TV Networks and Affiliates: What Relationship Should They Have in The Streaming World?

• by Wayne Friedman , Staff Writer, Yesterday

TV networks are under a lot of pressure -- and TV station affiliates are along for the ride.

With linear TV in steady free fall, networks are counting on the continued upswing of streaming. But it can't come fast enough. Financial losses for those services to be started up continue to eat into whatever profit remains from those legacy businesses.

So, do they have time to deal and attention to give to their sometimes tenuous, sometimes suffering TV station affiliates?  

Paramount Global and its CBS TV station affiliates ran into a renewal issue with a virtual pay TV provider FuboTV.

This is one where the network negotiates exclusively for its TV stations. But some stations complained they would not be getting a bump in those revenue fees. As a matter of fact, some station affiliates say carriage fees under the new deal will be lower than previous carriage deals.

Early on, these network-affiliate agreements allowed TV networks to negotiate with the virtual pay TV provider to quickly give TV stations more coverage.

TV stations are now complaining that the original system is not working. For its part CBS says stations are not obligated to go along. They can do their own negotiations if they choose to.

Still, in its current situation, if a market rejects Paramount's efforts, the company will instead provide FuboTV with a CBS network feed to fill that spot for that market.

All this got TV Watch thinking about the long and somewhat troubled history of network-affiliate stations -- now disrupted with TV networks' pursuit of all things streaming -- even if some of the deals carry local TV stations, abd even if they might share in some of those revenues. 

But maybe TV networks' heavy focus on streaming is altering their longtime partnerships with affiliates.

With regard to the FuboTV deal, a CBS spokesperson says: “It appears that they are just trying to leverage our high-value CBS content to do so, which they don't have the rights to do.”

Increasingly independent TV station groups are looking to do their own thing -- taking on local/regional streaming businesses that need help in selling advertising time. In turn TV stations can package those deals with their local linear TV inventory, giving advertisers some much needed extra reach.

At the same time, TV station groups are trying to launch or promote their own locally based networks via local digital signals.

This doesn't mean that the network-affiliate relationship is over. Networks still benefit from local TV stations' promotional efforts that push viewership to the network-owned programming -- in prime time, daytime, late night, whatever.

But the push is coming mostly for its linear TV airings of those shows -- which have the other purpose of promoting the streaming airings of those shows.  TV stations continue to also bet heavily on its local TV news content for its continued value. 

Is all this enough to hold the TV network-affiliate relationship together -- for the long term?