Broadcast TV Networks Broaden Digital Offerings, But Worry About Core Businesses

ABC/Matt Petit

Television has migrated, not just beyond the living room, but out the front door. Meanwhile, the TV industry — particularly broadcast — has struggled to adapt to consumer demand for an experience that isn’t tied to the set-top box. But recent moves indicate that broadcasters are making progress. Such steps may not satisfy customer appetites, though; in fact, they may exacerbate some problems.

Fox said July 11 that it would begin live-streaming its primetime entertainment programming across all 210 U.S. local TV markets — becoming the first broadcaster to do so.

Two days later, ABC relaunched its free streaming service, expanding its live offering to an additional 14 local markets and unveiling original short-form series from talent such as Ty Burrell, Michelle Collins, and Iliza Shlesinger. “We felt like we saw an opportunity to expand our storytelling beyond the bounds of our linear schedule,” says Karin Gilford, senior VP of digital media for ABC Television Network.

Fox and ABC’s moves were the latest by a broadcast community that has become willing to if not fully embrace streaming, then at least hold its hand. In 2014, CBS became the first broadcaster to launch a paid streaming service, CBS All Access — originally a hub for library content and live streaming, soon to be a home to full-length original series. Last year, NBCUniversal launched SeeSo, a comedy-specific paid service that carries some NBC-library shows such as “Parks and Recreation.” The CW, which launched the short-form hub CW Seed in 2013, will make its app and website the primary home for streaming recent episodes of its series this year, as the network’s Hulu deal is set to expire.

Increasingly, broadcasters are prioritizing making their content available to watch on their own platforms. In March, ABC cut a deal with Warner Bros. that would give the network rights to stream all in-season episodes of future shows from the studio. When the broadcast networks locked their fall schedules two months later, most shows they picked up from outside studios came with stacking rights attached.

With more stacking and live streaming, viewers will have more options than ever for digital viewing of broadcast content. But that doesn’t mean streaming has become a real business for broadcasters. Streaming still lacks the reach needed to compare with the broadcasters’ core businesses. CBS, for instance, predicted in March that it would have 4 million subscribers for All Access by 2020. But top cable networks are available in more than 90 million homes and, despite cord-cutting worries, likely will be for a long time.

Frost & Sullivan analyst Dan Rayburn praises Fox for giving affiliates a stake in its live-streaming initiative by allowing them to sell local ads into it. But, he adds, “the Fox deal sheds light on many of the shortcomings in the OTT ecosystem.” Authentication — a major hurdle since the introduction of TV Everywhere, which allows pay-TV customers to stream content — remains the rule for most services. Sports programming, covered under separate licensing agreements, is not available through the same platforms as entertainment programming, if at all. And as more streaming options appear, consumers risk being overwhelmed. Apps from service providers and networks overlap, offering access to the same content and adding to potential confusion.

All those gaps in the streaming experience exist to protect elements of the status quo. “If you’re a broadcaster, why would you go direct-to-consumer and give up billions of dollars from the MVPDs?” Rayburn asks. If consumer choice is going to be streamlined, it will have to happen in a way that preserves the existing television ecosystem — otherwise no one will do it.

In the meantime, broadcasters are left to baby-step their way into the future while being careful not to tread on their business models.