Broadcast to FAST (Part IV)
How Local TV Benefited from Cord-Cutting with New Tech and Old Shows
Previously on…
So far, we have discussed the early era of television, the period characterized by DVD and DVR binge-watching, and the recent rise of various streaming services. In this segment, we will examine how local broadcasters became concerned about declining advertising revenue and began to capitalize on cord-cutting trends and the technical advancements provided by ATSC 1.0.
The Era of Escalating Bills
For decades, cable and satellite TV dominated American homes with countless channels for entertainment, news, and sports. However, the monthly bill steadily increased, often surpassing inflation and wage growth, turning TV packages from an affordable luxury into a real strain on family budgets.
This gradual increase in costs was not attributable to a single factor but rather a combination of elements including complex negotiations, substantial content costs, infrastructure enhancements, and changing market dynamics. Content creators, local broadcasters, and service providers all contributed to the ecosystem that led to consumers facing higher monthly charges. Understanding these factors is essential to comprehending why viewers eventually began opting for alternatives such as streaming and over-the-air reception.
Clashing Titans: National Content Providers vs. Cable Operators
The increase in cable costs was influenced by the negotiation process between cable/satellite providers like Comcast, Charter, DirecTV, Dish, and large media conglomerates owning popular national cable channels such as Viacom (now Paramount Global), Disney, Time Warner (now Warner Bros. Discovery), NBCUniversal, and Fox Corporation. These conglomerates required "carriage fees" – a per-subscriber fee that providers paid to include their channels in television packages. With the consolidation of these media giants and the expansion of their portfolios of essential channels like ESPN, Nickelodeon, CNN, and Fox News, their bargaining power grew considerably.
These negotiations often evolved into highly contentious public disputes. Media companies frequently insisted that providers accept large bundles of channels, thereby including less popular networks in the basic cable lineup alongside major channels, which increased the overall cost. When providers resisted fee increases they considered excessive, conglomerates would leverage the popularity of their channels, threatening blackouts and running campaigns to prompt viewers to pressure their provider. Notable examples include the 2012 dispute where Viacom channels (such as Nickelodeon, MTV, Comedy Central) were unavailable to over 20 million DirecTV customers, or the 2010 blackout of Disney-owned channels, including ABC in major markets like New York and Philadelphia, for Cablevision subscribers during a fee dispute that included a significant increase partly attributed to ESPN's rising costs.
These disputes underscored how much leverage big media had over the system. They frequently required that providers compensate for all their subscribers within a service area, irrespective of whether each subscriber viewed those specific channels. In the absence of an agreement, channels would be removed, resulting in significant customer dissatisfaction. This discontent was often strategically directed towards the cable or satellite provider, thereby exerting pressure on them to acquiesce to higher fees, which were subsequently reflected in the billing of subscribers.
Premium channels such as HBO, historically owned by Time Warner and now part of Warner Bros. Discovery, have operated under a slightly different model compared to other networks. Although not entirely immune to disputes, HBO was traditionally sold a la carte or as part of distinct premium tiers, rather than being aggressively bundled within basic package carriage negotiations like channels such as ESPN or TNT. Subscribers made an active choice to add HBO, making its revenue less dependent on inclusion in basic bundles. Consequently, HBO was less frequently the central figure in large-scale basic cable blackout battles caused by increases in bundled channel fees. However, disputes over specific tier pricing could still arise.
Sports Programming
Sports programming, particularly on a regional level, has been one of the largest drivers of rising cable bills. Regional Sports Networks (RSNs), which hold exclusive local broadcast rights for major league baseball, basketball, and hockey, charge some of the highest per-subscriber fees in the industry. These costs ballooned as teams and leagues capitalized on fan loyalty to demand ever-pricier deals. Providers, in turn, passed those costs to nearly all subscribers in the market (even those who didn’t watch sports) because RSNs required payment for every household within a designated area.
This model effectively turned non-fans into unwilling contributors to team revenue. In many markets, subscribers saw monthly increases of $5, $10, or more to help cover player salaries and franchise operations, even if they never tuned in. RSNs bundled these high rights fees with their own operational costs and profit margins, inflating the total charged to providers. And since dropping RSNs risked alienating loyal sports viewers, providers were often stuck between accepting steep increases or sparking public backlash during contract disputes. The result was a system that became unsustainable for providers and the subscribers footing the bill.
Retransmission Consent and Consolidation
A significant factor contributing to cable bills is the inclusion of local broadcast stations, which are network affiliates (ABC, CBS, NBC, Fox, CW) available for free over the air. According to regulations known as "retransmission consent," cable and satellite providers must negotiate with these local station owners for permission to carry their signals. Initially, stations frequently granted this permission in exchange for carriage of a secondary channel or other non-monetary considerations. However, over time, station owners have begun demanding substantial cash payments, referred to as retransmission fees, from providers.
This transition was significantly influenced by the consolidation of local television station ownership. Corporations such as Sinclair Broadcast Group, Nexstar Media Group, and Tegna acquired numerous stations nationwide. This consolidation substantially enhanced their bargaining power. Rather than negotiating on a station-by-station basis, providers now negotiated with a single entity controlling the ABC, CBS, and Fox affiliates across multiple markets.
If negotiations stalled, large ownership groups could decide to pull all their stations from a provider's lineup in multiple markets, leading to significant disruption for subscribers. This leverage enabled station groups to request higher retransmission fees, which providers generally paid to avoid subscriber dissatisfaction due to the loss of local channels. These costs were then passed on to customers through surcharges often labeled on bills, such as "Broadcast TV Fee." These fees became one of the fastest-growing parts of the average cable bill.
Infrastructure, Market Power, and the Ever-Growing Bundle
In addition to content costs, cable providers incurred expenses that affected pricing. They invested in upgrading their infrastructure, moving from analog to digital systems, deploying high-speed internet capabilities over coaxial lines, and developing technologies such as DVRs and Video on Demand (VOD). These capital expenditures for network improvements and new service features were included in customer pricing to recover the investment and support future upgrades.
Marketing and operational costs also affected prices. In many areas, cable companies operated with limited direct competition. Consumers often had only one high-speed cable provider and possibly a satellite alternative, which faced similar cost pressures. This lack of strong competition reduced the need for providers to lower prices to attract or retain customers. They had a level of market power that allowed for more significant price increases than might occur in a more competitive environment.
The practice of bundling services (television, internet, and phone) though pitched as a money-saver, also led to increased overall household expenditures on communications. While bundles might offer a lower price per service compared to purchasing each a la carte from the same provider, they obligated customers to a larger package of services, thus ensuring a significant minimum monthly payment to the provider. Additionally, these bundles sometimes concealed the true cost drivers within the television component of the package.
Setting the Stage for Digital Broadcast
As frustration grew with the increasing costs of cable and satellite services during the early and mid-2000s, consumers found themselves with limited alternatives. Those who chose not to or could not afford the high monthly fees primarily relied on traditional over-the-air (OTA) broadcast television received via an antenna. However, this analog OTA experience was often seen as inferior, typically providing only a few major network affiliates along with some independent or public stations, frequently affected by poor image quality, ghosting, and signal interference influenced by location and weather conditions. Lacking the channel variety, clarity, and features such as on-demand content or recording capabilities that pay-TV offered, analog OTA was perceived as a substantial downgrade, compelling many to remain with increasingly expensive cable services. (Virtual Multichannel Video Programming Distributors – vMVPSDs - such as SlingTV weren’t available until 2015.)
During this period, High Definition Television (HDTV) was in its early stages. While HD technology began to offer clearer pictures in the early 2000s, it was not yet widely adopted. Compatible television sets were large and expensive, and there was limited broadcast content produced and transmitted in HD. Pay-TV subscribers often needed additional equipment upgrades to access HD content, such as HD-capable cable boxes or satellite receivers. Over-the-air viewers required either a new TV or a compatible digital tuner to receive available digital HD signals, making high-quality viewing less accessible without some investment and initial setup, as many had discarded or never installed terrestrial antennas.
The transition to digital television, standardized as ATSC 1.0, commenced well before the final cutoff date for analog broadcasts. During this simulcast period, many local stations transmitted both their traditional analog signal and a new digital signal. At first, digital over-the-air broadcasts utilized additional bandwidth in relatively basic ways. Stations might transmit their main program stream in high definition (HD) or upconverted standard definition (SD), while using the remaining capacity for a single SD subchannel. This subchannel often displayed a continuous weather radar loop, basic text-based community information, or occasionally a lower-resolution simulcast of the main channel. While the potential for robust multichannel broadcasting existed, initial implementations were generally simple and did not yet offer the diverse range of programming seen in later years.
The landscape of broadcast television experienced significant changes following the mandatory nationwide shutdown of full-power analog television signals in June 2009. This transition released substantial amounts of valuable broadcast spectrum that had been occupied by inefficient analog transmissions. With advancements in video compression technology (primarily MPEG-2) and broadcasters' increased expertise in managing digital bandwidth allocation, the newly available capacity revealed the full potential of ATSC 1.0. Consequently, stations were equipped with both technical capability and spectrum resources to introduce multiple, distinct digital subchannels simultaneously. This development facilitated the emergence of a diverse array of niche programming streams, which have since become a defining feature of the modern over-the-air (OTA) broadcasting landscape.
Post June 2009 Subchannel Growth
The digital television transition, which culminated in the cessation of analog broadcasting in 2009, did more than merely enhance the quality of the picture for over-the-air viewers; it fundamentally transformed the broadcasting business model by unlocking substantial bandwidth. By utilizing ATSC 1.0 compression technology, local stations discovered they could partition their allocated spectrum to broadcast multiple program streams concurrently, including their primary channel as well as several "digital subchannels." This capability, known as multicasting, rapidly evolved beyond basic weather loops as innovative broadcasters and media companies identified an opportunity to develop entirely new nationally programmed networks. These networks were distributed via affiliation agreements to local stations across the country, thereby filling these subchannels with dedicated content streams.
For local station ownership groups, already contending with audience fragmentation and shifting advertising revenues, these subchannels provided valuable new revenue streams with relatively low overhead costs. The primary model focused on advertising sales. While individual subchannel audiences were smaller than those of the main station, the cumulative viewership across multiple subchannels, frequently operating 24/7, created a substantial new inventory of advertising slots. Since the programming costs for these networks were generally very low (often involving older, syndicated content with lower licensing fees) the ad generated revenue could be highly profitable, thereby helping to offset potential declines in the primary channel's performance.
This multicasting strategy helped broadcasters attract OTA viewers, including cord-cutters seeking free content. By offering diverse niche programming, local stations could compete for audience attention in a crowded media landscape. Although subchannels did not initially receive carriage fees from cable systems, the enhanced OTA offering improved the station's value and negotiating power in the media ecosystem.
The concept was not entirely new, but the post-2009 bandwidth expansion permitted it to grow on a national level. Early pioneers explored the possibilities even before the final analog switch-off. Networks such as the Retro Television Network (RTN), launched around 2005, began licensing libraries of classic shows to stations experimenting with digital multicasting. This TV, initially a joint venture involving MGM and Weigel Broadcasting launched in 2008, concentrated on movies and represented another early step towards a nationally branded subchannel. These initial efforts demonstrated the practicality of using the digital spectrum for curated, niche content beyond basic informational loops.
These emerging subchannel networks frequently thrived by employing a strategy that had been successful in the cable television industry: acquiring affordable, often library-based programming with established recognition and a dedicated audience. Just as Nick at Nite achieved significant success by building its brand around classic sitcom reruns in the cable sector, broadcast subchannels such as MeTV leveraged similar nostalgia. Likewise, the format of the original Court TV, which previously aired on cable, found renewed prominence and success as a broadcast subchannel owned by E.W. Scripps. This illustrated those familiar concepts and low-cost, library content can be effectively repurposed for the over-the-air (OTA) multicast environment.
Examples of Subchannel Broadcast Networks
MeTV (Memorable Entertainment Television): Established nationally in 2010 by Chicago-based Weigel Broadcasting, MeTV has quickly become a significant presence and is widely recognized as one of the leading classic television subchannel networks. Its programming primarily features well-regarded sitcoms and dramas from the 1950s through the 1980s, including notable series such as M*A*S*H, The Andy Griffith Show, Perry Mason, and Columbo. The network's meticulously curated schedule and strong nostalgic branding have contributed to its consistent top performance among subchannels, making it a prominent over-the-air offering in the majority of US markets.
Antenna TV: Established by Tribune Broadcasting in 2011, later acquired by Nexstar Media Group, Antenna TV serves as a direct competitor to MeTV, with its primary focus on classic television series. Its extensive library includes sitcoms and dramas from the 1950s to the early 1990s, featuring notable shows such as Bewitched, Johnny Carson, Three's Company, and Barney Miller. Additionally, Antenna TV incorporates classic films into its programming schedule, offering viewers a substantial source of familiar, vintage entertainment through free-to-air broadcasts.
Grit: Launched in 2014 by Katz Broadcasting (now part of the E.W. Scripps Company), Grit features a programming lineup that includes classic Western television series (Death Valley Days, Laramie) and movies (often starring actors like John Wayne or Clint Eastwood), as well as war films and general action-adventure movies and series. Grit has established a niche by focusing on genres with a dedicated OTA audience.
Laff: Established by Katz Broadcasting (currently Scripps) in 2015, Laff is a television network dedicated exclusively to comedy. Unlike MeTV or Antenna TV, which primarily feature older classic shows, Laff's programming library includes more contemporary sitcom reruns, generally from the 1990s onward, such as Home Improvement, That '70s Show, and the original Night Court. Additionally, it offers a selection of comedy feature films. The network aims to attract a slightly younger demographic interested in familiar comedic content that is available without charge.
Bounce TV: Established in 2011 and currently owned by Scripps through Katz Broadcasting, Bounce TV is dedicated to catering to African American audiences. Its diverse programming portfolio includes original scripted series, documentaries, off-network syndicated sitcoms and dramas such as Living Single and In The Heat of the Night, movies that feature Black casts and narratives, as well as occasional sports events, particularly those from Historically Black Colleges and Universities (HBCUs). Bounce TV exemplifies a significant initiative to deliver culturally specific content within the broadcast subchannel ecosystem.
H&I (Heroes & Icons): Owned and operated by Weigel Broadcasting, H&I was launched nationally in 2014, specializing in a lineup built around action, adventure, and iconic heroes. Although there is some overlap with Grit's focus on action, H&I primarily features classic science fiction, police procedurals, and crime dramas. The network often schedules multi-episode blocks, allowing viewers to watch a series daily. Its programming lineup frequently includes renowned franchises such as various Star Trek series (The Original Series, Next Generation, Deep Space Nine, Voyager, Enterprise), along with popular action and procedural reruns like Walker, Texas Ranger, MacGyver, JAG, Monk, and Nash Bridges, catering to enthusiasts of sci-fi and action-oriented narratives.
Comet: Operated by Sinclair Broadcast Group, Comet serves as a dedicated channel for enthusiasts of science fiction, fantasy, and horror. Since its inception in 2015, the network has featured a blend of classic and contemporary science fiction television series, cult classic films, and genre-specific movies. Esteemed programs such as The Outer Limits, The X-Files, Stargate SG-1, Buffy the Vampire Slayer, and Farscape are regularly broadcast, alongside a diverse selection of sci-fi and horror movies from various periods. Comet caters to a niche genre audience, providing programming that is often distinct from the classic sitcoms or westerns available on other subchannels.
MeTV Toons: Building on the success of its principal MeTV network and identifying an opportunity in the OTA market, Weigel Broadcasting introduced MeTV Toons in June 2024. As indicated by its name, this network is dedicated exclusively to classic animation. It features extensive libraries of esteemed cartoons primarily from the golden age of theatrical shorts and early television animation, including Warner Bros. characters such as Bugs Bunny and Daffy Duck, along with Popeye, Tom and Jerry, and various Hanna-Barbera productions. MeTV Toons aims to evoke nostalgia among viewers who grew up with these cartoons and to familiarize new generations with them through free broadcast television.
Catchy Comedy: In March 2023, Weigel Broadcasting rebranded "Decades" to Catchy Comedy, shifting focus to sitcoms from the 1960s to 2000s. Unlike Decades' broader content, Catchy Comedy airs themed blocks and multi-episode "Catchy Binges" of shows like Cheers, The Monkees, and Newhart, complementing MeTV.
Sports Returns to Broadcast
The traditional model of local professional sports broadcasting, dominated by Regional Sports Networks (RSNs) included in cable and satellite packages, recently underwent significant changes. This was notably highlighted by the financial restructuring of Diamond Sports Group, the parent company of the Bally Sports RSNs. Due to substantial debt from Sinclair Broadcast Group's acquisition of the networks from Disney, Diamond filed for Chapter 11 bankruptcy protection in March 2023. This created uncertainty, delayed rights payments to teams, and led to industry-wide reassessment. Other RSN operators also adjusted their strategies; Warner Bros. Discovery announced the end of its AT&T SportsNet RSNs in several markets, and Comcast's NBC Sports Regional Networks division ceased operations in some areas (such as the Northwest and Chicago) and sold its Washington D.C. network. These actions reflect the broader challenges facing the traditional RSN model. Diamond Sports Group emerged from bankruptcy in early 2025, rebranded as Main Street Sports Group, but the landscape has been significantly changed.
The recent issues faced by Regional Sports Networks (RSNs) have had significant impacts on teams and fans. Teams encountered potential reductions in guaranteed revenue streams, while fans faced the possibility of losing access to televised games. Major League Baseball intervened to produce and distribute games for certain teams, such as the San Diego Padres, when Diamond defaulted on payments. This situation also presented an opportunity to reevaluate the RSN model, which depended on high per-subscriber fees from cable and satellite customers. The model has weakened over the years due to cord-cutting, which has reduced the number of subscribers. As a result, teams began reconsidering the trade-off between limited reach behind a paywall and broader accessibility that could expand their fanbase.
The instability of RSNs has led to a significant shift in broadcasting, with local sports returning to free, over-the-air television, often complemented by direct-to-consumer streaming services. Major local station ownership groups have seized this opportunity, forging agreements directly with teams affected by the RSN disruption or those whose contracts have expired. A prominent example occurred in Arizona in 2023, where the Phoenix Suns and Phoenix Mercury (WNBA) transitioned from Bally Sports Arizona to Gray Television, enabling free broadcasts on KTVK (3TV) markedly expanding their potential audience statewide. Similarly, the Utah Jazz, formerly with the now-defunct AT&T SportsNet, partnered with Sinclair Broadcast Group's KJZZ-TV for OTA broadcasts, supplemented by their own paid streaming service. The NHL's Vegas Golden Knights took a comparable approach, entering into an agreement with Scripps Sports to broadcast games on KMCC-TV following the conclusion of their RSN deal. These arrangements prioritize broad fan access via antenna while frequently establishing new team-controlled revenue streams through digital platforms.
The Next[Gen] Evolution?
Undeniably, the strategic utilization of ATSC 1.0's capabilities marked a period of significant innovation and adaptation for local broadcasters. By embracing digital multicasting, stations successfully cultivated new revenue streams through advertising on a growing array of subchannel networks and, more recently, by acquiring local sports rights directly. This expansion of free over-the-air content also provided tangible value to viewers, particularly cord-cutters fed up with bloated cable prices. For over a decade, this approach proved remarkably effective, helping local television remain relevant and financially viable amidst profound shifts in media consumption habits.
The transition to the next-generation ATSC 3.0 (NextGen TV) standard presents a complex set of challenges for the industry. The future rollout and adoption of ATSC 3.0 are currently fraught with significant uncertainty. A major point of contention is the implementation of mandatory Digital Rights Management (DRM), which may limit recording capabilities and device compatibility, diverging from the relatively open ATSC 1.0 ecosystem and potentially alienating consumers and third-party hardware developers. Additionally, there is ongoing debate on how to best monetize the advanced capabilities of ATSC 3.0. Proposals range from enhanced advertising and datacasting services to alternative uses of the spectrum, such as integrating 5G broadcasting. These unresolved technological, strategic, and regulatory issues create ambiguity regarding the future success of broadcast television, casting doubt on whether the achievements of the ATSC 1.0 multicasting era can be replicated in the coming years.
It’s important to note that the National Association of Broadcasters is attempting to foster the adoption of NextGen TV by accelerating the ATSC 1.0 shutdown. I recommend a view of Antenna Man’s video on the subject:
Stay Tuned for Exciting Conclusion…
Check back soon for Part V which will conclude this series. We’ll discuss the evolution of FAST (Free Ad-Supported Television) and see if the content offered on these networks is worthwhile.