Perry Sook, founder and CEO of broadcast giant Nexstar Media Group, isn’t a fan of streaming.
“The main reason we’re not in streaming is because we just don’t think it’s a good business,” Sook said during Nexstar’s first-quarter earnings call Thursday. “It’s not a business we want to get into to lose money.”
Noting Wednesday’s news that The Walt Disney Co. and Warner Bros. Discovery were putting Disney Plus, Hulu and Max in a new package for consumers, Sook observed that the industry is rebundling its assets.
“We’ve gone around the world to go around the corner and what we’re doing is repeating basic cable,” he said.
In some ways, basic cable was better than streaming is today, he said.
“One thing basic cable has that an amalgamation of apps doesn’t have is seamless navigation,” Sook said. “For viewers of a certain age, being able to change channels is something we grew up doing and something we still like to do.”
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“You probably don't have the number of content choices that you do in a traditional bundle,” he added.
In the three and a half years since most media companies started launching direct-to-consumer offerings, those products have resulted in billions of dollars in losses and market-cap destruction, Sook said.
On top of that, those companies disrupted their own linear businesses. Sook called that a “lose-lose proposition.”
Looking ahead, Sook said the industry is developing better business models.
Those models “are being developed with broadcast as the anchor as it always has been, given viewer demand for our must-have local and national programming including sports and special-event programming that relies on our unrivaled reach to maximize audiences,” Sook said.
“We think there are any number of ways that we can reach the consumer. Everyone wants to stream because they don't have broadcast assets that are free over-the-air that can reach 100% of the population,” he said. “They are trying to expand outside of that traditional pay TV universe, but we've been there for time immemorial.”
Speaking of broadcast assets, an analyst asked if Nexstar would be interested in buying CBS’s stations if Paramount is acquired and opts to break up the company. Last year, Nexstar was reportedly interested in ABC and its stations when The Walt Disney Co. was considering putting them on the block.
Sook said Nexstar never confirmed discussing Disney assets, and that in the current regulatory environment, it would be difficult for Nexstar (which has ownership-cap issues) to digest the CBS stations. “If that were to change, maybe, you know, our opinion would change.”
