Recently, multiple owners of local TV stations, including ABC, CBS, FOX, and NBC reported strong drops in revenue. Tegna reported revenues down 11% in the 3rd quarter compared to the same period last year. Nexstar the largest owner, saw TV ad revenue down 23% in the 3rd quarter of 2023 but was able to use revenue from The CW and other locations to help offset that.
This drop in revenue has left many local affiliates looking around for ways to get more money, and increasingly, they are looking at streaming services like Hulu, Fubo, and YouTube TV to help offset the losses they are seeing from a soft ad market. An ad market that Warner Bros. Discovery says they don’t expect to recover in 2024.
To get more money from streaming services, local TV stations need the FCC to reclassify streaming services as cable TV companies. Doing so will force YouTube TV and others to negotiate directly with locals like Nexstar instead of Disney, Paramount, and others. Just this week Nexstar’s CEO said that they get less from streaming services vs cable TV.
To help address this issue, recently local TV stations formed a group to put pressure on the FCC to reclassify YouTube TV, Hulu, Fubo, and more as cable TV companies.
These price hikes would force the end users to pay more for their favorite streaming services as many of these companies, including Hulu and Fubo, are still losing money on their live TV streaming services. This will force these companies to pass along the new costs to the end users.
The question now is will the FCC agree or will local TV stations need to find a new way to get more revenue if they are unable to get YouTube TV to pay.