (92%) and price (80%) as their top concerns when watching video content.

The poll was designed and conducted by Change Research in partnership with the Preserve Viewer Choice Coalition. The poll included a representative sample of 1,573 registered voters nationwide surveyed between January 10 - 15, 2024 and was conducted online in English. The modeled margin of error is +/-2.6%. 

More information is available at https://www.preserveviewerchoice.org/#/. 

A long-treasured TV watching feature may finally be coming to YouTube TV.

The ability to quickly toggle between a current channel and previous channel watched has been a popular feature offered via cable and satellite TV services through customized remote controls. Now YouTube TV is testing such a feature. 

According to the website 9to5Google, some YouTube TV subscribers report a new button shortcut on the YTTV interface that allows viewers to toggle between current and last viewed channels by simply pressing the “OK” or “Select” buttons for an extended period of time. 

Only subscribers to Apple TV and Google TV can currently see this pop-up hint on the screen but it’s anticipated that the feature will be widely deployed after its current beta. 

WASHINGTON, D.C.—During a November 30  House Energy and Commerce Communications and Technology subcommittee hearing, FCC Chair Jessica Rosenworcel indicated that Congressional action may be needed to give the FCC authority to regulate streaming and reclassify vMVPDs so they are subject to the same rules as traditional pay TV cable and satellite operators. 

Given the difficulties in getting anything passed through the current highly polarized Congress, those comments are a potential setback for the NAB and station groups who have been pushing the FCC to reclassify vMVPDs like Sling TV, YouTube TV and Fubo TV. 

The reclassification would allow station groups to directly negotiate retransmission deals with vMVPDs, a change from the current system of having the owners of the major broadcast networks handle those deals. This, they argue, would boost retransmission fees and provide stations with more money for local news. 

The networks and vMVPDs under the banner of Preserve Viewer Choice Coalition have opposed the change, saying it would stifle innovation and that there is little evidence that new rules would produce more money for local news. 

During the subcommittee hearing on FCC oversight, Representative and Ranking Member of the House Energy and Commerce Committee, Cathy McMorris Rodgers (R-WA5), argued that that only Congress has the ability to regulate streaming in her opening remarks, “We recently sent a letter to chair Rosenworcel, cautioning against refreshing the record to apply outdated, decades old regulations to an evolving media marketplace. Since I haven’t received a response, I will reiterate my concern and firm view that changes to laws that govern the media marketplace need to be done by Congress, not by the FCC.”

Later in the hearing McMorris Rodgers followed up and directly asked Jessica Rosenworcel about the issue. “Earlier this year, chairman Latta and I sent you a letter urging you not to reopen the 2014 proceedings on vMVPDs. At the last oversight hearing you stated and I quote, ‘the Commission’s authority extends only to what Congress provided in the 1984 Cable Act and the 1992 Cable Act…’ Because you acknowledged that the FCC does not have the legal authority to regulate vMVPDs, do you commit to not taking any action on this issue?”

In response, Rosenworcel said “I think that our duties and authority in this area are constrained by the 1984 Cable Act and the 1992 Cable Act… That’s why I think the request to incorporate virtual service providers is complex, doesn’t fit neatly in the law. We are combing over the record and trying to understand adjacent copyright issues to figure out a way forward, but I think fundamentally this is an issue where those who want us to act are going to have to come to Congress.”

Preserve Viewer Choice Coalition spokesperson Bryce Harlow after the hearing concluded said, “Chairwoman Rosenworcel was extremely clear again today on the FCC’s ability to regulate streaming services; congress is the only one that can regulate streaming video in the manner that large station groups seek. Her thoughtful remarks reaffirm her prior sentiments and are a win for streaming viewers across the country whose ability to access high-quality and affordable content we’re fighting hard to protect.”

In response to the FCC chair's testimony, the Coalition for Local News, which is backed by station groups, noted that in 2014 Rosenworcel had taken a different position on the issue. 

"We appreciate FCC Chair Rosenworcel’s words about the importance of localism, but words are not enough at a time when the failure to modernize rules for the streaming era threatens the long-term viability of local news," the group said in a statement. "In 2014, the FCC recognized its authority to modernize the rules to include streamers. But the right place to start is to re-open the existing record so that industry participants can help the FCC and Congress understand how the market has changed. There is no question of the FCC’s authority to take that action. It’s time to end the delay, which only serves the interests of media giants, and instead move this process forward by refreshing the record to ensure the future of local broadcast."

Chair Rosenworcel’s earlier 2014 statement can be found here. 

DURHAM, N.H.—U.S. pay TV providers continued to hemorrhage subscribers in Q3 2023 according to new data from the Leichtman Research Group, Inc. (LRG) showing that the largest pay TV providers in the U.S. – representing about 96% of the market – lost about 465,000 net video subscribers in Q3 2023, compared to a pro forma net loss of about 385,000 in Q3 2022. 

The results, however, weren’t as bad as the previous quarter, when LRG reported that the largest pay TV providers in the U.S. lost about 1,730,000 net video subscribers in Q2 2023, compared to a pro forma net loss of about 1,725,000 in Q2 2022.

Q3 also produced generally positive results for vMVPDs like Fubo TV and Sling. vMVPDs added 1.3M subs while traditional pay TV providers lost 1.8M subs in the quarter. 

“Similar to recent years, pay TV net losses in the third quarter were more modest than in the first two quarters of the year due to the strength of sports on Internet-delivered vMVPD services,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc.  “While traditional pay TV services had a net loss of about 1.8 million subscribers in Q3 2023, vMVPDs had over 1.3 million net additions in the quarter.”

The top pay TV providers account for about 71.5 million subscribers – with the top seven cable companies having about 34.9 million video subscribers, other traditional pay TV services having 21.9 million subscribers, and the top Internet-delivered (vMVPD) pay TV services having 14.7 million subscribers.

Other key findings from LRG include: 

• Top cable providers had a net loss of about 1,015,000 video subscribers in 3Q 2023 – compared to a loss of about 985,000 subscribers in Q3 2022
• Other traditional pay TV services had a net loss of about 780,000 subscribers in 3Q 2023 – compared to a loss of about 700,000 subscribers in Q3 2022
• Top vMVPDs added about 1,325,000 subscribers in Q3 2023 – compared to a gain of about 1,300,000 subscribers in Q3 2022

NEW YORK—FuboTV Inc. has reported Q3 2023 financials that show the vMVPD boosted its sub count by 20% year-over-year to 1,477,000 and increased revenue by 43% versus Q3 2022. 

Based on those results, which exceeded its guidance, the company also raised its full year 2023 guidance for North America.

“Fubo's strong third quarter exceeded guidance in North America, highlighted by an all-time high in paid subscribers as well as double digit year-over-year revenue growth,” said David Gandler, co-founder and CEO, Fubo. “As we progress toward our 2025 positive cash flow goal, we are confident that a return to content aggregation and bundling - which we long predicted - is now a reality. Fubo’s aim is to be a super aggregator, offering consumers premium content delivered through an intuitive and personalized streaming experience, at multiple price points, all in a single app.”

“Fubo’s third quarter marked continued improvements across our key performance metrics, including subscriber growth, gross margin, ARPU expansion and advertising revenue growth,” said Edgar Bronfman Jr., executive chairman, Fubo. “Looking ahead, as we raise full year 2023 guidance, we remain confident in the value proposition of our business model and believe we are well positioned to further benefit from industry trends, including the growing number of consumers subscribing to vMVPD services and the significant increase in CTV advertising.”

The Q3 earnings report showed that Fubo achieved double digit growth versus the prior year in North America, delivering $313 million total revenue (up 43% year-over-year) and a record 1.477 million paid subscribers (up 20% year-over-year), meaningfully exceeding third quarter 2023 guidance. The company also delivered $30.3 million in North America ad revenue during the quarter, an increase of 34% year-over-year.

In addition, Fubo expanded average revenue per user (ARPU) in North America by 17% year-over-year to a record $83.51 during the quarter.

In the Rest of World (ROW), Fubo delivered $8.4 million total revenue (up 45% year-over-year) and 411,000 paid subscribers (up 15% year-over-year). ROW includes the results of Molotov, the French live TV streaming service acquired by Fubo in December 2021, the company said. 

The results also marked steady progress over the quarter toward the company’s goal of 2025 positive cash flow goal. The company achieved year-over-year improvement in net loss of $21 million and a $43 million improvement in net cash used in operating activities. Also during the quarter, Fubo achieved a $40 million improvement in free cash flow and a $21 million improvement in Adjusted EBITDA (AEBITDA). These improvements were a result of ongoing efforts to drive operating leverage across the business, and represent the third consecutive quarter of year-over-year improvements in these metrics. 

Based on those results, management also said that the company maintained a strong balance sheet and healthy liquidity position, ending the quarter with $266 million in cash, cash equivalents and restricted cash, that the company believes will provide it with sufficient liquidity to fund its current operating plan and the momentum necessary to reach its 2025 positive cash flow goal.

Looking to full year 2023, Fubo is raising revenue and paid subscriber guidance in North America. The company now expects to close the year with $1.319 billion to $1.324 billion in total revenue, representing 34% year-over-year growth at the midpoint (from previously stated guidance of $1.260 billion to $1.280 billion), and 1.584 million to 1.599 million paid subscribers, representing 10% year-over-year growth at the midpoint (from prior guidance of 1.565 million to 1.585 million).

NEW YORK—A panel of the National Advertising Review Board (NARB), the appellate advertising body of BBB National Programs for industry self regulation, recommended that Google, LLC discontinue the claim that its YouTube TV service is “$600 less than cable.”

The advertising had been challenged by Charter Communications, Inc. in a National Advertising Division’s (NAD) Fast-Track SWIFT challenge. Following NAD’s decision (Case No. 7233), Google appealed NAD’s recommendation to discontinue the challenged advertising claim.

In explaining its ruling the NARB noted that the challenged “$600 less than cable” claim, was accompanied by a disclosure identifying “comparable standalone cable” as the basis of comparison. The price calculation underlying the challenged claim included the cost of two set-top boxes per household for “standalone cable” services.

The NARB panel determined that the commercial disclosures were not clear and conspicuous.

Further, in agreement with NAD, the NARB panel concluded that at least one reasonable interpretation of the challenged claim is that YouTube TV is $600 less than any comparable service available from companies traditionally associated with cable services. 

The NARB ruled that this comparison does not align with the challenged claim because many households can subscribe to basic Spectrum service without renting cable boxes. Also, in certain markets, cable providers offer regional sports networks (RSNs) but YouTube does not, therefore Google did not have a valid reason for adding the cost of Spectrum’s Sports View option to the price comparison.

For these reasons, the NARB panel adopted NAD’s recommendation that Google discontinue the claim that its YouTube TV service is “$600 less than cable.”

Google stated that it “disagrees with NARB’s determination that people watching the challenged commercials will somehow understand ‘cable’ to mean something other than traditional cable television,” however it “intends to modify or cease the disputed advertising claim.” Google further stated that, at a later date it “may reconsider the claim based on updated information.”

The National Advertising Review Board (NARB) is the appellate body for BBB National Programs’ advertising self-regulatory programs. NARB’s panel members include 85 volunteer professionals from the national advertising industry, agencies, and public members, such as academics and former members of the public sector.

TROY, Mich.—The newest J.D. Power 2023 U.S. Television Service Provider Satisfaction Study finds that live TV streaming customers are much more loyal than cable and satellite services, with only 12% of virtual MVPD customers planning to switch services in the next year, much lower than the 21% of cable and satellite subs who say they plan to switch. 

The study also found that customer satisfaction with live TV streaming providers is higher across all seven factors considered by J.D. Power. 

YouTube TV had the highest customer satisfaction. 

Most notably, satisfaction with the cost of service is 156 points higher (on a 1,000-point scale) among live TV customers than among cable and satellite customers, given the cost for live TV streaming averages $69 per month vs. $113 per month for cable and satellite.

“Although the cost of running a cable or satellite providing company is innately more expensive given the engineering and execution of such a service, it is hard to ignore the vast difference in cost between them and the live TV streaming companies,” said Carl Lepper, senior director of technology, media and telecom intelligence at J.D. Power. “Despite the varying cost, streaming is succeeding in all areas, especially customer care. Of the mere 30% of all streaming customers contacting customer service this year, 84% feel that it was somewhat or very easy to resolve their problem. This is key to not only maintaining their current customer base, but also for continued growth.”

The study looks at satisfaction across six categories. 

In the live TV streaming segment, customer satisfaction was 781, up from 774 last year.

In the cable/satellite TV–national segment, satisfaction improved to 701, slightly up from 699 last year.

In the cable/satellite TV, east region, customer satisfaction was 697, the same as last year.

In cable/satellite TV, north central region, customer satisfaction was 683 now compared to 688 last year.

In the cable/satellite TV, south region, customer satisfaction was 719, up from 710 last year.

In the cable/satellite TV, west region, customer satisfaction was 694 slightly down from 696 last year.

Rankings for individual providers by sector were as follows:

WASHINGTON, D.C.—The National Association of Broadcasters (NAB) hosted a virtual town hall for members on Sept. 28 where it provided updates on NAB’s policy priorities for the rest of the year and answered member questions. 

During the Town Hall, NAB President and CEO Curtis LeGeyt and executive vice president of industry affairs April Carty-Sipp also discussed the association’s advocacy efforts, educational initiatives and innovation projects.

LeGeyt discussed his recent testimony at a House Communications and Technology Subcommittee hearing on the state of the video marketplace and explained how NAB is urging the Federal Communications Commission (FCC) to refresh the record in its 2014 proceeding on the regulatory framework for virtual multichannel video programming distributors.

“We now have a major disruption underway and those audiences are migrating from cable and satellite over to the virtual MVPDs, and that’s having an impact on local broadcasters,” said LeGeyt. “What we’re asking the FCC to do is to reopen a proceeding that has been dormant for the last nine years that takes a look at whether those rules of the road that apply to the cable and satellite services ought to be extended to virtual MVPDs.”

LeGeyt also spoke about why it is critical that the FCC reform ownership, spotlighted NAB’s successful efforts to reduce broadcast regulatory fees on local stations, discussed the need for clarity in the FCC’s merger review process, provided an update on NAB’s advocacy against performance royalty legislation and talked about navigating partisan gridlock in Congress, among other topics. 

LeGeyt also stressed the importance of broadcasters’ grassroots involvement towards ensuring commonsense, effective laws and regulations governing the industry.

“The fact is lawmakers, the FCC, they want to hear from local broadcasters across the country,” said LeGeyt. “Certainly we can be making the policy arguments as a trade association here in Washington but our members need to tell the story of how this is impacting their service. And I would just urge you to visit our website – all the tools that you need are there – and staying in close partnership, that’s how we are going to be successful in Washington.”

During the meeting, LeGeyt and Carty-Sipp also urged NAB members to take advantage of educational resources available to them, including professional development initiatives through the NAB Leadership Foundation, DEI resources for broadcasters to diversify their workforces and cost-saving benefit programs.

LeGeyt and Carty-Sipp gave NAB members an overview of the educational sessions and innovative products that will be on display at NAB Show New York, October 24-26. This includes showcases of Next Gen TV and radio in the automotive dashboard, sessions dedicated to strategies, insights and tools to enhance broadcast businesses, and the Marconi Radio Awards honoring radio stations and talent from around the country.

The town hall concluded with LeGeyt sharing his perspective about the ongoing deployment of NextGen TV and the work of the Future of TV Initiative.

LeGeyt also answered questions regarding the ongoing Depend on AM Radio campaign and the status of the AM Radio For Every Vehicle Act, which now has more than 190 House and Senate cosponsors.

“Over the course of the last six months, local broadcasters around the country have been airing spots highlighting the importance of AM radio, the need for the automakers to maintain AM radio in the automobile. Local personalities have been highlighting this issue for their listeners, and as a result, those listeners have been taking action,” said LeGeyt. “More than 360,000 emails have come from listeners across the country to members of Congress, another 40,000 or so hits on social media. So the volume that we’ve been able to raise on this issue has been absolutely incredible and I think all of that activity is really generating the momentum that you’re seeing on Capitol Hill.”

WASHINGTON, D.C.—NAB President and CEO Curtis LeGeyt will be highlighting a number of issues needing Congressional and FCC action when he testifies today, Sept. 13, at a House Communications and Technology Subcommittee hearing titled “Lights, Camera, Subscriptions: State of the Video Marketplace.” 

In his oral and written testimony, the NAB said that LeGeyt will urge congressional action that would enable broadcasters to fairly compete and expand viewer and listener access to their services by passing the AM Radio For Every Vehicle Act and legislation reinstating the Diversity Tax Certificate program. 

LeGeyt will also discuss why the FCC urgently needs to modernize broadcast ownership rules, create a more transparent, fair and predictable process for broadcaster transactions, refresh the record in its vMVPD proceeding and encourage the rollout of NextGen TV/ATSC 3.0.

The hearing follows a recent blog post by LeGeyt detailing important areas where FCC action is necessary to keep broadcasting strong and enable vital local news. The blog was published after the confirmation of Anna Gomez to the FCC, with LeGeyt writing that an "FCC fully seated with all five commissioners can be the catalyst to keep broadcasting strong for the millions who depend on our free, locally-focused service."

In written testimony to the Subcommittee released by the NAB prior to the hearing, LeGeyt noted that as “we celebrate broadcasting’s centennial anniversary,...[b]roadcasters’ critical role as first informers, emergency lifelines and entertainment media has never been more important as misinformation runs rampant online. Yet significant shifts in the media and advertising marketplace pose challenges to this uniquely free and local model, absent needed congressional and Federal Communications Commission (FCC) attention.”

“In today’s hyper-competitive media landscape, broadcasting remains the most popular source of news, entertainment programming, sports and investigative journalism in communities across America,” LeGeyt said. “More than 181 million adults watch broadcast TV on a monthly basis, and more than 227 million listeners tune into broadcast radio each week. For the 2022-23 TV season, 79 of the top 100 series in primetime were aired by broadcasters.”

Unfortunately, broadcasters are currently forced to compete for audiences and ad dollars in a media landscape where they are forced to “operate under a set of outdated rules and restrictions....while other media and big tech platforms operate without restraint,” he said. 

“These challenges are exacerbated by Big Tech’s market power and largely unregulated practices in both the marketplace for digital advertising and as gatekeepers to digital content, including the local broadcast news that is accessed online (or in the automobile).” he said. “These collective pressures divert local advertising revenue away from broadcasters, making our uniquely free and local service that much more difficult to support. It also devalues our product when it is accessed online.”

To address those challenges LeGeyt urged congress to pass the AM Radio For Every Vehicle Act (H.R. 3414) and to pass legislation to reinstate the Diversity Tax Certificate program, which would help diversify ownership of broadcast companies. 

LeGeyt also urged Congress to encourage the FCC to make several reforms that will enable broadcasters to compete on a level playing field. 

These include: 

• “Modernize its local and national broadcast ownership rules to account for the rise, and increasing dominance, of digital media,” he said. “Modernizing these decades-old rules would allow broadcasters to continue to serve local viewers in a way no other platform can. It would allow broadcasters to compete for audiences, advertising and investment against digital platforms operated by tech giants with market caps in the hundreds of billions of dollars. Such reform would safeguard the viability of local broadcast journalism, as broadcasters could leverage local economies of scale and spread the significant cost of news production across more outlets. A recent survey confirms that larger market broadcast stations, and those stations with the resources to hire more staff, produce more hours of local news than small market stations and those with smaller news staffs.24 Modernizing ownership regulations also makes broadcasting more desirable for potential investors and new entrants, ensuring continued investment and encouraging greater diversity in local broadcasting and content.
• “Create a more transparent, fair and predictable process for broadcaster transactions. Mergers and acquisitions enable stations to achieve the economies of scale and scope that are necessary for broadcasters to thrive and serve their local audiences. If the FCC’s procedure governing transactions is fair and provides more business certainty, companies may be encouraged to pursue mergers that could help them better compete and invest in the critical local journalism they provide. A more transparent, just and predictable process allows broadcasters a legitimate chance to compete in the marketplace and continue serving the public.”
• “Refresh the record in its vMVPD proceeding. In 2014, the FCC initiated a proceeding to consider modernizing the definition of multichannel video programming distributors (MVPDs) to include virtual streaming services that offer linear programming. Nearly a decade later, the media landscape has completely transformed, yet the FCC’s languishing record does not reflect that drastic change and its impact on consumer access to local broadcast stations. There is simply no reason the FCC should not at least refresh its record in this proceeding to better reflect current marketplace realities.”
• “Continue to support the rollout of NextGen TV. Television broadcasters are transitioning our over-the-air broadcasts to a Next Generation Television standard, also known as ATSC 3.0. NextGen TV will enable local television broadcast stations to deliver a higher quality picture, immersive audio, more diverse programming, interactive content, and advanced emergency services. We appreciate the Commission’s support of the Future of Television Initiative, a partnership helping to bring the reality of NextGen TV to viewers across the country and unlock cutting-edge services that benefit public safety, close the digital divide and revolutionize broadcast TV. Ongoing oversight is critical to ensure a successful nationwide rollout.”

In the run-up to a hearing by the Communications & Technology subcommittee of the House Committee on Energy & Commerce on the future of the video streaming marketplace, the Preserve Viewer Choice Coalition has issued a memo blasting proposals to change the FCC rules governing how carriage and retransmission consent agreements are  negotiated. 

A number of large station groups have petitioned the Federal Communications Commission (FCC) to revive a long-dormant proposal to regulate video streaming services similarly to the cable industry of the 1990s. The head of the National Association of Broadcasters will be delivering remarks on Sept. 13 at the subcommittee hearing supporting changes in those rules. 

Currently, station groups negotiate agreements with traditional pay TV operators but the broadcast networks negotiate agreements with vMVPDs like Fubo TV, Sling and others. Broadcast station groups have complained that some of those deals reduce their revenue and have launched a group The Coalition for Local News Advocacy to lobby for changes in the rule. 

The Preserve Viewer Choice Coalition, which was formed by major entertainment companies, including the owners of four of the major broadcast networks, and streamers, complained that the “proposed regulation would force streamers to carry content viewers don’t want and give the station owners the ability to distribute network content they don’t own.”

The Preserve Viewer Choice Coalition also noted that when the FCC last considered the issue in 2014, it “received an overwhelming amount of opposition describing the harm the proposed regulation would cause to viewers, content creators, and local news providers. The public clearly does not want unnecessary government mandates to get in between them and their favorite content.”

The group also stressed that “the FCC has established it does not have the authority to turn back the clock on streaming services absent direction from Congress, a position Congress has reinforced. In a recent letter to the Commission, Representative Cathy McMorris Rodgers, Chair of the House Committee on Energy and Commerce, and Representative Bob Latta, Chair of the Communications and Technology Subcommittee, urged the FCC `to refrain from taking any action to impose outdated regulations on [video streaming services].’"

“This regulatory proposal would damage the streaming landscape by increasing consumer costs, limiting content options, and harming innovation in the space,” the group concluded. 

It also argued that “the proposed regulation would harm the very cause the station groups claim they are fighting for: — local news carriage. Existing local news stations are already ubiquitously available over the air, on cable and satellite–and on streaming services. Imposing outdated rules can only lead to less local news available for streaming viewers.”

“This debate is not about fair negotiations and rates for local content, rather it is an attempt by large station groups to co-opt network programming they do not own to increase the fees they charge streaming providers for carriage,” the group said, adding that stations already receive significant revenue from vMVPD deals. 

“[E]ven Nexstar CFO Tom Carter during their third quarter 2022 earnings call noted that affiliates get the same revenue from video streaming providers today that they do from cable and satellite providers—which they negotiate on their own,” the group said. “This was reinforced in Nexstar’s 2Q 2023 earnings call when the company noted that it recorded 7.7% growth in distribution revenue driven in part by revenue from video streaming providers.”

NEW YORK—FuboTV lost 118,000 subscribers in Q2, 2023 but is reporting that it is making progress towards its goal of being cash flow positive in 2025 with reduced losses and subscriber counts that were up 23% YoY to 1,167,000 subs.

The vMVPD also said that it exceeded North American guidance, achieving $305 million in revenue, up 41% year-over-year. 

Compared to the prior year, the company reduced its net loss by $41 million (with a $12 million improvement in net cash used in operating activities), grew gross margin to 7% and, in North America, expanded ARPU by 13% to $81.62, marking an all-time record. 

“We are encouraged with our execution in the first half of the year, including posting year-over-year double digit revenue and subscriber growth in the second quarter, while meaningfully reducing our net loss by $41 million,” said David Gandler, co-founder and CEO, Fubo. “With an improving ad sales backdrop we remain on track to achieve our 2025 positive free cash flow target. We are as excited and as confident as ever about the opportunities ahead to leverage our resources on the back of key strategic additions to our platform, including over 35 regional sports networks (RSNs) and more than 125 FAST channels, as well as the Maximum Effort Channel in partnership with Ryan Reynolds and Maximum Effort.”

Looking ahead to the third quarter 2023 in North America, Fubo is projecting 1,327,000 to 1,347,000 paid subscribers, representing 9% year-over-year growth at the midpoint, and revenue of $272.5 million to $277.5 million, representing 25% year-over-year growth at the midpoint.

WASHINGTON—A consortium of the largest television networks in the U.S. announced the formation of a new coalition to fight back against local broadcasters’ efforts to change the rules on negotiating carriage rights with virtual multichannel video program distributors (so-called “vMVPDs”).

The "Preserve Viewer Choice Coalition" includes ABC, CBS, Fox, Fubo, NBC, Roku, Telemundo, Univision, and Warner Bros. Discovery. The group said it  “will aim to protect consumer streaming choices and preserve a competitive online video marketplace.”

The group is a response to the launch last week of the “Coalition for Local News,” a group of local broadcast station groups, with the support of ABC, NBC, Fox and CBS television Affiliate Associations representing more than 600 local TV stations nationwide. The coalition is calling for rules around carriage rights between local TV stations and vMPVDs—like YouTube TV, Sling TV and Hulu Live+—be updated to mirror the rules already in place for  traditional cable and satellite pay TV video services. 

Currently carriage for local TV stations for vMVPDs is handled by the networks, resulting in a “streaming loophole,” that doesn’t give local broadcasters any control over retransmission consent, the Coalition for Local News said, and that the loss of potential revenues threatens local TV news budgets.    

Congress is also looking into rule changes—in June Sen. Maria Cantwell (D-Wash.) sent a letter to the FCC requesting that it refresh the record to address the current media environment and protect local news in the streaming era.  

The Preserve Viewer Choice Coalition claims that the local broadcasters coalition is attempting to hone in on their territory by trying to control negotiations for content they do not own. “These groups would revive a long-dormant FCC proceeding that provoked an overwhelmingly negative response during a comprehensive public consultation where commenters pointed to the potential harm to viewers, content creators, and local news providers,” they said. “Their proposed rule changes would turn back the clock and force online video providers and streaming platforms to be regulated like the cable industry of decades past.”

"In reality, these station group efforts are not about getting local TV content onto streaming platforms—that's already happening. Rather, this is about trying to use government mandates to interfere with business negotiations," said Bryce Harlow, spokesperson for the Preserve Viewer Choice Coalition. "Consumers deserve the freedom to access diverse video content and enjoy a wealth of choices, which is why we oppose proposed regulation that would threaten that choice, stem innovation, and increase the cost to consumers."

The coalition said that local TV stations benefit from the rise in vMVPDs, claiming that local TV stations can, in fact, negotiate for local content carriage. 

"Our goal is to protect consumer choice and the availability of local TV content on streaming platforms, and we believe that is exactly what the streaming marketplace provides today," Harlow said. "We want to embrace the future of content that streaming enables, not be dragged backward to a time when choice was limited, costs were high, and access was controlled by a handful of distributors. These regulations could eliminate options for streaming consumers and risk reducing the amount of local content available online today. We urge Congress and the FCC to refrain from unnecessary government regulation."

Lydie Neill, spokesperson for the Coalition for Local News responded:

"We don’t doubt the members of this newly launched coalition value local news—some of them even own local news stations, albeit as relatively small parts of much larger corporations. But the current system, which cuts local broadcasters out of the negotiation process for distributing our stations on the fastest growing streaming platforms, puts local news in existential danger. 

"So instead of fighting us, we hope these companies will work with us to modernize the rules so that local news can endure during this time of immense change.”

This article was updated July 28.

WASHINGTON, D.C.—Local broadcast station groups, with the support of ABC, NBC, FOX and CBS television Affiliate Associations representing more than 600 local TV stations across the country, have launched The Coalition for Local News. 

The new advocacy group said it will work to protect the future of local news in America and work with lawmakers and regulators on policies that will strengthen the local news business. 

"Local broadcast stations can thrive in a fair marketplace. We have demonstrated as much over the past 30 years of successful competition in the cable and satellite era. But no business can succeed when the rules don't apply fairly and reflect today's reality," says Mike Meara, former chair of the ABC television Affiliates Association and member of the Coalition. "The market has evolved dramatically and it's time for lawmakers and regulators to act to protect local broadcast news."

In announcing the launch, the group said that the future of local broadcast news is threatened by regulations that need to be modernized and the failure of government agencies to use the existing authority they have to protect the competitive position of local news outlets. 

One such area, the group said, is the so-called "streaming loophole" in the current FCC rule requiring cable and satellite providers, but not online streaming services, to negotiate directly with local broadcasters for carriage of their stations. Today, streaming services represent about one-third of the pay-TV market. 

Typically the networks, not the station groups, handle negotiations with such vMVPDs, such as FuboTV or YouTube TV, which has produced tension between affiliate groups and the media companies owning broadcast networks. 

This means, the group contends, that local television stations have lost control of their retransmission consent rights and that current rules have cut them out of the negotiating process with streaming services. 

Without the ability to negotiate directly with streaming services, local broadcasters cannot obtain the compensation necessary for them to sustain their substantial investments in local news, the new group said. 

This issue has also been highlighted by the NAB as something the FCC needs to address. 

The FCC itself began a process to consider the issue of the "streaming loophole" back in 2014 when it solicited public comment, but it has not addressed the issue since, the group said. 

Last month, Senator Maria Cantwell sent a letter to the FCC requesting that it refresh the record to address the current media environment and protect local news in the streaming era. 

The Coalition said that one of its chief priorities is urging the FCC to do just that – refresh the record now with comments that reflect the vastly changed market realities of 2023. 

Last week, the FCC announced its intent to consider updating a separate set of longstanding program carriage rules, an acknowledgment of the need to modernize video regulations in light of a changing marketplace.

"Congress and the FCC have always modernized federal rules in other contexts to keep them in line with advancements in communications technologies and changes in the marketplace. All we ask is that we modernize these regulations to reflect the current marketplace so local broadcasters are able to compete and thrive on a level playing field," says Michael O'Brien, senior vice president at The E.W. Scripps Company, and member of the Coalition. "This 'streaming loophole' takes direct investments away from local broadcasters and allows national media conglomerates to control the right to local broadcasters' signals, ultimately deciding the fate of local news."

The Coalition will be engaged in an array of advocacy efforts, including working with groups that recognize the vital importance of local news and urging them to get involved in this debate, the group said. 

More information is available at coalitionforlocalnews.org.

WASHINGTON, D.C.—Senator Maria Cantwell, D-Wash. and chair of the Senate Committee on Commerce, Science and Transportation has sent a letter to the FCC urging the agency to reopen its record on vMVPDs like YouTube TV and consider reclassifying them so that they would have to adhere to the same rules at traditional multichannel video providers. 

Broadcasters and the NAB have long pushed for revising the rules governing vMVPDs like Sling TV, FuboTV, Hulu with Live TV, DirecTV Now and others who provide packages of streaming channels over the internet. 

The letter complements remarks made by Sen. Cantwell at a June 22 hearing of the  Senate Comittee on Commerce, Science and Transportation. During the hearing Cantwell noted that the FCC opened a record in 2014 to examine the issue of how streaming services should treated but “has been stalled [on the issue] for nearly a decade.” 

“So today, I'm sending a letter to Commissioner Rosenworcel to refresh the record on this issue, and to say that streaming media services should bargain in good faith," Cantwell said. "Just as we've had to put good faith in other parts of the media landscape to make sure that we're adhering to the types of things that will give them a fair value for their content.”  

During the hearing President Biden’s nominee to the FCC Anna Gomez said that she agreed with the idea of reopening the issue. “Local broadcasting is so important,” she said. “It is where citizens can learn about the news about emergencies and the economic model is getting more and more challenging giving the changes in the marketplace. So if confirmed, I would certainly want to work with you, with the committee to understand this issue and delve into [the issue and see] what the commission can do given the current law.”

In response to Sen. Cantwell's remarks at today's hearing and letter urging the FCC to refresh the record on vMVPDs, NAB president and CEO Curtis LeGeyt issued a statement saying the “NAB is grateful to Chair Cantwell for her continued leadership to preserve and strengthen broadcasters’ valuable local journalism and public service in a shifting media landscape. As every consumer recognizes, streaming platforms have drastically changed their ability to access local broadcast content. We echo Chair Cantwell’s call for the FCC to update its vMVPD proceeding to examine this issue, and look forward to working closely with the Commission and lawmakers to inform their deliberations.”

The FCC initially didn’t take action to classify streaming services as MVPDs in part because the industry was still in its infancy and because of the complexity of the issue. 

“In the nearly ten years since the FCC launched the proceeding, the video service landscape has changed dramatically,” Cantwell noted in her letter. “However, today when viewers have more options for what content to watch (and which platform to watch it from), local broadcasts remain the recognized expert and dominant source for local news for many Americans. Moreover, local broadcast news has increased its content output in recent years. There is 90 percent more local news being broadcast than 20 years ago, producing an average of more than six hours of programming per weekday. Local stations provide news that is essential to our nation’s security. They keep the public informed and strengthen our democracy with on-the-ground reporting that counters misinformation and holds the powerful accountable.

"Conversely, during this same time period, more and more households have made the decision to `cut the cord,' as the penetration rate for traditional MVPDs in the United States has dropped from 88.3 percent in 2013 to 51.6 percent in 2022," the letter continued. "In their place, linear television streaming services, also known as virtual MVPDs (vMVPDs), are quickly growing subscribers. For example, when this proceeding was first noticed in 2014, none of the top five linear television streaming services (e.g., YouTube TV, Hulu Live, Sling TV, DIRECTV Stream, Fubo TV) even existed.”

Coupled with these changes, Cantwell wrote, local broadcasters now face a much more precarious financial climate in funding this local news because advertising has shifted from TV to digital, much of which goes into the coffers of a few tech giants. 

“Failure to be fully compensated for their content compounds the steady decline in revenue local broadcasters have experienced as advertisers have also migrated online,” she wrote. “For example, between 2000 and 2018, local television stations’ advertising revenue fell by 40 percent. We must ensure that new technological trends do not further endanger our local broadcasters, and so it is critical that the FCC consider whether the current retransmission consent model is sustainable and continues to benefit our local communities.”

Cantwell acknowledged, however, that the issue is a complex one. 

Pay TV operators have argued that ongoing subscriber losses and cord cutting is being fueled in part by rising programing costs and expensive retransmission consent agreements with broadcast station groups. 

Compounding the issue is the fact that vMVPDs have not seen the rapid growth that many analysts initially expected and that some have seen declining subs in the last year or two because programming costs have forced them to raise rates.  

The issue is further complicated by the emergence of free ad-supported bundles of content like Pluto TV, Tubi, Sling Freestream and The Roku Channel. 

Should these services be treated as MVPDs? And if not, how should regulators classify the bundles of streaming channels that traditional pay TV operators like Comcast deliver directly over the Internet to broadband customers?

Another related issue is who would negotiate retransmission agreements with the pay TV providers. Currently station groups negotiate the deals with traditional MVPDs while the broadcast networks handle negotiations with vMVPDs like FuboTV and other streaming services.

As a result, station groups share the fees with networks and get less revenue from the vMVPDs. But the broadcast networks may be unwilling to back a change that would return these deals to the station groups. 

DURHAM, NH—Cord-cutting hit an all time high in the first quarter of 2023, with the largest pay TV providers in the U.S.—representing about 96% of the market—losing about 2,215,000 net video subscribers, compared to a pro forma net loss of about 1,850,000 in the same period a year ago, a decline of more than 16%, according to Leichtman Research Group.

But the loss wasn’t restricted to just traditional pay-TV; virtual multichannel program distributors such as Hulu Plus Live TV and Sling TV also lost subscribers as well. As a whole, vMVPDs lost 394,000 subscribers in Q1; the only service to gain subscribers was YouTube TV, which added approximately 100,000 during a quarter when it announced an $8 rate increase that went into effect in April.  

The top pay-TV providers account for about 73.7 million subscribers—with the top seven cable companies having about 36.8 million video subscribers, other traditional pay-TV services having 23.4 million subscribers, and the top Internet-delivered (vMVPD) pay-TV services (now including an estimate for YouTube TV) having about 13.5 million subscribers.

Key findings for the quarter include:

• Top cable providers had a net loss of about 1,060,000 video subscribers in 1Q 2023 – compared to a loss of about 825,000 subscribers in 1Q 2022;
• Other traditional pay-TV services had a net loss of about 760,000 subscribers in 1Q 2023 – compared to a loss of about 625,000 subscribers in 1Q 2022, and
• Top vMVPDs had a net loss of about 395,000 subscribers in 1Q 2023 – compared to a loss of about 400,000 subscribers in 1Q 2022

“Pay-TV net losses of about 2.2 million in 1Q 2023 were more than in any previous quarter,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc.  “Similar to recent quarters, the record net losses appear to be as much a function of a slowdown in new connects as an increase in disconnects.”

The numbers match a similar report from MoffetNathanson released last week that noted total pay-TV penetration of U.S. households (including vMVPDs) has dropped to 58.5%, its lowest in 31 years.

The report comes a day after LRG reported that broadband providers added about 960,000 subscribers in Q1, however that comes as little comfort to the pay-TV providers whose broadband business is taking up the slack from the loss of video customers. Most of the additional broadband subscribers during the quarter were for the fast-growing fixed wireless 5G market dominated by T-Mobile.

IRVING, Texas—Nexstar Media Group has reached a new multi-year distribution agreement with Hulu that will make 122 of the  company’s local television stations and its cable news network, NewsNation, available to subscribers of Hulu + Live.

The deal also provides for the launch of Nexstar’s MyNetworkTV affiliates and independent stations on the virtual MVPD. 

Financial terms of the agreement were not released. 

WASHINGTON—Sometimes in Washington the best indicator that something big is brewing is when suddenly everyone clams up.  

Such is the case with the long simmering effort to impose retransmission consent regulations on streaming video carriage of local stations. Recent sub rosa negotiations are not very well hidden, since affiliate groups and lobbyists (including the National Association of Broadcasters) have submitted ex parte filings about their Federal Communications Commission meetings on the topic. Both FCC Chair Jessica Rosenworcel and NAB President Curtis LeGeyt have acknowledged that decisions are overdue on streaming retransmission policies for video via virtual multichannel video programming distributors.

10 p.m. Up for Grabs?
Moreover, the issue is bubbling up as the entire nature of the network/affiliate relationship is undergoing major revisions—from chatter about ceding the 10 pm (ET) programming hour back to affiliates (the network has decided to keep it for now) to the intense appeals from NBC, CBS, Fox and ABC for viewers to tune in directly to their streaming services, such as Peacock, Paramount+ and Hulu, thus bypassing local affiliates entirely. In addition, stations’ adoption of ATSC 3.0 and its IP implications could affect the retransmission requirements. 

The current chatter about vMVPD revenues comes amid forecasts that traditional retrans revenue to affiliates may drop from 50% to 39% of station income in the next few years, according to research firm BIA. Adding to the clout of networks’ (and other) streaming services is their libraries of off-network syndicated content, formerly a mainstay of independent stations (e.g. episodes of popular series such as “Seinfeld,” “The Office,” “NCIS” and “Friends”). Analysts wonder if audiences will tune into broadcast reruns if they can choose what to watch via streaming platforms. 

Yet, NAB, NCTA – The Internet & Television Association,  American Television Alliance (ATVA), the FCC and attorneys for stations and affiliate groups have all ducked TV Tech’s queries about what what’s going on, sometimes after initially agreeing to share updates on their negotiations but later saying that they couldn’t discuss activities because of current, unspecified conditions.  

NAB declined to respond to TV Tech’s questions about its streaming stance, but later that same week the association submitted an ex parte filing at the FCC describing its meeting at which it urged the commission to examine  “current streaming advancements [that] may affect the Commission’s calculus in determining whether virtual MVPDs should be deemed to be MVPDs.”  

At the same time, LeGeyt asked the FCC to classify vMVPDs as carriers that are subject to program-negotiation obligations.  NAB took that message directly to commissioners and their staffs in a series of November meetings. 

Some advocates had hoped that Congress would address the issue via new laws for retransmission fee guarantees, but those dreams were dashed by the mid-term election. A divided House and Senate are considered unlikely to agree on any communications financial issues and will “not pass much legislation,” a veteran media lawyer/lobbyist told TV Tech.

Much of the current effort is focused on the 2014 FCC proposed rulemaking that then-FCC Chairman Tom Wheeler initiated, which sought to determine if video services that are not facilities-based should be subject to the agency’s rules for  traditional MVPDs, such as cable or telco systems. In an interview with Politico Pro, LeGeyt said the NAB’s board wants the FCC to collect new feedback on the Wheeler proposal given “changes in the marketplace.”

Separately, Rosenworcel told Congress in November that she would welcome the chance to become involved in retransmission consent issues, particularly in disputes that affect viewer’s access to programs during blackouts of broadcast signals on MVPD systems.  She said the FCC would work with Congress, but emphasized that the FCC’s role would be to protect consumers if vMVPD fees or terms are excessive—with no mention of helping affiliates.

Affiliate Rift 
The retransmission situation also puts the spotlight on the growing rift between affiliates and networks. In a presentation to the FCC, four major networks’ affiliate groups pointed out that, “Unlike negotiations with traditional MVPDs where local television affiliates negotiate directly for the carriage of their FCC-licensed signals, the national Big Four broadcast networks have asserted near-total control over carriage negotiations with vMVPDs.” The group emphasized that deals are conducted “without any meaningful input from its non-owned Affiliate stations.”

Affiliates’ dissatisfaction with how networks are treating them is surfacing from multiple sources. There are unconfirmable reports that the networks have negotiated retransmission consent agreements with YouTube TV on behalf of the affiliates, but affiliates contend that their slice of that payment is too small. Other reports indicate that Comcast recently loaded all the NBC affiliates onto its Peacock streaming platform, after which NBC affiliates’ leadership issued a supportive statement. Analysts told TV Tech that lethargic support suggested that Comcast/NBC offered a good-enough deal, but no match to conventional cable retransmission fees.

The network vs. affiliates tension regarding vMVPD deals was especially vivid at the Big Four networks’ affiliate associations session at the FCC. When executives of the groups met virtually with FCC Commissioner Nathan Simington and his staff earlier this year, they urged the commission to consider making online video distributors abide by the same retransmission consent rules as traditional MVPDs, according to the subsequent report of their law firm, Brooks Pierce. 

A new retransmission analysis by financial firm Matthew Lochte of Bond & Pecaro concludes that overall retrans fees have reached “mature equilibrium” thanks to cable cord cutting. The analysis, distributed by  the Media Financial Management Association (MFM), points out that especially “for smaller broadcast companies” the affiliation fees could “exceed total retrans revenues” from MVPDs and vMVPDs.”

Parrott Analytics, in its latest, lengthy analysis “The Value of Broadcast Television,”  builds a case for the symbiotic relationship between streaming video and broadcasting – although it focuses entirely on networks.

 Parrott points out that in 3Q22, “a whopping 33.8% of its U.S. audience demand” of streaming content is based on broadcast network series. Viewers easy “access to new recent installments of mainstream network programming is a major selling point, providing consumers with a convenient on-demand option and providing networks with extended exposure,” says Parrot’s study.

“The networks themselves, and their significant domestic reach, can help expand a streamer’s audience demographic while raising additional awareness,” the report continues. “Once users are exploring broadcast titles within a digital ecosystem, they tend to stay there. Linear network shows provide a strong affinity halo effect that keeps audiences on track for related consumption. “

Emily Barr, former president/CEO of Graham Media Group and a vigorous defender of local stations and network/affiliate collaboration, acknowledges the complications because “there are so many players in streaming.” She said she’d like to see a “more cooperative relationship” as vMVPD develops since the network/affiliate relations is based on local stations receiving retransmission revenue.

“If the networks want to keep a relationship with affiliates, they [must create}  a way to let the affiliates partake in the revenue,” Barr says, noting that, “There have been some discussions in that direction on behalf of some of the networks,” but that nothing conclusive has emerged.

Barr concedes that cord-cutting will continue to affect cable/satellite retrans revenue, but she foresees considerable revenue as the process unfolds, pointing out that networks are playing both sides, with investments to nurture some streaming services. “They’re trying to have a little bit of both [traditional retransmission plus direct-to-consumer streaming]” she said. But Barr stops short of predicting how the game will play out. 

Slowing Retrans Fee Growth
Rick Ducey, managing director of BIA, underscores affiliates’ growing reliance on retransmission fees, which “will continue to be a substantial” factor, now accounting for more than 50% of local stations’ revenue. BIA’s forecasts envision that retransmission revenues could go down to 39% by 2026, and that local stations will receive a “decreasing share of it” as networks demand higher reverse compensation fees because of ever-increasing programming rights costs. 

As for the current quiet ballet between broadcasters and digital platform operators, Ducey believes that “networks and affiliates boards have to negotiate what goes on the platform and determine what the split is.” He expects that affiliates will get “some economic benefit from vMVPDs” but notes that some major TV groups are already making such deals, much as they’ve done for their conventional retransmission agreements.  Obviously, no details are being made public yet. 

Ducey acknowledges that the networks have taken the lead in vMVPD negotiations on behalf of affiliates and “are probably not doing the best job for their affiliates.” He points out that local stations see cord cutting as impacting transmission fees, which will lead to “things getting more out of balance in favor of the networks.” Ducey agreed that when he probed into FCC or Capitol Hill involvement in this streaming retransmission issue, he also got “don’t want to talk about that” responses, which he characterizes as “a non-denial denial that’s probably an affirmation of an underlying issue that is brewing. No one said, ‘it is a non-issue.’ Semantics matter.”

Ducey envisions that there will be changes as broadcast affiliates complete deals with local MVPDs. “At some point the cable industry has to say ‘our ability to pay has been in decline, so we have to re-adjust fees,’” he predicts. “Margins are being compressed; looking ahead [there are] different businesses” taking shape. 

Growing Recognition of Unfolding Problems 
NAB’s meetings with top FCC Media Bureau officials and commissioners’ staff emphasized that “significant developments in the streaming marketplace may impact the Commission’s continued consideration of its pending proposal ‘to modernize [its] interpretation of the term … [vMVPD] by including’ … services that make available for purchase, by subscribers or customers, multiple linear streams of video programming, regardless of the technology used to distribute the programming,” according to the follow-up by Rick Kaplan, NAB’s chief legal officer and executive vice president, Legal and Regulatory Affairs.

Kaplan also pointed out that current streaming advancements may “affect the Commission’s calculus in determining whether virtual MVPDs should be deemed to be MVPDs.” And he emphasized that “must address certain critical implications of its proposal, including how to ensure broadcast signals carried by vMVPDs are protected from piracy, material degradation, and distribution beyond a station’s local market.” 

Bolstering broadcasters’ expectations that they can reach deals with vMVPD operators are recent reports from Park Associates analytics firm that emphasize the continuing appeal of conventional video programming. 

“Adults 55 and older disproportionately favor a linear experience while viewers 18-24 prefer watching content from YouTube, social media, and the like,” Parks Research Vice President Jennifer Kent told TV Tech. “Consumers value live content because it is engaging, sometimes interactive, and personal to their interests.” 

She cited a recent 50:50 joint venture between Comcast and Charter Communications (the two largest cable operators in the U.S.), to develop a nationwide streaming platform. Although the competitive strength of such a unified service may affect broadcast network initiatives, Kent says that the arrangement “may help Comcast and Charter pull ahead in subscriber growth and gain an edge in the crowded OTT market.”

Financial Considerations 
Amid this regulatory rigamarole, Wall St. is also monitoring the impact of the vMVPD relationship with local broadcasting.

Laura Martin, senior entertainment and internet analyst at Needham & Company, doesn’t believe streaming is undermining local affiliates, contending that stations “will get paid if they have viewership,” but is not specific about how those payments will be made.

“The affiliate has value,” Martin said, but adding that direct-to-consumer viewing is all about generating specific data, so “local TV will be forced to compete on the local data.”  It has to be “really good data about what kind of content attracts and keeps a viewer. It must pull its weight.”   

DENVER—Frndly TV has announced that its low-cost vMVPD service has surpassed the 700,000 subscriber mark.

“This is another banner day in the growth of Frndly TV,” said Bassil El-Khatib, co-founder and chief marketing officer of Frndly TV. “We have focused on providing the best live TV service available at the most affordable price. We have more than tripled our channel offering and have done so with only a single $1 price increase since our launch.”

By topping 700,000 subscribers, Frndly TV has had subscriber growth of approximately 40% over the past year, the company reported. 

In November 2021, Frndly TV announced it past the 500,000-subscriber mark. 

“One of our philosophies in creating Frndly TV was to work hand-in-hand with our programmers in bringing consumers who were priced out of the larger linear video bundles back into the pay TV ecosystem,” added Michael McKenna, co-founder and chief programming officer of Frndly TV. “The by-product of the limited offering is that our targeted subscribers are loyal to both Frndly TV and its programming partners. The result is higher viewing consumption of our partners’ content and lower churn for Frndly TV.”

The company also noted that in 2022, Frndly TV has seen increased engagement in the platform, with viewership per subscriber up almost 10% vs. 2021. Reactivations have increased 33% versus 2021. And, annual subscriptions have grown to more than 22% of Frndly TV customers, the vMVPD reported. 

The service offers tiers of services starting at $6.99 per month. It has expanded its programming line to more than 41 live, linear channels, up from 12 at its launch and offers a VOD library of 10,000+ shows and movies. 

The National Association of Broadcasters is planning to ask the FCC to adopt new regulations that would recognize changes in the television marketplace and force streaming services to be regulated more in line with existing rules for broadcasters. 

In a Politico article, NAB President Curtis LeGeyt said that the effort to re-open rules that had been proposed during the Obama administration was discussed during a recent private board meeting. Such changes would be more inline with “changes in the marketplace” LeGeyt told Politico. It would also reflect comments NAB made to the commission earlier this year in an ex parte filing, which, while it dealt mainly with radio ownership issues, also touched upon reforms to existing rules that would include streaming companies. 

"While this submission primarily responds to invalid claims made by those opposing reform of the local radio rule, NAB’s legal and economic analyses also refute arguments against ownership rule reform more generally, including for local TV broadcasters," NAB said at the time.

Top of mind is retrans: broadcasters want the commission to look into expanding broadcasters’ ability to negotiate contracts beyond traditional cable and satellite pay-TV providers to services that carry broadcasters’ local channels, so-called “virtual multichannel video program distributors” (vMVPVDs) like YoutubeTV, Hulu and SlingTV.  

The move doesn’t come without opposition, however from within NAB, where the networks have differed with the association’s decision to pursue updated rules and the local stations, who are pushing to extend retrans rules to apply to streaming platforms. 

LeGeyt acknowledged this reality, telling Politico, “NAB membership is a large tent, and it is not uncommon for there to be differences of views among our companies. Like any member-driven organization, we move forward when a critical mass of our membership is in agreement, and even in those instances we strive for advocacy that maintains unity for the good of the broadcast industry and the tens of millions of Americans who rely on our service every day.”

The American Television Association, a critic of the NAB, especially over retrans battles that often result in broadcast stations pulling their signals, responded to the Politico article, saying the FCC should pay more attention to updating rules and protecting consumers from rising costs. 

“The broadcast industry wants to take the current framework, which is already responsible for thousands of consumer blackouts and massive annual price increases, and expand it to streaming,” stated ATVA spokesperson, Jessica Kendust. “The FCC should focus on modernizing and fixing the broken system, not imposing new costs on streaming customers.”

Cord-cutting continues to get worse, with the linear video industry suffering its biggest quarterly losses since COVID knocked out live sports and scripted programming, according to new figures from MoffettNathanson.

Traditional pay-TV distributors lost 9% of their subscribers year over year in the first quarter of 2022. The 9% rate of decline compared to 8.9% in the fourth quarter of 2021 and ties the worst level ever, set in Q1 2021.

Virtual MVPDs aren’t picking up lapsed pay-TV subscribers the way they used to either, contributing to a worsening picture for the traditional pay-TV bundle. In the first quarter, the conversion rate fell to 32.8% from 35.6% in the fourth quarter. 

When looking at traditional and virtual pay-TV distributors combined, subscribers were down 5.1% year over year, close to the all-time worst of 5.5% set in the second quarter of 2020, when COVID knocked out new scripted shows and most live sports.

In all, the linear video industry lost 2.1 million subscribers in the first quarter, the worst since Q1 2020.

Looking at company reports, MoffetNathanson said the biggest losers of subscribers in the first quarter were Comcast, down 511,00 and DirecTV down 496,000. DirecTV, spun off from AT&T last year, reported its latest subscriber numbers to bondholders and debt analysts.

Including estimates for some outfits that don’t publicly report numbers, MoffettNathanson said the Q1 performance left the linear TV business with 81.048 million subscribers.

Cable had 41.661 million subscribers, down 6.9%, satellite had 18.5 million subscribers, down 12%  and the telcos had 5.829 million subscribers, down 13.5%. 

Total traditional subscribers were 66.118 million, down 9% and the virtual MVPDs had 14.930 million subscribers, up 16.7%.

Separately YouTube TV reported on Tuesday that it now has more than 5 million subscribers.

“The rate of decline of the linear business is not something that ‘just happens.’ Many of the media companies have made conscious decisions to strip-mine their cable networks, shifting their best content to their streaming platforms,” note the research firm’s principals, Craig Moffett and Michael Nathanson.

“At the same time, they have raised prices relentlessly to offset declining viewership. Both strategies have alienated distributors, who are now more ambivalent than ever about trying to retain video subscribers who are themselves increasingly ambivalent about lower and lower quality video services for which they are asked to pay higher and higher prices,” Moffett and Nathanson said..

Several sports leagues have started to put games on streaming platforms, a trend that may accelerate, further hurting the linear TV business, which was expected to be supported by live programming including news as well as sports.

“Including vMVPDs, the rate of decline for linear video is hovering near its all-time worst levels. And the rate of decline for traditional distributors is the worst it has ever been. That’s not what one would expect if we were gliding towards a stable sports-and-news floor.”  

This article originally appeared on B+C.

SAN BRUNO, Calif.—YouTube TV has announced that it reached the milestone of five million subs and people with trial subscriptions in June of 2022, a little more than five years after it launched in February 2017. 

The five million milestone makes YouTube TV larger than any of the other internet-based pay TV providers (a.k.a. vMVPDs) and would rank YouTube TV as the fifth largest pay TV provider.

A report from Leichtman Research Group found that in the first quarter of 2022, Comcast was the largest pay TV provider with 17.66 million video subs (down 512,000 in Q1, 2022), followed by Charter (down 112,000 subs to 15.72 million), DirecTV (down 300,000 to 14.3 million), Dish TV (down 228,000 to 7.99 million), Hulu + Live TV (down 200,000 to 4.1 million), Verizon FiOS (down 78,000 to 3.57 million), Cox (down 80,000 to 3.31 million),  and Altice (down 73,600 to 2.66 million).

In a blog post celebrating the milestone, Christian Oestlien, vice president of product management, YouTube TV and Connected TV, reported that “When we launched YouTube TV five years ago, we wanted to make watching TV even more enjoyable — featuring a modern product experience without all the commitments, equipment fees and hassle. Today, we’re humbled that five million of you are currently on this journey with us.”

Oestilen added that “When YouTube TV started out, a group of engineers climbed onto the roof of YouTube headquarters while holding an antenna in order to build a prototype. Based on this experience, we almost settled on calling the YouTube TV you know and love today as `YouTube Air.’ And within the team that worked on this product, our project codename was `Unplugged.’ (Watching TV without a cable box — get it?).”

NEW YORK— fuboTV reported lower subscription levels and lower than expected revenues for  its virtual streaming service for Q1 this week. 

Subscriptions fell by 75,000 worldwide in the quarter ending March 31 and the company reported a loss of $140.8 million for Q1, compared with a loss of $70.2 million the same period a year ago. 

When looked at year-over-year, however the outlook was positive, according the company. Total paid subscribers are up 81% YOY to 1,056,245 total and advertising revenue was also up 81% YOY to $22.8 million. Record revenues of $236.7 million in the U.S. and Canada represented an increase of 98% YOY.

fuboTV says it states its key metrics on a year-over-year basis given the "seasonality" of sports content. 

The company also announced results for its Rest of World (France, Spain) streaming business for the first time, ending the quarter ahead of expectations with approximately 305,000 total paid subscribers and $5.5 million in total revenue.

Far smaller than its competitors, YouTube TV, Hulu and Sling in the vMVPD market, fuboTV offers a subscription package of more than 115 channels for $70. In March, it announced that it was dropping its “Starter” tier of 100 channels that cost $64.99 per month in favor of the “Pro” tier of 115+ channels. That price is in line with its competitors’ current offerings.  

David Gandler, co-founder and CEO, fuboTV said that the company experienced “challenges” during its most recent quarter but that it sees future potential in more interactive content, personalization and gaming (online betting).

“In our first quarter, against a challenging macro environment, fuboTV achieved strong growth in subscribers and revenue, with North American subscriber growth of 81% year-over-year,” said Gandler. “In a less robust advertising market, however, we experienced some pressure on adjusted contribution margin due to slower ad sales growth than we had initially expected, with ad revenue up 81% year-over-year. Importantly, we strengthened fuboTV’s balance sheet, ending the quarter with over $456 million in cash. This increased financial flexibility is expected to take us through 2023, and we are targeting positive cash flow and Adjusted EBITDA (AEBITDA) in 2025, with a relatively modest cash requirement anticipated in 2024.”

“We are committed to a business which replaces the decades-old basic cable package by giving consumers increased and improved content, ‘anytime anywhere’ access and mobility, increased choice and flexibility, personalization and interactivity—including gaming,” said Edgar Bronfman Jr., executive chairman, fuboTV. “Wagering remains an important pillar in our path to profitability and strategy to integrate interactivity into our live TV streaming experience. While striving to be the most compelling destination for cord cutters, fuboTV has started to enact a series of approaches to increase monetization, accelerate our ad sales business and further strengthen our unit economics.”

DURHAM—A third of all Netflix subscribers share their passwords with non-subscribers, according to a new report from Leichtman Research Group, which also revealed that 64% of Netflix subscribers stay honest, paying fully for the service and not sharing outside of their household. 

Specifically, the report showed that 15% of Netflix services are used and paid for by those that also share them with someone outside the household;  5% of Netflix services are used in one household but are borrowed from another household that is paying for the service and  3% of services are used by multiple households that share costs. An additional 3% of Netflix services are not paid for because they come with another service.

The findings are based on an online survey of 4,400 households nationwide and are part of a new LRG study, Internet-Delivered Pay-TV Services 2022.  This is LRG’s fifth annual study focused on the vMVPD category, along with other DTC streaming video services.

Overall, LRG found that 83% of U.S. households have at least one streaming video service from 15 top direct-to-consumer (DTC) and subscription video on-Demand (SVOD) services; including 67% of all households with Netflix. 

The survey revealed that 29% of all DTC services are shared with others outside the household and that 12% of all DTC services are fully paid for by someone outside the household. In addition, 34% of adults ages 18-34 have at least one DTC service that is fully paid for by someone else—compared to 14% of ages 35+.

Five percent of all households had Netflix in the past year, but currently do not— similar to 6% for Hulu, 5% for Amazon Prime, and 5% for live pay-TV services. Adults ages 18-44 account for 65% of all with a vMVPD pay-TV service. 

When it looked at vMVPDs, (YouTube TV, Hulu, Sling TV, etc.) the survey showed that nearly 80% of vMVPD subscribers said they are very satisfied with their service—compared to 76% in 2020, and 69% in 2018. Password sharing was also fairly common among these subscribers as well, with 23% of all vMVPD services shared by multiple households, including 7% of all vMVPD services that are fully paid for by someone outside the household.

The report comes amid a slowdown in the rate of subscriptions for the world’s largest streamer and provides more fodder for Netflix to justify its recent attempts to crack down on password sharing, which, if followed through, could add an estimated $1.6 billion to its bottom line annually.

“Password sharing is an inherent feature of most streaming services. Sharing helps to expand the user base and retain customers, but it also creates a gap between the number of households that have a service and actual paying subscribers,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc.  “For example, about two-thirds of U.S. households report having Netflix, but this includes about 10% of U.S. households that don’t pay for the service because it is borrowed from someone else’s subscription.”

DURHAM, NH—The largest U.S. pay TV operators saw fewer subscriber losses in 2021 than in 2020, according to Leichtman Research Group.

The research firm reported that pay-TV providers in the U.S. representing about 93% of the market lost about 4,690,000 net video subscribers in 2021, compared to a pro forma net loss of about 4,870,000 in 2020.

The top pay-TV providers now account for about 76.1 million subscribers, with the top seven cable companies having 41.3 million video subscribers, other traditional pay-TV services having over 26.8 million subscribers, and the top publicly reporting Internet-delivered (vMVPD) pay-TV services having 7.9 million subscribers.

Key findings for the year include:

• Top cable providers had a net loss of about 2,695,000 video subscribers in 2021, compared to a loss of about 1,940,000 subscribers in 2020;
• Other traditional pay-TV services had a net loss of about 2,890,000 subscribers in 2021 compared to a loss of about 3,845,000 subscribers in 2020;
• Top publicly reporting vMVPDs added about 895,000 subscribers in 2021, compared to a gain of about 915,000 subscribers in 2020
• Traditional pay-TV services (not including vMVPD) had a net loss of about 5,585,000 subscribers in 2021, compared to a net loss of about 5,785,000 in 2020

“While the pay-TV industry continued to lose subscribers, net losses in 2021 were fairly similar to those in recent years,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc.  “In 2021, the top pay-TV providers had a net loss of about 4.7 million subscribers, compared to a pro forma loss of about 4.9 million subscribers in 2020, and 4.1 million in 2019.”

ENGLEWOOD, Colo.—Dish says it lost 273,000 subscribers to its Sling TV vMPVD service in the latest quarter, ending Dec. 31, 2021, compared to a drop of 133,000 in the same quarter a year earlier. 

The company closed the quarter with 10.71 million pay-TV subscribers, including 8.22 million DISH TV subscribers, a reduction of 200,000 and 2.49 million Sling TV subscribers. Net income for Dish was down to $552 million, or 87 cents a share, from $733 million, or $1.24 a share, a year ago and revenue dropped 2% to $4.45 billion.

In a call with analysts, Dish Chairman Charlie Ergen attributed the drop in to several “headwinds” including the loss of Tegna viewers during the NFL season. That standoff was resolved when the two reached agreement earlier this month. Also during the quarter, Dish raised the subscription fee to Sling TV by $5 per month.

Despite the drop in subscriptions, Ergen was optimistic during a call with analysts this week. 

“Sling is a profitable business that will grow,” he said. “It's going to require a little patience, but with the platform overhaul last year, we're now positioned to be able to innovate and enhance the customer experience with new features and differentiated offerings.”

Dish, which is increasing its focus on wireless services, reported that its retail wireless net subscribers decreased by approximately 245,000 in the fourth quarter, compared to a net decrease of 363,000 in the year-ago quarter. The company closed the quarter with 8.55 million retail wireless subscribers.

LONDON—New research from Omdia has found that virtual pay TV subscribers are some of the best customers for video services, with the average virtual pay TV user in the U.S. utilizing 13.5 video services per month compared to 7.4 services in the average video household during 2021. 

The new data from Omdia’s TV & Online Video Intelligence Service, which provides subscription video on demand (SVOD), advertisement-based video (AVOD), and pay TV revenue forecasts across 100 territories worldwide, also found that in the U.S., traditional pay-TV subscriptions saw a 7% decline in 2021, ending the year with 69.7 million households with a traditional pay-TV subscription. 

Of the 125.1 million TV households in the U.S., 55.4 million did not have a traditional linear experience. At the end of 2021, there were 13.6 million virtual pay-TV subscriptions in the U.S. representing approximately 11% of TV households.

In consumer surveys, virtual multiprogramming video distributors (vMVPD) customers rated the user experience higher for virtual pay TV than SVOD, AVOD, or traditional pay TV, Omdia said.  

“Because virtual pay-TV services are internet-based and have no long-term contracts like traditional pay TV, user interfaces and experiences are received well and can adapt to changing customer needs,” said Sarah Henschel, principal analyst at Omdia.

Omdia’s analysis also showed that virtual pay TV in the U.S. continue to have more users per subscription than traditional pay TV, Netflix, and Amazon services. In April 2021, virtual pay TV had 3.7 users per subscription on average while traditional pay TV had 2.3. 

The Omdia data showed that in April 2021, YouTube TV accounted for 26% of total virtual pay-TV subscriptions but 39% of total virtual pay-TV users. 

Virtual pay-TV users typically skew younger than the average pay-TV and SVOD users, meaning they may be more tech-savvy and more likely to seek content post-cord-cutting, the researchers said. While password sharing and subscription sharing may initially seem like a bad trend for service growth, it has proven to be quite the opposite for YouTube TV. As a service, it has the most users per subscription, but that growth has allowed it to become the number one service in the U.S.

“These users are more than twice as likely to use transactional video services (both retail and rental), with this growing to 3x as likely for premium video on demand (PVOD) and more than 5x for sport pay-per-view (PPV),” Henschel said. “Virtual pay-TV users are also almost 3x as likely to have pirated video content. This over-indexing highlights that these consumers are content-hungry and are able to find the content they need—through paid means or otherwise.”

Although virtual pay TV users are highly engaged, price hikes continue to push consumers to fully cut the cord and just rely on SVOD or AVOD services, the Omdia researchers said. Average monthly pricing for a vMVPD service in the U.S. in 2021 was $58.89 per month compared to $99.44 for traditional pay TV and $8.75 for SVOD.

While virtual pay TV has attracted a customer base of avid video consumers, the business models for these services remain difficult, researchers explained. Virtual pay-TV services still pay carriage fees to channel owners to license content and channel groups often bundle multiple channels together during negotiations to require carriers to take all or nothing. This forces virtual pay-TV services to pay high margin prices for licensing with little margin left over for in-house profits. 

This also explains why companies in the U.S. that have done well have larger conglomerates backing them (Google and Disney) to offset operational costs and why the virtual pay-TV business has struggled to find profitability with small margins causing U.S. average pricing to double from 2017 to 2021, Omdia reported. 

“U.S. virtual pay-TV users skew toward high income 25 to 44-year-old males with interest in TV shows and sports,” said Max Signorelli, senior analyst at Omdia. “Live sports is one of the driving growth factors behind virtual pay TV, but it is still niche in size compared to pay TV or SVOD.” 

U.S. virtual pay TV accounted for 7% of subscription revenue but only 3% of total subscriptions, the researchers also reported. 

ARLINGTON Va. & EL SEGUNDO, Calif.—DirecTV Stream has announced that nearly 250 local PBS stations are now available in its streaming platform, completing the rollout of the public stations nearly nine months ahead of its original schedule for their launch on the service.  

DirecTV Stream started launching local PBS stations in mid-November, and since that time, has added nearly 250 local PBS stations in 198 Nielsen DMAs that reach 99% of all U.S. TV homes. 

PBS on DirecTV Stream provides each of the PBS member stations’ full broadcast channels streamed live, as well as the PBS video-on-demand library at no additional cost. 

DirecTV also announced that it has become one of the premiere sponsors for two important upcoming PBS documentaries – “Becoming Frederick Douglass” and “Harriet Tubman: Visions Of Freedom” – that shed new light on the lives of a pair of towering figures in the struggle to end slavery. 

As part of this collaboration, screenings of each film will take place in locations across the United States later this summer – sponsored by DirecTV – prior to the premieres of the films nationwide on PBS member stations this fall. As an additional component of the DirecTV sponsorship, Maryland Public Television will make educational materials available online to students in grades K-12.

“The rapid adoption of PBS on DirecTV Stream ensures that we’re delivering some of the best programming to customers across the nation,” said Rob Thun, chief content officer, DirecTV.  “Additionally, we’re honored to work hand-in-hand with PBS to amplify diverse voices and creators to help keep our nation’s history alive.”

“PBS’ partnership with DirecTV Stream allows our award-winning, educational content to reach more viewers across the country,” said Ira Rubenstein, PBS Chief digital & marketing officer. “PBS and its member stations offer more diverse and localized programming than any other broadcast network, and we are pleased to continue to share this content across a wide array of digital platforms.”

Unlike other major national broadcast networks, PBS boasts multiple local station affiliates in several cities, and DirecTV Stream has launched at least three different PBS stations into nine Nielsen DMAs and two local PBS stations into another 33 media markets. The markets with multiple PBS stations include: New York (3), Los Angeles (3), Chicago (2), Philadelphia (3), San Francisco-Oakland-San Jose (2), Washington (3), Boston (2), Atlanta (2), Seattle-Tacoma (2), Minneapolis-St. Paul (3), Miami-Fort Lauderdale (2), Denver (2), Cleveland (2), Charlotte (3), Indianapolis (2), Nashville (2), Columbus OH (2), Cincinnati (3), and Greenville-Spartanburg SC-Asheville NC (2), among many others with multiple affiliates. 

With the addition of these PBS affiliates, DirecTV Stream offers more than 1,000 local ABC, CBS, FOX, NBC and PBS stations, as well as 30+ regional sports networks from AT&T SportsNet, Bally Sports, NBC Sports, Spectrum SportsNet and top independents Altitude Sports, MSG Networks, MASN, NESN and YES Network. 

MIAMI—Hemisphere Media Group has announced that it has inked a multi-year carriage agreement with fuboTV to make all five of Hemisphere’s cable networks available in HD to subscribers of fuboTV's Latino channel plan in the U.S. and Puerto Rico.

The networks, which include WAPA América, Cinelatino, Pasiones, CentroAméricaTV and Televisión Dominicana, are expected to become available on the virtual MVPD's platform in Q1 of 2022.

“Virtual MVPD platforms continue to experience robust growth, and we applaud our partners at fuboTV for seeking to offer a comprehensive viewing experience to consumers, particularly Hispanic/Latino viewers, by providing them with the high-quality differentiated content they seek," said Alan J. Sokol, president and CEO of Hemisphere Media Group. 

Hemisphere owns and operates five U.S. Hispanic cable networks, two Latin American cable networks, a broadcast television network in Puerto Rico, a Spanish-language subscription streaming service in the U.S., a Spanish-language content distribution company and has an ownership interest in a broadcast television network in Colombia.

NEW YORK—In Q3, 2021, traditional cable, telco and satellite video sub losses rose to nearly 1.7 million compared to a year earlier but virtual subscriptions broke out of the doldrums to increase by almost 1.4 million, according to new estimates for total U.S. residential and commercial video subs from Kagan, the media research unit of S&P Global Market Intelligence.

That is helping smooth the losses for multichannel TV providers, Kagan said. 

It reported that the penetration of traditional multichannel TV services in the U.S. fell to only 52.7% in Q3. But when the subs to newer virtual multichannel video packages like Sling TV are included, the penetration rate is much higher, about 63.9% in Q3. 

When the virtual packages were included in the multichannel sub totals, Kagan reported that “the combined total customers with a subscription to a package of live linear networks dropped by an estimated 282,000, while virtual multichannel packages repeated evidence of third-quarter popularity with the return of football and other live sports.”

But Kagan also noted that penetration rates of the “traditional services are slipping toward the symbolic 50% mark. Estimated traditional residential multichannel subscriptions slipped below 68.6 million, accounting for less than 53% of occupied households. The combined virtual and traditional multichannel households accounted for less than 64% of occupied households at 83.2 million residential subscriptions.”

WASHINGTON D.C.—In a recent presentation to a FCC commissioner, Gray Television pitched the idea that the economics of local news could be strengthened by a variety of FCC actions, including a ruling on a 2014 proposal to apply retransmission regulations to online video. 

Gray Television counsel Robert M. McDowell made the proposals to FCC Commissioner Nathan Simington and his media advisor, Adam Cassady on May 21. The presentation is available here,

Noting that stations have increased local TV news by 60% since 2003 and that local news provides an extremely important source of information, McDowell argued that “to promote local journalism going forward, the FCC should be considering regulatory initiatives to permit efficient defensive business combinations and to further reduce outdated and counter-productive regulatory burdens that undermine broadcasters’ crucial revenue streams.”

McDowell also noted that “due to quirks in federal copyright law and the FCC’s regulations, online video distributors like Dish Sling, Hulu and YouTube TV currently are not required to negotiate retransmission consent with individual stations,” which reduces the revenue stations get to fund their newsrooms. 

To rectify this problem, McDowell argued that the FCC could move on a rule making action pending since 2014 that would classify linear online video distributors as MVPDs for retransmission consent purposes. 

MdDowell also pressed for regulatory relief in a number of areas that he contended would strengthen the economic viability of producing expensive local TV news. 

These include: small market duopoly relief; excluding local news from 15% programming limitation for local marketing agreements; expanding the Incubator Program to television with a focus on local news production; and reducing record keeping requirements.

NEW YORK—Nearly 7.2 million traditional multichannel (MVPD) subscribers opted to cancel their subscriptions in 2020, according to a recent report from Kagan, an S&P Global Market Intelligence media research group.

The 7.2 million combines traditional cable, telco and satellite pay-TV services. According to Kagan, at the end of 2020, only 57% of U.S. occupied households only had a traditional MVPD service. That number is better when combined with a virtual MVPD, with about two-thirds (66.6%) of households having a traditional service and a vMVPD, though that is still down from 2019.

The growth of vMVPD helped mitigate the number of people that dropped live linear channel packages, with 2.7 million new subscribers, but it was not enough to offset traditional MVPDs losses.

MVPD losses did slow in the fourth quarter of 2020, with a total subscription loss of 1.5 million, but vMVPD did not maintain its momentum from the third quarter, per Kagan, netting 223,000.

“[T]he full year decline underscored that the impacts of the pandemic amplified cord-cutting instead of insulating an industry built around home entertainment,” said Kagan.

For more information, visit www.spglobal.com/marketintelligence. 

ADDISON, Texas—The COVID-19 pandemic is resulting in a significant migration of traditional pay-TV customers to virtual MVPD platforms, according to a new report by Parks Associates, including just a little under half of surveyed U.S. broadband households with pay-TV planning to make the switch in the next year.

From its “Growth and Challenges for vMVPDs” report, Parks Associate has found that 43% of U.S. broadband homes that have traditional pay-TV are likely to switch to a vMVPD service within 12 months. During the COVID-19 pandemic, vMVPD services like Hulu + Live TV and YouTube TV have pushed their advantages in pricing, content and platform flexibility to help spur this growth.

The report also found that 17% of vMVPD subscribers had already switched in the previous 12 months. Price was the primary reason, with many saying that their cable or satellite service was too expensive. Other reasons that people cited for switching were some features only being available from an online service; a promotional offer; to watch specific channels; their previous service had too many channels; the cable/satellite service was too unreliable; desire to end contracts and termination fees; or not wanting to deal with required equipment.

Parks says that prior to the pandemic, vMVPD subscriber growth was waning and some vMVPDs were posting continued losses. While the pandemic has helped fuel recent growth, things like vMVPDs recent price increases make it uncertain how consumers will respond long term.

“Subscriber losses in traditional pay-TV continue, while the vMVPD category continues to grow, thanks to consumer price sensitivity and preferences for platform flexibility,” said Paul Erickson, senior analyst, Parks Associates. “Traditional pay-TV operators have online delivery in their roadmaps, if not already deployed. We expect vMVPDs will continue to grow dramatically and will gradually become the dominant offering in the pay-TV landscape.”  

“vMVPDs have substantial opportunity if they can avoid the pitfalls that typically drive pay-TV customer dissatisfaction, such as rising prices and inflexible content and platform options. With content prices rising and competition increasing, vMVPDs should remain conscious of consumer price sensitivity while keeping a strict adherence to a consumer-centric experience,” Erickson said.

For more information, visit the Parks Associates website. 

DURHAM, N.H.—While Leichtman Research Group’s report on the largest pay-TV providers’ third quarter 2020 video subscribers showed a net loss of about 120,000 subscribers, it actually represents one of the best quarters for the industry recently, in large part thanks to the growth of virtual MVPD services. It may be even better if recent YouTube TV news is factored in.

Q3 2020’s loss of 120,000 subscribers is a huge swing from the nearly 945,000 subscribers LRG reported were lost in Q3 2019. All services saw a smaller dip in its subscriber numbers year-over-year: satellite TV services lost about 775,000 in Q3 2020 compared to 1.14 million in 2019; the top seven cable companies lost 375,000, better than 2019’s 410,000; and telephone providers lost just 5,000 versus the 210,000 lost last year. 

When you combine the vMVPD services that LRG reports on (Hulu + Live TV, Sling TV, AT&T TV Now and fuboTV), which added 1.03 million subscribers in Q3 2020 (up year-over-year from 815,000), you get the net loss of 120,000 subscribers.

However, LRG’s report does not include numbers from the Google-owned vMVPD YouTube TV. It was announced in October that YouTube TV had crossed the 3 million subscriber milestone, including the addition of 1 million subscribers in 2020. It’s possible that the gains from YouTube TV could put pay-TV in the black for Q3 2020.

In total, LRG reports that the top pay-TV providers now have 82.6 million subscribers. That is made up of 44.3 million from the top seven cable companies; 22.6 million from satellite TV services; 8 million from top telephone providers; and 7.7 million from the available vMVPD services.

“With the return of live sports in 3Q 2020, internet-delivered vMVPDs had more net additions than in any previous quarter, and pay-TV overall had fewer net losses than in any quarter since 1Q 2018,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group Inc.  “It is more important than ever before to recognize vMVPDs as a key segment of the live pay-TV industry. Hulu + Live TV is now the fifth largest pay-TV service in the U.S., and YouTube TV (which is not part of LRG’s tracking data because it does not formally report quarterly results) now has over 3 million subscribers, including 1 million net additions thus far in 2020.”

WASHINGTON—The affiliate groups of the four major TV networks want the FCC to take a fresh look at OTT regulations that were first proposed in 2014.

This comes from a summary of a teleconference that representatives from ABC, CBS, Fox and NBC affiliate groups had with FCC Chairman Ajit Pai had last week, during which they discussed the current state of the video marketplace.

The affiliates detailed how traditional MVPDs have been greatly impacted by the COVID-19 pandemic, which is compounding previously present challenges with “increasing competition for advertising dollars … increasing concentration in the national programming distribution business and the rapidly developing trend toward streaming of video content,” the summary reads.

They requested that the FCC reevaluate proceedings dealing with virtual MVPDs that had been pending since first voted on in 2014. The regulations were crafted as a Notice of Proposed Rulemaking by then FCC Chairman Tom Wheeler and would define some OTT providers as MVPDs. This was supposed to offer these OTT providers the same FCC-enforced access to vertically integrated programming, but also require them to negotiate retransmission consent with broadcasters. As for which OTTs would classify  under MVPDs and if any other rights and obligations would apply, that was to be considered in the NPRM. However, there was no vote on the order as there was pushback on the proposal.

According to TVT’s sister publication B+C, if this NPRM was voted on and approved, it would reverse the tentative conclusion in the Sky Angel program-access complaint. In that decision, it was concluded that MVPDs had to have a facilities-based transmission path, as well as have control of both content and the transmission path. This is something that OTTs lack.

There has been no comment by the FCC on whether or not it will reexamine the NPRM.

The complete summary of the teleconference is available online. 

Editor's note: This story has been updated. The previous version said that the request was made by the TV networks rather than by the TV affiliates.

NEW YORK—Pay-TV, like so many other industries at this point in time, is taking a significant hit in part because of the coronavirus pandemic. In MoffettNathanson’s “Q1 2020 Cord-Cutting Monitor” report, the data shows that the first quarter of 2020 brought upon a record number of pay-TV subscription losses.

Traditional pay-TV subscriptions fell by 1.8 million in Q1, the worst quarterly results on record, according to MoffettNathanson. This also brought the annual rate of decline to -7.6%, another record.

Satellite TV was hit the hardest, with the third consecutive quarter of more than 1 million subscriptions lost, resulting in an annual rate of decline of -14.3%. MoffettNathanson says that number would likely be worse if its numbers were able to include lost bars, restaurants and hotels that temporarily suspended Dish Network subscriptions. Cable, meanwhile, saw about 600,000 subscribers cut the cord, bringing its annual growth to -4%, another record low.

The 63% of households with pay-TV services is the lowest it has been since 1995. MoffettNathanson also says that are currently as many non-subscribing households (46 million) as there were pay-TV subscribers in 1988.

The unemployment impact of COVID-19 is definitely contributing to these statistics, but so is the loss of live sports content on the air. As a result, MoffettNathanson projects that things will get worse in Q2.

It’s not just traditional pay-TV subscriptions seeing significant losses. MoffettNathanson found that around 341,000 subscribers dropped vMVPD services in Q1. AT&T TV Now, Sling TV and fuboTV are all expected to have lost subscribers, according to MoffettNathanson. Services that have seen growth have been small—Hulu Live TV has added about 100,000 subscribers, a deceleration, and YouTube TV, which MoffettNathanson says is the fastest growing vMVPD service, was unable to make a dent in the losses.

A huge part of this is that when Sony’s PlayStation Vue service shut down at the end of January, MoffettNathanson reports that its nearly 500,000 subscribers did not add a new service to replace it.

Total pay-TV subscriptions, both traditional and vMVPD, are decreasing at a rate of 5.3% per year.

Many companies have or are planning to launch streaming services that are gaining popularity among viewers, even in these current times. But, as MoffettNathanson puts it, “it is increasingly clear that as consumers climb into these lifeboats, they are leaving the (sinking) motherships behind.” MoffettNathanson does not believe that these new streaming services will be able to match the profitability that traditional and vMVPD services would have.

“When one’s ‘last line of defense’ (vMVPDs) has been breached, it is not unreasonable to ask … has the war now been lost?,” MoffettNathanson’s report reads. “What’s at stake is nothing less than the viability of the traditional cable network model writ large.”

NEW YORK—The rise of cord-cutting may be reaching its end, according to a 2020 outlook report from Evercore ISI. After years of an increasing number of consumers dropping their traditional pay-TV services, 2020 will see those numbers dipping.

After a reported 5.45 million lost subscribers in 2019, Evercore sees the number of consumers cutting their pay-TV plans to drop to 4.8 million. This is the first overall decrease in cord-cutters since 2015.

A major contributing factor to this fact, per Everscore, is that many of those who will have a traditional pay-TV subscription are committed to their services because of what they offer in sports and new content. Of 600 surveyed pay-TV customers, two-thirds of respondents said they are willing to pay at least $50/month for sports and news channels alone.

There are a number other factors that are contributing to the cord-cutting environment, including vMVPDs, SVODs and others.

Everscore found that vMVPD subscriber growth has slowed, with the category adding less than 1 million subscribers overall in 2019; this follows net additions of 2.5 million in both 2017 and 2018. In addition, the vMVPD market lost one of its outlets with the shutdown of PlayStation Vue. Everscore contributes this slowdown to lower promotional discounts, higher list prices and a possible increase in password sharing.

Similarly, another weak spot for pay-TV subscriptions that occurred in 2019 could be due to a promotional issue with DirecTV. As part of an apparent “purging” strategy, DirecTV has discontinued a two-year price lock promotion that may have inflated its numbers between 2018 and 2019 by nearly 1.4 million. The end of this promotion could have resulted in the loss of 700,000 video subscribers in 2018 and 2019, each. Those high cut rates could go away now that the promotion is over.

On the other side, SVOD is expected to experience a growth acceleration in 2020 thanks to the launch of new services, the scaling of young services and the continued growth of mature services. Apple TV+ and Disney+ launched in 2019 and are expected to see continued growth, while HBO Max and Peacock are slated for 2020 launches and to garner a fair amount of interest. There could be as many as 30 million incremental subscribers in the U.S. for these services in 2020, per Everscore.

For more information on this report, visit www.evercore.com. 

NEW YORK—While the popularity of streaming content among consumers is transforming the way people access their favorite shows, it is important for marketers, TV stations and advertisers to understand that there are differences in streaming activity, especially at the local level, according to a new article from ratings service Nielsen.

The article, “Streaming: Friend or Foe to Local Markets” published in the Sept. 16 edition of Nielsen Newswire, examines research from the organization’s latest “Local Watch Report” on the streaming activity of U.S. adults.

The piece puts streaming into perspective by comparing the time spent daily viewing non-linear content delivered over the top to that spent with linear TV, 57 minutes vs. two hours and 42 minutes.

Regardless of the difference, however, the article notes “there’s no denying the growing reach of streaming across the U.S.,” adding that the increase in streaming is uneven across regions and markets.

The article points to southern U.S. markets as an example. Over the past couple of years, device streaming device ownership in the south has outpaced all other regions.

Quoting Nielsen’s Q2 2019 “Streaming Meter Data Insights Report,” the article also notes that non-linear content from local stations accounts for 20% to 30% of all on-demand video streaming content.

The opportunity for local stations to leverage streaming is greater still, it notes. The linear content of local stations “is also increasingly being included in streams from vMVPDs (virtual multichannel video programming distributors)—and vMVPD adoption is rising.”

The article points out that local stations in LPM (local people meter) markets have an opportunity to benefit from this adoption because households in these markets, which represent about half of all U.S. households, spend the greatest amount of time streaming non-linear content to their TVs—exceeding the national average.

The same is true for stations serving small and mid-sized markets measured by set meters, according to the piece.

While offering stations a reason to leverage this form of distribution for local content, the access to a streaming device doesn’t “always correlate with usage,” which the article points out is a “critical consideration” that local stations must weigh when deciding where to invest in digital.

The article concludes by pointing out that it’s easy to make assumptions and generalize about the fast-growing streaming market. But such assumptions, like the greater popularity of streaming among millennials versus older adults, aren’t necessarily true if looked at on a market-by-market basis.

Thus, if stations, advertisers and marketers are to capitalize on the opportunities presented by streaming, they need a better understanding of the market, particularly on local level, it concludes.

The article is available online.

BOSTON—Local communities that collect franchise fees from pay-TV providers are worried that the increase in cord cutting could threaten the future of community access TV. In Massachusetts, one legislator has responded by proposing a bill that would allow municipalities to levy a fee on streaming services like YouTube TV, Sling TV and DirecTV Now (also known as virtual Multichannel Video Program Distributors or “vMVPD”).

In “An Act Relative to Digital Entertainment on Public Rights of Way,” Democratic state legislator Matt McMurtry is proposing a 5% fee on digital streaming providers who are “using the public rights of way in order to sell their services to Massachusetts residents.” The fees would be collected twice a year and distributed to the state general fund, municipalities and community media centers.

Although vMVPDs offer many of the same channel lineups as traditional cable TV, they have been exempt from paying franchise fees. Since these OTT (over-the top) services ride on the back of high-speed broadband provided by traditional cable TV, legislators like McMurtry see little difference between the two.

“This legislation is a much-needed update to the way consumers receive digital entertainment streaming services. Multimillion-dollar media companies are using our public rights of way to deliver their product, yet are not paying their fair share for that use,” McMurtry said. “Fees charged to traditional cable providers support our local community media centers, which are an important resource to local public, educational and government news and information. As consumers are offered alternative streaming methods, we need to modernize our law to assure that community media centers are supported.”

Approximately 85 legislators have signed on to the bill, which was proposed the same week that the FCC voted to deregulate local cable franchise fees, a move that opposing FCC Commissioner Jessica Rosenworcel said “cuts at public, educational and governmental channels across the country.”

“It goes beyond placing reasonable limits on contributions subject to the statutory franchise fee and jeopardizes the day-to-day costs, like staff and overhead, required to run such stations,” she added.

A dozen states have already imposed similar fees on streaming services (or in the case of California, Colorado and Illinois, have individual municipalities that have adopted such fees), according to public interest group Mass Access, which voiced its support for the bill.

“For decades, the funding provided by cable companies has helped provide funding to support vital programs at the municipal level—including community media centers and PEG channels,” said Melinda Garfield, president of Mass Access. “Community Media centers and PEG channels serve the community, they are an important and vital resource that we need to protect. These new streaming services should be held to the same standards, accept the same responsibilities, and make the same contributions as cable companies.”