New threat to the cable guys as US stations aim to stream news
Published 16/07/2015 | 02:30
AMERICA'S Local TV stations are plugging one of the last major holes in mobile video: streaming their news to phones and tablets.
The move presents yet another challenge to cable and satellite providers, which are grappling with the widespread online availability of content.
This autumn, 112 US stations will begin streaming live newscasts through an app called NewsOn, one of several planned "over-the-top" offerings delivered online without a pay TV subscription.
And Verizon Digital Media Services, which offers technology that enables streaming on a wide variety of screens, is in talks with owners of more than 300 affiliates that want to supply programming directly to consumers over the internet, Ralf Jacob, chief revenue officer, said.
Stations could use the technology to stream news or other local programming.
Local broadcasters, like cable networks, are trying to adapt to the changing preferences of viewers, who increasingly want to watch programmes on their own schedules. The challenge for local news programmes will be to satisfy demand for mobile video without undermining audience numbers for traditional broadcasts, which generate hefty fees from cable operators as well as higher ad rates than online programming.
After years of isolated experiments with mobile news, a critical mass of the local TV industry is seizing on the idea. If they are successful, they could both increase viewing by current consumers and attract new ones, especially a younger generation of viewers who prefer watching television programming on mobile devices. But if current viewers "cut the cord," or drop pay TV service, broadcast stations and cable operators could both suffer.
Broadcasters are eager to follow audiences who are looking outside the television for news and entertainment, said Emily Barr, president and CEO of Graham Media Group, which owns five broadcast stations and is experimenting with mobile apps for newscasts.
Pay TV still reaches 100 million households, but the industry lost 0.5pc of its customers in the 12 months through March, according to MoffettNathanson analysts. Distributors have countered by offering customers their own apps with broadcast and cable networks. "It's a hedge of where the marketplace is going," said Justin Nielson, senior research analyst at SNL Kagan.
Local broadcasters receive fees from pay TV providers based on the number of subscribers, amounting to $6.3bn in 2015, SNL Kagan predicts. Returns from advertising are forecast to reach $21.1bn this year.
One illustration of the risks of getting it wrong is in Britain, where the BBC recently announced job cuts because viewers have moved from TV viewing to tablets and mobile devices, which cut its TV licence fees. (Reuters)