Local TV Isn’t Ready For A Retail Future — But It Has No Choice

LocalProximity
Written By Tim Hanlon

Victoriano Izquierdo via Unsplash

For decades, local broadcast television stations in the U.S. have thrived on the attractive economics of a largely "wholesale" media model: Produce local news, carry network and/or syndicated shows, transmit them over the air, and get paid by advertisers seeking their audiences and by cable providers (via retransmission fees) seeking their viewers. It’s a dual revenue model that’s worked beautifully — until now.

Today’s media economy increasingly favors “retail” or direct-to-consumer (DTC) models. These are platforms that build direct relationships with audiences, monetize through subscriptions and digital ads, and control their own distribution. Netflix, YouTube, even Substack-driven newsletters are textbook examples. Local broadcasters, by contrast, still behave like legacy wholesalers, even as consumer behavior and advertiser dollars shift rapidly to digital ecosystems.

This leaves broadcasters in an increasingly untenable position. They sense the ground shifting under their feet, yet their operational structures and strategic roadmaps suggest they’re woefully unprepared for the transformation they now must undertake.

To be fair, the wholesale model has worked brilliantly for decades. Local stations enjoyed dual revenue streams from advertising and retransmission consent. Political ad dollars flowed like clockwork in even-numbered years. And the FCC’s must-carry and carriage rules ensured near-universal distribution. But those protections now mask a fundamental vulnerability: local TV has almost no direct relationship with its audience.

It also has no significant role in the rapidly-evolving data economy in which most (growing) media businesses participate. Digital-native platforms gather mountains of user data to optimize content, target ads, and refine product design. Most local broadcasters, hamstrung by legacy systems and a lack of digital talent, barely scratch the surface of this capability. Without robust first-party data strategies, their DTC potential is severely limited.

As “TV” viewership continues migrating to streaming platforms, this lack of audience connection is no longer just a weakness — it’s a threat to survival. Yet, most local stations have made only tentative moves toward digital transformation. Many have rudimentary apps, underwhelming websites (though thick in overly-aggressive programmatic ads), and minimal personalization or community engagement strategies. Even when stations stream their news online, it's often just linear newscast simulcasts or repeats, offering little of the interactivity or on-demand flexibility consumers expect in a DTC environment.

All of this would be more understandable if local stations lacked value to bring to the table. But they don’t. They possess deep community ties, trusted local news operations, and strong brand recognition, built over generations of viewership. These are powerful assets in a digital world saturated with noise and misinformation. What stations and their group owners lack is the willingness — or strategic imagination — to reorient themselves around the (direct) audience rather than the (indirect) affiliate contract.

Stations’ regulatory focus on enabling increased consolidation is also misplaced. Yes, scaling operations can yield short-term operational efficiencies, but it doesn't future-proof the business. The real challenge is reinvention. That means overhauling content formats, building multi-platform user experiences, developing data infrastructure, and investing in digital-centric skills and talent. It also means acknowledging that the product isn’t just the 6 p.m. newscast — it’s the overall relationship with the local audience, wherever they might be.

There is still time for local broadcasters to evolve. But the window is closing fast. As streaming platforms increasingly attempt to fill the local information void, and younger viewers bypass linear local TV news offerings altogether, the danger isn’t just irrelevance — it’s obsolescence.

Broadcasters can’t scale their way out of this. They have to build forward. And right now, most aren't even facing the right direction.

Tim Hanlon

Tim Hanlon is the Founder & CEO of the Chicago-based Vertere Group, LLC – a boutique strategic consulting and advisory firm focused on helping today’s most forward-leaning media companies, brands, entrepreneurs, and investors benefit from rapidly changing technological advances in marketing, media and consumer communications.

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