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Houston (and Cleveland, and Wichita, and. . .), We Have A Problem

Tim Hanlon

Two local TV station streams as seen on Tubi earlier this year.

The exponential growth of the FAST streaming channel landscape over the last few years has been a largely mixed bag for local broadcasters.  

On the one hand, the rise of smart TV/CTV platforms has enabled dozens of stations — both network O&Os (“owned and operated” stations the broadcast networks actually own) and independent affiliates (the ones they don’t own but contractually license to carry their programming) — to stand up free streaming extensions of themselves as viable local viewing options (even out-of-market) among the hundreds of other free channels that now crowd FAST menus. 

Conversely, local streaming has been held back by the legacy economics of the television business (e.g., pay TV retransmission, network-affiliate reverse compensation, network & syndication copyright, etc.), that still prioritize TV-first (or -only?) revenue models. The result is a raft of very similar-looking, brand-hollow FAST afterthoughts that feel more like never-ending (and repeating) newscasts than fully programmed "stations."

Product issues aside, it is ad monetization - more specifically, the sheer lack of it - that currently renders the entire proposition dubious; one only has to click around the "local news" section of any major FAST aggregator (visuals above, as seen on Tubi) to see that things are broken.  Neither local broadcasters, nor FAST aggregation tvOS platforms seem to know how to yet solve for successful local station FAST channel advertising.

Luckily, the problems here are not intractable - and the opportunity for generating substantial topline revenue (not to mention increased viewer satisfaction) is very real.  But it does require work - including some loosening of broadcasters' legacy "TV-first" mindset.

Here's potentially how:

  • While CTV audience providers like Locality, Premion, Compulse, and Madhive specialize in enabling broadcasters to extend their linear spot advertisers' reach into broader "off-air" streaming environments, none currently extend the privilege into stations' O&O streaming inventory; there's first-mover advantage for the firm that does, and aggregating internal station group inventory might be the first place to try. 

  • A myriad of small-to-midsize independent streaming publishers (for example, those represented by the Independent Streaming Alliance) similarly struggle with amassing enough inventory/advertisers to take advantage of programmatic ad networks, but there are indeed "riches in the niches" as magazines and cable TV once proved; opportunity awaits for a smart "ad-network-meets-rep-firm" (like new startup StreamVantage is attempting) to bundle and target these small-but-mighty CTV audiences, including out-of-market local viewing.

  • Local TV spot sellers should be encouraged/incentivized to extend linear station buys/avails into local streams - and positioned as incremental audience, especially in live newscast streaming simulcasts.

  • An even easier short-term revenue fix is to migrate broadcast direct response (DR), direct-to-consumer (DTC), and/or "run-of-station" (ROS) advertising - longtime low-cost staples of station ad sales - to fill what programmatic algorithms somehow cannot; again, incremental audience, and some revenue is better than no revenue!

  • In the interim, stations can do far better than off-putting countdown clocks and interminable "We'll Be Right Back" slates.  If ads aren't filling inventory, at least think smarter about how to better retain and heighten viewing engagement during pods with public-minded (and potentially sponsorable) content like: local organization PSAs, community events calendars, interstitial factoid content celebrating holidays, events, celebration months, etc. — ANYTHING engaging that keeps viewers interested! 

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