ABC and OTT
The death of broadcast television
On March 2 Dish Network subscribers in 26 markets—including Baltimore, Boston, Kansas City and Albuquerque—lost access to Hearst Television stations after the two companies reached an impasse in their negotiations for a new contract. For longtime cable and satellite subscribers, this was nothing new. Distributors and content providers frequently clash, resulting in a station “blackout.” Eventually, consumers complain, the industry titans come to an agreement, and viewers at home end up with a slightly higher bill for the same old content. But Dish’s feud with Hearst has gone on for nearly two months with no signs of a change. What’s the deal?
Hearst Communications owns 15 ABC affiliates, 12 NBC affiliates and a handful of CBS and CW outlets around the country. In Albuquerque, Hearst controls KOAT-7, the local ABC affiliate. For most people it may seem like a strange argument—fighting over how much Dish (and by extension, their customers) should pay each month for a free, over-the-air network. But today’s television is about so much more than just television. Nowadays, media companies fight over things like “digital carriage” and “live TV streaming.” Fewer people are watching broadcast TV live as it airs—because they really don’t have to thanks to digital recorders like TiVo and Hopper or because of internet broadcast services like hulu.com. Dish, for example, owns the Sling TV live streaming service—and it’s this kind of consumer-controlled delivery system (see also: Roku, Apple TV, etc.) that Hearst and Dish are most likely going to war over.
On April 24—perhaps none too coincidentally—ABC television and its parent company Disney announced more than 160 ABC stations across the US had signed on to launch “over-the-top” services though the company’s new Clearinghouse initiative. OTT is a trendy term used in broadcasting and technology business to refer to audio, video and other media transmitted via the internet without an operator of multiple cable or direct-broadcast satellite television systems controlling or distributing the content. In other words: It’s a way of cutting out the middle man and allowing viewers to access content directly via their computer. Sounds like a smart idea. Why not ditch the cable/satellite companies and deal directly with the networks?
Well, let’s just say Disney/ABC/Hearst may not be acting in your best interests. Here’s what this feud boils down to: Dish owns Sling TV, and ABC wants to launch its own, proprietary TV/internet device/service. ABC (and all the other networks, I assure you) are tired of simply making profits off commercial advertising and want to start charging for their heretofore “free” content. Disney/ABC is essentially dumping cable/satellite and joining up with “video partners” like Direct TV Now, Sony Playstation Vue, Google (YouTube TV) and CenturyLink—all of which charge for their services/devices. ABC’s Clearinghouse initiative—the bugaboo at the center of all this—provides ABC affiliates with what Disney Media Networks Co-Chair and Disney/ABC Television Group President Ben Sherwood called, in a recent statement, “the opportunity to opt into pre-negotiated agreements for digital distribution of their live, linear feeds, as well as potential opportunities for local VOD distribution.” Dig through the list of station-owning entities who have signed on to Disney/ABC’s plan and you’ll find—alongside Sinclair Broadcast Group, The E.W. Scripps Company, TEGNA Media and others—our old friends at Hearst Television.
On the one hand, OTT means modern viewers could have the opportunity to watch ABC on their cell phones, their iPads or whatever, whenever they want. On the other hand, it means—as we saw last month—Hearst is now empowered to pull ABC from Dish Network in hopes of charging for its shows. For you, maybe it’s worth the convenience. Don’t be surprised, however, in the next few years when every single station on the dial pulls out of cable and satellite and wants to charge $9.99 a month for access.