When the fronts return to New York City in mid-May after a two-year pandemic hiatus, broadcast television is expected to play the second round. While ABC, NBC, and CBS will continue to enjoy their moments, Disney is expected to offer the ad tier with Disney+ subsidies, while Paramount Paramount+ and NBCUniversal will be showing off to promote Peacock. After years of preparing to go live, sin is no longer an institutional priority for the Hollywood giants.
But at least there are a few companies bucking this trend and leaning toward linear TV, hoping to help it stand out in a world where everyone seems to be trying to chase Netflix, which itself is going through a rough patch as its subscription grows. slows down. Peter Olsen, Head of Advertising Sales at A + E . networks.
Companies like A+E, Univision and Fox And AMC Networks You’re betting that even as the pay-TV package continues to slowly and steadily decline, embracing the linear side of the business can still be profitable — and help them bridge the gap between the uncertain present and a more confident future. “There is always a lot of discussion in our work about ‘this is dead, this is new,'” Olsen says. “Things don’t die, they just evolve. And I think what we’re doing is we’re taking a very calculated, sober, and balanced approach to this, which is yes, the traditional distribution is in a tricky direction, isn’t it? But… there is still a way to reach people through creative distribution partnerships and all that. “
The future of Linear TV is hard to predict, and no company is willing to make any big statements, just to explore questions. “Older viewers may cut the umbilical cord, but younger viewers are increasingly asking, ‘What is a cord? Moffett Nathanson, an analyst, quipped Michael Nathanson in a report in March.
However, filing a March 4 SEC from Discovery Inc. Prior to its merger with WarnerMedia sheds some light on the near-to-medium future of pay television. The filing noted that Discovery expects revenue from its US television business (Food Network, Discovery Channel, HGTV, etc.) to decline 4% annually through 2025, with expenses expected to rise. At WarnerMedia, domestic linear revenue is expected to decline just 2 percent annually through 2025, potentially benefiting from that company’s suite of sports rights, including NBA basketball, MLB and March Madness.
Sports remain one of the main drivers of linear television, even as companies like NBCUniversal and Disney experiment with broadcasting more live events, and with Warner Bros. Discovery for the option to do so in the future.
Lachlan Murdoch, Fox Corp’s CEO, noted at his company’s annual meeting in November that trends have made Fox “more valuable to the cable package, because what people watch on cable is live news and live sports,” he said. “Our assets are more valuable in this package, and over time we will get a greater share of the cable fees that we can charge our distributors.”
“Visual time to watch has fallen off a cliff, declining at an average of -8% per year over the past 10 years,” Nathanson wrote in his line-up TV. “Live watched time, however, is steady even though there are several million pay-TV homes out there. Sports, and to a lesser extent news, is where Pay TV continues to differentiate itself and will continue to find its lifeblood.”
But many companies are betting that there is more to it than just sports and news. In fact, they believe that the strategic moves made by many of the largest companies in the sector can work for the benefit of smaller and smarter players.
Hot topic: Giants exploring the subscription video-on-demand space are making their linear channels less valuable, by taking some of their best entertainment fare and making them exclusive to their streaming services.
On April 8, Disney announced that Dancing with the Stars, an ABC staple (and a favorite for marketers looking for a family-friendly offering on a scale) will move exclusively to Disney+ later this year, just when the streaming device-supported ad tier should appear. Paramount, likewise, is doing its job Yellowstone Spinoffs exclusive to Paramount+, while NBCUniversal’s The New Prince of Bel-Air The reboot is an exclusive of Peacock. For these companies, only increasingly better content is being streamed.
Says Kevin Karim, CEO of advertisement EDO Technology and Analytics Corporation. “And people who aren’t that big have to live with what they have, which is still powerful linear networks that have an audience.”
Paradoxically, this can help reinforce linear moves made by competitors. “Finding out pulling some content to go directly to their streaming platform creates opportunity,” Olsen says, noting that A+E is transitioning to food TV in an aggressive manner. “So you look for those opportunities, you find those spaces and you say, you know what, we can work our way around this.”
In some ways, overall payouts are performed by NBCUniversal and Warner Bros. Discovery, Paramount, and Disney create new windows for companies that don’t have the same scope, particularly in terms of maximizing their revenue through their linear audience.
This does not mean that these companies ignore broadcasting. They are all in this sandbox, to varying degrees. AMC has an SVOD service called AMC+, and a set of free ad-supported broadcast channels (called FAST channels in industry jargon – some apps, some channels within streaming services, but all are free and ad-supported). A+E owns its own stake in FAST channels and makes deals to sell their content to other broadcasters. Fox owns Tubi FAST and has a dedicated subscription offering with Fox Nation.
The bet is that as long as the programming is of high quality, audiences will watch it, whether on FAST or, yes, on Line TV. “We’re an original content company, we’re not known for showing reruns of other people’s stuff, so when you make your own, and own your own, it gives you maximum flexibility to use it linearly and then use it on any platform,” says Rob Sharenow, Head of A+E Programming. Networks, “Any way your customers want to use it.”
New technology such as addressable advertising, which provides targeting capabilities for digital advertising on television, can make linear television more like broadcasting, making it a better option for marketers looking for scope and quality. “I feel like TV is getting more exciting, more dynamic, and more effective,” says Kim Kelleher, head of advertising sales at AMC Networks.
Even better, linear audiences can still benefit from the live TV’s water-cooling effect, which persists even under lower beams, but is becoming harder to come by.
“There’s still a societal aspect to watching something live on the same day,” Kelleher says. “You’re watching Twitter explode, and it’s not just scripted plays, we’re seeing it through us love after lock a series. It’s fun, you feel like you’re part of something, like you’re in a bar full of people enjoying the same moment, the same joy, the same anger.”
But sin is in some ways the glue that holds them together, and these “contradictory” companies believe, to use Olsen’s formulation, that they can remain not just a viable, but definitively compelling business, for the foreseeable future. “It’s a pick-me-up adventure from a viewer’s point of view, and many of our viewers are still cable subscribers,” Kelleher adds.
A version of this story first appeared in the April 27 issue of The Hollywood Reporter. Click here to subscribe.