When The Walt Disney Co. announced Friday it was moving Dancing with the Stars from ABC after 30 seasons to Disney Plus, it underscored how media companies are prioritizing streaming at the expense of traditional media, including the broadcast networks.
For the network‘s affiliates — allegedly partners — it was the latest slight. The networks promote how easy it is to find their shows on their own direct-to-consumer services, Disney’s Hulu and Disney Plus or NBCUniversal’s Peacock, even though the affiliates are paying substantial program fees to the networks for those shows.
The timing of Disney‘s latest move is an interesting piece of choreography. The National Association of Broadcasters will be holding the NAB Show in Las Vegas later this month and networks will be meeting with their affiliates there, setting up an interesting opportunity to tango.
“Dancing with the Stars will definitely be a topic at the meetings,” said a source at one major station group.
Some mostly smaller affiliates with traditional sensibilities are expected to be quite angry about this latest indignity. Larger station groups see it as part of a long-term trend affecting the network-affiliate relationship as TV turns to streaming. Either way, there are issues that need to be addressed.
Just as the media giants stepped over theaters by putting their movies on HBO Max and Disney Plus, slowly but surely broadcast content is heading in the same direction.
When NBCU introduced Peacock, it said episodes of the Tonight Show with Jimmy Fallon and Late Night with Seth Meyers would be available to premium subscribers before they appear on broadcast. (Some affiliates bristled at the plan and that feature was delayed by the pandemic.) Some NBC sitcoms that might have otherwise been canceled — AP Bio, for example — can also be found on Peacock.
NBCU also made Peacock the home of its Olympics coverage, contributing to plunging ratings on the network and at its affiliated stations.
Paramount, formerly ViacomCBS, has moved some series that were popular with CBS viewers from the broadcast network to its streaming service, Paramount Plus. Those include SEAL Team and Evil.
Disney’s Dancing with the Stars two-step continues in those footsteps.
As this is going on, it’s important to remember that, unlike the old days when networks paid affiliates to broadcast their show -- and commercials -- affiliates these days pay programming fees to the network in return for being able to run primetime programming and sports. These fees suck up a big chunk of the revenue the station groups get from cable and satellite operators after they negotiate retransmission fees.
Are the networks going to reduce their demands for affiliate payments as good programming shifts from broadcast to streaming? “Good question,” said one station group executive.
Network shows like Dancing with the Stars benefit from the promotion local stations give them. The stations often work with the network to find contestants from their own market, and use their newscast to hype a flamenco favorite from Fresno. That music may stop.
The networks and affiliates also have to continue to work out how they share payments from streaming virtual multichannel video programming distributors like YouTube TV and Disney’s Hulu Plus Live TV. Those vMVPDs negotiate retrans rights directly with the networks, rather than needing to go market by market, station by station.
News presents yet another issue. The networks have their streaming services and increasingly station groups are creating their own streaming apps, creating new competition and tension. Many stations have signed up to have their news content streamed on national services like VUit, partly owned by Gray Television, and Sinclair Broadcast Group’s Stirr.
Overall, stations are pumping up local news, their most profitable programming, because they retain and sell all of the advertising time. They are programming more and longer newscasts, which has put the squeeze on the syndication arms of the big media companies.
As this over-the-top dance plays out, station owners might get a chance to lead, thanks to the next big change in technology. At least that’s what station buyers like Standard General (backed by Apollo Global) and Byron Allen’s Allen Media Group are counting on.
Since the advent of digital broadcasting, station groups large and small have been launching their own national networks on their secondary broadcast channels. Weigel Broadcasting’s MeTV and E.W. Scripps’ Grit and Bounce TV, draw bigger audiences than cable channels like LMN, CMT, HLN, Science Channel or OWN.
In addition to Weigel and Scripps, station groups Sinclair Broadcast Group, Tegna, Nexstar Media Group and Allen Media Group own and distribute multiple diginets.
That trend is likely to expand greatly as NextGen broadcast technology gets adopted by consumers. NextGen TV, using the ATSC 3.0 format, enables stations to broadcast many more diginets on their signals, so there will be more of them.
And while those diginets now mostly carry network reruns, some, like Bounce TV, already carry the kind of original programming that used to appear only on broadcast and cable channels. As their audience — and ad revenues — grow, it’s only a matter of time before they’re producing more of their own dramas and sitcoms.
As media companies gamble on a streaming future, broadcast stations might still be worth betting on, too. ■
