Local Digital TV Networks Look For OTT Transformation
Author: Wayne Friedman. Source: MediaPost
Locally based digital TV networks that occupy the local digital spectrum-owned TV station groups need a bigger platform to thrive. Or maybe just survive.
E.W. Scripps has plans for Katz Networks and its collective of digital multicast networks in 2017 for $302 million -- those brands including Bounce, Escape, (now Court TV Mystery), Laff and Grit.
Adam Symson, president-CEO of E.W. Scripps, told investors what should happen to these networks: They need to expand into the world of premium video streaming services.
Much of this is due to growing set-top box/platforms streaming distribution platforms. Establishing over-the-air networks -- like local digital multicast networks -- takes federal approval. And time.
Transitioning into direct-to-consumer businesses (D2C) is a much easier process. And with Roku and Amazon Fire TV, this can drive adoption quickly on a broad scale effort.
Scripps already has been building in this direction. Last week, it announced two new locally derived digital multicast-based reality networks, Doozy and Defy TV, one for women, one for men, respectively.
This comes as Scripps sees revenues for all its national networks rising, including the recent completed purchase of ION Media for $3.4 billion -- a 10% gain in revenue with profit margins of around 40% over the next several years.
All this brings up a bigger concept: Bigger national cable TV networks looking for a streaming home -- one that makes sense to viewers. For example, we already have HBO transitioning into HBO Max.
Now add some 200 to 300 cable TV networks, perhaps smaller in stature and nature. Perhaps those big media companies owning two dozen or so can stuff programming content into a wide-ranging premium video platforms.
So ask the key question: Who doesn’t make the cut?
Recently, NBCUniversal saw the writing on the wall when it came to NBCSN, a sports network with less stellar content than other channels. It will stop the network at the end of this year. There was going to be no NBCSN+ -- though NBC Sports Gold subscription service will remain.
At the same time, regional sports networks could be in trouble -- many virtual pay TV providers aren’t all that interested, especially when it comes to pricey wholesale carriage fees.
The bottom line is that big or super-engaging content via a large single digital platform gets noticed. Even the smaller local over-the-networks understand this.