It’s unrealistic to think broadcasters can keep doing things the same way for the next decade against the litany of threats the industry faces.
It’s easy to look at the broadcast TV industry and feel like the good days are behind us. There’s no question that the business is facing serious headwinds. In just a minute, I can name a dozen challenges that, individually, should give us pause. Where do I start:
Audience fragmentation — Viewers now have more choices than ever. Streaming services, social media, and on-demand platforms have eroded traditional TV audiences. This fragmentation has made it harder for broadcasters to deliver the scale and reach they once did.
Declining audiences — Younger audiences are moving away from live TV. As live, linear viewership drops, so do advertising revenues.
Shrinking retransmission fees due to declining audiences — As consumers cancel cable subscriptions in favor of streaming or OTA viewing, broadcasters are seeing a decline in lucrative retransmission fees paid by MVPDs (cable/satellite providers). This revenue has been vital to local stations’ ability to operate and serve communities. It can be as much as 50%-70% of a station’s gross revenue.
Inconsistent measurement standards and ad delivery data — The digital ad ecosystem has evolved to prioritize measurable outcomes and performance. Broadcast has struggled to keep up due to legacy infrastructure, inconsistent measurement standards and slower adoption of technologies like addressable and programmatic advertising.
Lack of first-party data — Unlike digital and streaming platforms, traditional broadcasters don’t have access to robust, user-level data. This limits their ability to offer precision-targeted advertising and measure outcomes. These are table stakes for today’s modern advertisers.
Regulatory constraints — Broadcasters have been unable to compete with the digital and streaming TV platforms due to constraints from outdated FCC regulations. The industry has been talking about this for months with the new administration in Washington. Last month the U.S. Eighth District Court of Appeals vacated FCC’s Top 4 Prohibition, which prevented a broadcaster from owning two stations that are Top 4 network affiliates. It’s a start.
Network economics — Networks take a significant share of an affiliate’s retransmission fees via reverse retransmission. Often as much as 60%-70% of the gross retransmission revenue goes to the network, putting financial pressure on local operators.
Networks’ “streaming first” digital distribution — The favoring of streaming for prime programming further diminishes local viewing. It represents a form of content disintermediation, where the network reduces or eliminates the affiliate’s role in distribution to build their streaming or + brands.
Increased debt service costs — Most broadcasters are renewing their debt today at significantly higher interest rates than a few years ago. This increases borrowing costs and puts added pressure on operating margins. The rise in debt service expenses can limit the ability to invest in news, technology or talent.
Market uncertainty — On again, off again tariffs from the new administration combined with softness in the labor market and inflation have many advertisers reducing or pausing their advertising investment.
Increased competition for ad dollars — Retail media networks, CTV platforms and social media are capturing a growing share of ad spend often with better targeting, real-time reporting and data enabling them to optimize ad spend.
AI — Threats such as AI’s inherent bias favoring digital TV channels vs. broadcast as Jon Accarrino covered last week in his TVNewsCheck column are more real than most recognize. In a conversation I had last month with a senior executive at a holding company, they said their buying team would look quite different in the next several months: It would be smaller with AI performing much of the planning process.
Despite all of this, let’s not forget the resilience of broadcast TV. Ninety-seven of the top 100 telecasts in 2024 were on broadcast networks. The only exceptions were three football games on streaming platforms, two on Netflix and one on Amazon, that arguably should have aired on broadcast.
Broadcast still offers unmatched reach, brand safety, competitive ad separation and trusted content. Local news continues to inform communities and plays a vital role during emergencies, hurricanes, wildfires and tornadoes. We are part of an industry that still delivers immense value to viewers, advertisers and the communities we serve.
The question is not whether broadcast TV still matters. It clearly does. But are we willing to face today’s challenges head-on and evolve fast enough to meet tomorrow’s expectations?
We live and work in this industry, so none of these challenges are news to us. But let’s be honest: Do we truly believe things are fine as they are? Is broadcast TV really A-OK today?
The point I want to make is simple: We’re part of an incredible industry, one that still delivers enormous value to viewers, advertisers, sports leagues, political campaigns and local communities. But the challenges we face are real and ignoring them won’t make them go away.
Whenever one of my columns is published, I hear from folks in or around the industry who tell me why my ideas won’t work. They’ll say, “This isn’t how we measure” or “That’s not how linear works” or “You can’t bring precision to linear” or “Monetization doesn’t work that way.” There’s always a reason why we can’t try something new.
To those people, I’d ask: Are you really happy with where broadcast TV stands today? Do you honestly believe we can keep doing things the same way for the next 10 or 20 years despite all the threats we face?
I don’t just believe we can’t; I know we can’t.
So, to those of you who are still reading: be honest with yourself. Think about your role, your company, your influence. What are you doing to help address these challenges? What can you do differently?
Here’s what I know for sure: If we do nothing, we’ll wake up tomorrow, next week and next year in the same place or worse, likely with greater pressure from these threats.
Now is the time to question the outdated structures and assumptions that are holding us back. Ask yourself: What are you doing today to transform your business and the future of this industry?