LIKE HOLLYWOOD’S LABOR unions, network affiliates fear being left behind as major broadcasters tear down a road filled with blind curves toward the new-media future. And if history is any indication, those stations have every reason to be nervous.
Although Fox cemented a recent agreement with its affiliates allowing them to share in revenue from Web reruns, stations have been alternately anxious and irate since October, when ABC said it would make shows like “Desperate Housewives” and “Lost” available via Apple’s video iPods. At the time, the head of ABC’s affiliate board wrote the network saying it was “unsettling” that parent Disney would explore alternative distribution methods “without the fundamental courtesy of consultation” with its station partners.
Affils are hardly the only constituency feeling unsettled about who profits from digital downloads and other innovations sure to follow. Yet what’s striking as the National Assn. of Broadcasters convention gets under way is how weakened the affiliates’ bargaining position appears given where it stood during the early 1990s.
These days, affil complaints often seem like little more than a nuisance. Sure, a few general managers in red states preempt a program here or there due to affil concerns about racy content. For the most part, though, the major nets have plowed ahead without encountering significant roadblocks, even if each new potential breakthrough brings its own array of headaches.
It wasn’t always thus. Indeed, a dozen years ago affiliates wielded considerable clout, buoyed by Fox’s surprise strike in enticing stations to abandon the Big Three nets after it snagged rights to pro football. In the wake of those unprecedented defections, affiliates were suddenly courted, stroked and flattered like debutantes at a ball.
Then came the Telecommunications Act of 1996, which, among other things, expanded the percentage of U.S. homes a station group could reach from 25% to 35%. Not surprisingly, given economies of scale and the high profit margins on big-market TV stations, CBS and Fox pushed their holdings beyond even that cap, to nearly 40% currently.
With the major nets controlling so much real estate, affiliate input and support became less of an issue. The apprehension surrounding this scenario burst into the open in 2003, when affils — worried about possible further relaxation of federal ownership guidelines — organized the Network Affiliated Station Alliance to lobby against the major networks, insisting any additional growth by TV station groups would threaten localism in broadcasting.
A court challenge left the FCC rules in limbo, but the network-affiliate relationship remains an uneasy one, and the impact of new technology has only exacerbated the problem and stoked distrust.
So what now? Even if networks and affils come to an understanding over iPods and the Web, the playing field is shifting so rapidly it’s hard to see them staying on the same page for long. As a consequence, affiliates must pursue their own new-media strategies, capitalizing on their broadcast signals and unique local content to generate extra revenue.
Also, several stations are poised to become independent again thanks to the UPN-WB merger — a formula that has worked well for some broadcasters, which have found catering to the local market isn’t such a bad business model in a crowded media landscape.
“The local stations are starting to realize that their greatest strength is the fact that they are local,” says producer and former network exec Fred Silverman.
Where the network-affiliate union ultimately goes, then, is anybody’s guess, but the present clearly augurs a bumpy ride reminiscent of the fate that has plagued many a modern marriage — a situation where the parties still share a roof but discover they don’t have much in common anymore.