The entertainment sector the world over has a problem that even the most brilliant minds have not yet been able to solve. It is not making enough money with traditional broadcasting, and it is losing money with innovating streaming platforms.
As demonstrated by the planned acquisition of Tegna by Nexstar, local U.S. TV groups are investing money to reduce offerings, which is something done when there aren’t other ideas on how to approach the future. Nexstar has stations in 35 of Tegna’s 51 TV markets, and the consolidation is expected to generate savings of $300 million a year. This compares to years ago, when home video challenged the broadcasting sector, and the TV stations countered by expanding and increasing offerings.
To review these changes and to figure out a potential future for the entertainment sector, VideoAge had a lengthy video-conference interview with the American Sean Cohan, president of the Toronto, Canada-based Bell Media, which operates CTV, the English-language national TV network; Noovo, the French-language national TV network; 33 locally owned and operated TV stations; Crave, a streaming service; 24 cable TV channels, and 11 FAST channels. He’s therefore the ideal top-level TV executive to confront all the challenges that VideoAge presented to him — first in the following preamble and, later, in a set of specific questions.
Historically, broadcasters have always faced many “insurmountable” challenges, starting with movie theaters, followed (in the U.S.) by domestic syndication, then home video, the cable-TV channel explosion, and now streaming platforms and social media.
For these latest challenges (streaming and social media), broadcasters countered by reducing drama content, increasing live sports coverage, adding news segments, and developing more reality shows (including awards shows), as well as transporting social media’s big personalities (who carry large, built-in audiences) to television.
This was all on the content side. On the technological side, which had always been broadcasters’ blessing and bane, they used digital technology to increase the number of channels, and allowed streaming to permit on-demand viewing. To their streaming features, broadcasters later added simulcast sporting events and big awards shows, followed by using the streaming window as the next day after broadcast.
All this, however, always depended on the primordial airwave technology. Recently, the TF1 Group announced that, starting in 2026, all Netflix subscribers in France will be able to watch all five linear channels from the TF1 Group, both live and on demand. At last year’s MIP London, the U.K.’s Channel 4 announced that its programs will also be available on YouTube. In effect, by migrating onto a streaming platform, a broadcasting TV network effectively becomes a FAST channel.
Apparently, this is an evolution for both broadcasters and streamers, where the former will have an additional platform, and the latter will enter into the realm of live television. However, transporting live broadcasting television could work for a national network such as TF1 in France, or even a cable TV network, but it would be difficult for local TV stations. And here’s where Cohan’s input becomes valuable. Cohan sees all the aforementioned challenges in terms of content. “There are challenges and opportunities facing our industry,” he said. “As a content player we’re seizing and navigating through them by focusing on delivering compelling content experiences across sports, entertainment, and news. Fundamentally, we need to deliver, leverage, and monetize content that people are passionate about in as many places as possible.”
VideoAge pointed out that, basically, Cohan see delivery as the main challenge. But now the TV sector needs to figure out how to deliver content. In VideoAge’s intro, it was mentioned that France’s TF1 is going to use Netflix to deliver its live content, which is interesting because that means that even folks without cable or an antenna can now watch a TF1 channel live on the streaming platform. This will work for a national network like TF1 but will be difficult to apply to the United States or Canada, where the broadcast system is based on local TV stations.
Cohan’s take? “I agree with that,” he said, then: “Sitting here as a broadcaster and streamer, we announced several months ago our plan to bring our networks CTV and Noovo, and to viewers as a result, to [our streaming platform] Crave. Will content be delivered over the Internet in the same format as broadcast? Sure! More content, more channels will be accepted on streaming platforms. I agree with that. We all know how the movie ends, but I’m not sure how we will get there!”
VideoAge reiterated that, right now, at least in the United States, broadcasting’s strength is in its local stations. The fact that local TV can deliver news, weather, and local sports makes the stations very valuable. But it’s difficult for a local station to be on a streaming platform, so VideoAge asked, how do you deal with that?
Cohan answered: “If you are both a broadcaster and streamer, you can actually turn these into your advantage. Streaming and on demand generally allows you to put more assets to work. There is more opportunity when you’re thinking one to one, as opposed to one to many.”
VideoAge pointed out that a national TV network like TF1 can be hosted live on a streaming platform since both parties will benefit — the network by increasing penetration and the streamer by adding subscribers. But for a platform like YouTube that depends on advertising revenue, a revenue-sharing model has to be developed. But the number of commercial spots sold by the broadcaster shouldn’t add up to those sold by the streamer.
In the U.S., Byron Allen’s Allen Media Group is carrying local broadcast TV channels on a streaming service called “Local Now,” where viewers can link by zip (postal) code to any U.S. local TV market and watch some local TV stations in simulcast with their airway broadcasts, with revenue generated from Local Now’s VoD services.
To all that, Cohan suggested that revenue-sharing for the YouTube model “differs by partnership.” He went on to say: “For global audiences, it’s going to differ by market. But the content originator gets a significant share of the proceeds associated with the sale of advertising.”
Turning to the topic of the future of the airways, Cohan’s said, “I don’t think broadcast goes away. I don’t think the airwaves go away. I think there’s now another series of ways to deliver or consume content that continue to grow.” Cohan went on to say that “broadcasters are feeling the pressure of change, and they are reacting differently.”
Nonetheless, the American Force TV Network (AFNTV), the TV service of the U.S. forces in Europe, is going to change its delivery mode from satellite to the Internet Protocol model, offering both VoD and live programs.
In addition, Cohan sees “consolidation as a form of synergy, which will bring economic benefits.” And to VideoAge’s contention that broadcasters are decreasing the amount of content (as opposed to in the past when broadcasters increased their content output to compete with home video), Cohan is of the opinion that “there is now more video content than there was yesterday. But it is not coming from broadcasters any more. It used to be that there were certain shows that that you defined as a streaming show, or a pay-TV show, or a broadcast show. Categories are going away. What makes a viewer select a show on a streaming service versus a show on broadcast is convenience and content discovery. It is a matter of helping people to find content.”
Finding content is indeed a big modern issue and, in this regard, according to Jonathon Barbato, co-CEO of the Los Angeles-based FAST service provider BEC, Tubi, Pluto, and other, similar streaming aggregators are no longer interested in launching (or carrying) more FAST channels. Why? To Barbato, “it is getting too crowded out there and it is difficult to navigate the programming guide.”
Cohan also added that, “to create big broadcast TV shows now you need cultural events like a Super Bowl, a national election, or other cultural moments.” Ultimately, Cohan said, “it comes back to making great content, informing consumers about it, and delivering viewers to advertisers. Aren’t we simply trying to just make sure that we’re delivering compelling content everywhere where people want it and where it makes economic sense, that we’re monetizing that content, making sure it’s as relevant as possible to advertisers and partnerships, and that we’re also, in the end, taking ownership or having a stake in the success of that content?”
(By Don Serafini)
Leave A Comment