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Week In Review: NBC Tries To Help Out Its Local Affiliates; As Restrictions Expire, Is Comcast Getting Frisky?

1. NBC Tries To Help Out Its Local Affiliates

NBC announced this week that they had come up with a framework that would allow their affiliate stations to take part in the wonderful world of virtual MVPDs and TV Everywhere. While this follows a similar announcement by ABC a while back, it in no way guarantees that virtual MVPDs will be able to come to terms with the frequently ornery affiliates.

For those not familiar with the way this works, the broadcast networks, by law, are only allowed to own 32% of the stations that show their programming. (No idea why or how that seemingly arbitrary number was arrived at, but it’s been in place longer than we’ve been alive.) The stations they own, typically in major markets like New York, Chicago and Los Angeles, are known as “Owned and Operated” or “O&Os”.

The remaining 68% of stations are independently owned, though many are part of larger groups like Sinclair and Tribune that own a number of affiliate stations.

Why It Matters

These local broadcast stations have been feeling the effects of the switch to digital more than most, as they rely on (a) viewers watching TV live or via a DVR within the three-day window from when the show first aired, and (b) viewers under 30 actually knowing that they exist.

Local stations frequently have their own programming. Local news shows are a given, but many have other locally-produced shows, and in the digital age, those shows have been falling by the wayside. So much so, that many observers have begun to question why local affiliates even exist, e.g. why the broadcast networks even bother to broadcast. (Billions in retrans fees from MVPDs is a big part of that answer. Just ask Aereo.)

None of the new virtual MVPDs have been able to strike deals with affiliates, which means that Sling TV viewers in markets like Des Moines or Knoxville can only watch the Big 4 networks via On Demand, and the Big 4 networks fully understand that down that road, that’s going to wreak havoc on their ratings.

Unfortunately, even with these news protocols in place, getting affiliates, which are often family businesses, to agree on anything, is a Sisyphean task. By actively resisting the inevitable shift to digital, these local stations are dooming themselves to the dustbin of history.

What You Need To Do About It

If you’re a local station owner, get with the program. You have everything to gain and nothing to lose from signing on with the virtual MVPDs and (especially) your current MVPD’s TV Everywhere app. This is how people are going to be watching TV in the future. You can resist, but as they say in the old sci fi movies you frequently show on weekend afternoons, resistance is futile.

If you’re a hipster, you might think about making watching local affiliates on 13-inch black and white TVs using rabbit ears part of your repertoire, along with vinyl records, Sega, Atari, Commodore, artisanal absinthe and the like.

 

2. As Restrictions Expire, Is Comcast Getting Frisky?

When Comcast bought NBCU back in 2011, the Obama-era FCC and Justice Department put a whole gaggle of restrictions on them to make sure that neither Comcast nor NBC gained any sort of advantage over their competitors from the merger.

Those restrictions will be expiring in 2018 and Comcast is taking a look at what they can and can’t get away with.  That’s why NBCU is looking to create a CBS All Access-like app for 2018, and why they may start speaking up about how Hulu is managed. According to reports, NBC was not happy about the introduction of an ad-free version of Hulu back in 2015, but did not have standing to say anything about it due to the prior regulations.

Why It Matters

Whatever Comcast does or doesn’t do is going to help craft the blueprint for the AT&T/Time Warner merger and any future MVPD/network mergers.

With the rise of time-shifting and library-based viewing, the ability to serve up true addressable advertising—sending different ads to different demos during the same show—is going to be critical and so MVPD/network mergers will be under the microscope in terms of how they handle those transactions. That alone is enough to raise eyebrows about how clear the separation of church and state is going to be.

What You Need To Do About It

If you’re Comcast and NBC, be smart about how you handle things. Even the Ajit Pai FCC will slap you down if you go overboard and you’ll ruin things for everyone else.

The rest of us just need to sit back with our popcorn and enjoy the show as it plays out over the next year or two.

 

NB: A number of people have written to us about a blog post that’s been making the rounds claiming (yet again) that TV may soon be dead. We don’t have time to review it point-by-point, and while it does raise some valid concerns, we’d place it in the category of “nothing gets clicks like a good TV Is Dead article.”

Enough said.