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8 months ago
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As a sports fan, “you want to pull your hair out” when trying to toggle between streaming and linear TV, in the view of Nexstar President and COO Mike Biard.
That “less-than-ideal” user experience helps explain why 60% of viewership for Thursday Night Football occurs on local broadcast stations rather than Prime Video, the exec said, citing internal research. Biard, who joined Nexstar last summer after a long career at Fox, made the comments during an appearance Tuesday at Deutche Bank’s Media, Internet & Telecom Conference.
Under the terms of the NFL’s media rights deals, any games carried on streaming or cable TV are also made available free and over-the-air via local TV stations in the home markets of the two teams playing each other. Prime Video is two years into an 11-year deal for Thursday Night Football, and recorded a 24% jump in total viewership in its sophomore season.
“It’s discussed popularly as though Amazon has those games exclusively,” Biard said. However, he continued, “when you look at the ratings in the local markets, people tend to vote significantly greater with their eyes to go to broadcast as opposed to Amazon Prime to watch that game. We looked at it most recently, and on average about 60% of viewers will choose broadcast over Amazon Prime” in the two teams’ markets, despite steady promotion of Prime across other NFL telecasts.
Nexstar owns the largest portfolio of local TV stations in the U.S. as well as a controlling stake in the CW broadcast network.
Elaborating on the tilt toward broadcast, Biard returned to the experience in the living room.
“A TV time out comes, a player injured on the field, whatever it is. You want to change the channel, see what’s going on on another game or check something out,” he said, convincingly sounding as though he spoke from personal experience. “To turn from Amazon Prime, it’s like six clicks out, then you’ve got to get back in and maybe change the input on your TV, you want to pull your hair out by the time you’re done. And God help you if you’re trying to do that at the same time there’s another game on and you want to go back and forth. The user experience is just … less than ideal.”
Across its overall portfolio, Nexstar has tried to take advantage of its scale in local TV as well as building out the sports offerings on the CW. In Southern California, the company reached a deal with the NBA’s LA Clippers, carving out a limited schedule of games to bring them to broadcast TV. A select number of teams have started experimenting with similar alternatives to the broken regional sports network model, which is an increasingly distressed relic of cable TV’s peak more than a decade ago. The Clippers’ RSN partner, Bally Sports, is operated by Diamond Sports Group, which declared bankruptcy last year after struggling to keep up with dramatic changes in viewership and technology.
“Everything touching the RSNs right now is completely fluid,” Biard said. “If you know what the future of that business looks like, I’d figure out a way to bet on that because it’s just completely murky.”
The Clippers agreement will see 15 games this season carried on Nexstar’s KTLA-TV and between 12 and 15 a year in future years. Despite the slate representing only a “distinct minority” of the team’s 82-game regular-season schedule, Biard said, “when those games air, we do a rating on KTLA that’s about 100% bigger than what they do on the RSN.”
While the exec said it makes “perfect sense” for teams to consider weaning themselves from the rich fees traditionally paid by RSNs, he acknowledged that the transition will be uneven for the foreseeable future due to simple economics. Billionaire Steve Ballmer, who owns the Clippers, “has the resources and foresight to see the wisdom” of the shift, Biard said, but “whether every other team approaches it the same way remains to be seen. Not everyone will have the financial wherewithal to make the decision to forego a big check for reach. That’s some of the tension that’s out there.”
Asked about the sports streaming bundle announced earlier this year by Disney, Fox and Warner Bros. Discovery, Biard pointed out that it faces a “gauntlet” of challenges before reaching the marketplace. Hurdles include legal and regulatory scrutiny, technology and subscriber acquisition and the day-to-day operations of a joint venture, which have often been fraught in the media business. If and when the offering does launch, Biard said, “we welcome it.” Nexstar stations will be able to opt into the bundle, which will consist of 14 linear feeds of 24/7 networks carrying sports, and will be able to get paid carriage fees.
With the JV partners forecasting low-single-digit millions of cord-nevers signing up, Biard said he doesn’t see it as a threat to Nextsar’s core business. Instead, he said, “it will be a great opportunity to introduce audiences to our stations, which they may not be familiar with right now.”
