In a boosterish, 12-page slide deck issued this morning, top station group owner and CW parent Nexstar Media Group made the case for broadcast television and saluted last month’s Disney-Charter carriage deal.
Broadcast TV networks have the widest reach, especially when airing live sports, the presentation argued, but get paid proportionately less than cable networks. That sets the stage for future distribution revenue growth.
The Disney-Charter deal is “a positive for broadcast TV,” Nexstar said, because it combines direct-to-consumer streaming services with broadcast and cable network. That more unified approach “should reduce churn,” Nexstar said. “By providing more content that viewers want at a competitive/better price than the DTC bundle, subscriber trends should stabilize.”
The cable bundle also was “bloated,” the company added. In the case of Disney-Charter, networks like Freeform and Disney Jr. lost distribution on the nation’s No. 2 cable platform as distributors continue to cull the field. That is an indication that dollars from pay-TV operators that used to go to securing networks at ever-escalating carriage rates will be “reallocated to premium content like broadcast television.”
Nexstar last fall took a 75% stake in The CW, with prior 50-50 partners Paramount and Warner Bros. Discovery retaining 12.5% apiece. The company already had been banging the drum for broadcast TV on the local level, but has become a vocal advocate for the setup on the national level. The CW has launched weekend programming for the first time and has also entered the sports business, locking up rights to college sports, auto racing and pro golf.
Despite all of the optimism, times are challenging for the traditional TV bundle. From peak penetration of 100 million homes barely a decade ago, the bundle has been shedding millions of paying customers each year. That downturn has jeopardized the dual revenue stream of advertising and distribution and undermined the efforts of a number of media companies. Disney, as it was pursuing a resolution with Charter, has also been holding talks with a number of parties (including Nexstar) about its linear TV assets, including ABC and local stations. Deadline