Recently FuboTV lost access to a large number of local CBS channels. Instead, a national feed replaced the local content giving you all the sports and popular shows but without the local news.
This CBS blackout on FuboTV was caused by locals not agreeing to a new contract Paramount CBS parent company signed with FuboTV. Local owners like Nexstar Media Group now say they want to go back to the old way and negotiate directly with services like YouTube TV, Hulu, FubuTV, and more instead of letting NBCU, FOX, DISNEY, and CBS do the negotiations for them.
Back when live TV streaming was new, they needed to go to each local TV station and strike a deal to stream their local ABC, CBS, FOX, and NBC. This was slow and meant many locals would be missing on live TV services. A few years ago, locals agreed with the parent companies behind ABC, CBS, FOX, and NBC to let them negotiate on their behalf to make one deal that covered all locals.
Now Nexstar Media Group, Sinclair, E.W. Scripps, and Gary Television have announced that they want to cut out the middle man and negotiate directly to bring their locals to streaming services.
Nexstar’s President Tom Carter, during his earnings call this week, said, “we firmly believe we should control our own destiny with regard to the virtual MVPDs instead of allowing the network to negotiate on our behalf.”
This will likely lead to more blackouts as locals have argued the deals they got with live TV streaming services were too low. Nexstar and others have called the FuboTV deal below market rates.
So this puts services like Hulu, YouTube TV, FuboTV, and more in a tough spot. First, agree to the demands of locals for more money and raise their prices or drop locals.
We have already seen services like YouTube TV make it clear they won’t be raising their price. Recently this unwillingness to pay more resulted in YouTube TV dropping the MLB Network. Now locals want even more money, and they are already some of the most expensive channels.
Look for the battles with locals to become more common. Over the next few years, many contracts with services like DIRECTV STREAM, YouTube TV, Hulu, and more are coming up for renewal. With local owners demanding a seat at the table now, these services have to negotiate with a long list of owners instead of just one company.