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As viewers watch more streaming video content and cancel their cable/satellite subscriptions, broadcast stations have been doubling down on free ad supported over-the-air (OTA) television, a business model whose origins started with the first TV commercial (Bulova watches) which aired on July 1, 1941.
In recent years, broadcast station groups have been launching free over-the-air digital multicast networks, a capability begun in 2009 when digital, high-definition television replaced analog TV. (These multicast networks have also been called diginets.) Since digital signals can be compressed, local TV stations can provide additional channels to viewers. A number of station groups have been launching these multicast networks including; Scripps
These multicast networks can be distributed from their station owners, other station groups, cable/satellite providers and over-the-top (OTT). Penetration varies, but many multicast networks are available in well over half the country with some reaching upwards of 90% of all U.S. TV homes.
Similar to network and cable television, multicast networks have both national and local TV ads. This also enables station groups access to network TV ad budgets. The larger multicast networks, measured nationally by Nielsen, have a number of general market advertisers. The smaller multicast networks are more reliant on direct response ads for revenue. Local ad dollars for multicast networks can come from sponsorships, direct response and local advertisers. Estimated ad revenue for network and local advertising however, is less than $1 billion but has been increasing.
A very large majority of programming on multicast networks are acquired with many focusing on a particular genre or a specific target audience. Ironically, despite being digitally transmitted, most of the programming was filmed in standard definition with many in black & white. Moreover, the audience profile for most multicast networks is older with a median age above 60. There are now a number of multicast networks available to audiences.
Among the more active station groups has been Scripps. In August 2019 Scripps acquired Katz Network and their group of multicast networks for $302 million. At the time, Katz Network owned four nationally multicast networks; Bounce, Laff, Grit and Escape.
Bounce was launched in 2011 and targets African-American audiences. Bounce is one of the few multicast networks to produce original shows, although most of the content is acquired. Scripps has plans to stream Bounce later this year. Grit was launched in 2014 and targets men with acquired westerns and action movies. Laff, launched in 2015, focuses on comedy with acquired sitcoms and movies. Court TV Mystery (formerly Escape) was launched in 2014 and airs crime drama and mysteries.
In January 2021, Scripps completed the acquisition of ION Media, a broadcast network, at a reported cost of $2.65 billion. ION stations will be used to distribute the Katz acquired networks. Scripps also announced plans to combine ION stations with Newsy, their OTT national news network, to create a national OTA network set to launch on October 1. Another member of Scripps multicast OTA portfolio is Court TV, relaunched in May 2019. Additionally, in the aftermath of the ION media deal, Scripps, on July 1, will launch two new multicast networks; Defy TV and Doozy. Both will program reality TV shows with Defy TV targeting men and Doozy targeting women.
Sinclair has launched three multicast channels in recent years; Comet TV, Charge and TBD-TV which they have branded as The Stack to the advertisers. Comet TV began in 2015 and televises sci-fi programs and movies. Charge!, launched in 2017, focuses on action and adventure content. TBD-TV also began in 2017 with internet related content that targets younger audiences.
In 2018 Tegna paid $77 million from Cooper Media, to acquire a reported 85% for two multicast networks, The Justice Network, launched in 2015, which has been renamed True Crime Network and Quest. True Crime consists of nonfiction content such as true crime and forensic science documentaries. Quest, launched in 2018, has action-based adventure reality programming among other content. This past April, Tegna launched its third channel Twist, a lifestyle and reality-based network targeting women.
Weigel Broadcasting owns Me TV, one of the most popular multicast networks. Me TV (stands for Memorable Entertainment Television) provides classic TV programming from the 1950s through the 1990s. Last May, Weigel announced the launch of a spin-off network MeTV+, offering similar classic TV programming. Another multicast network from Weigel is Heroes & Icons launched in 2014. H&I airs classic TV programming with a focus on superheroes, action/adventure, sci-fi and westerns. In 2018 (at the suggestion of CBS), Weigel launched Start TV, which targets women with dramas centered around females.
In 2015, Weigel in partnership with CBS, launched Decades, with a retro programming lineup consisting of comedies mixed in with variety shows and dramas. A CBS owned multicast network is Dabl, a lifestyle network launched in 2019.
In 2011 Tribune (since acquired by Nexstar) launched multicast network Antenna TV, featuring classic TV comedies that date back to the 1950s. This September 1, Nexstar will launch a complementary multicast network Rewind TV with classic sitcoms from the 1980s and 1990s.
Another prominent multicast network is NBCU’s Cozi TV. The network was launched in 2009 as NBC NonStop and airs classic pop culture programming. In 2019, NBCU started NBC.LX, a digital news network targeting younger (cord cutting) audiences. The news network can also be streamed. NBCU and Telemundo launched TeleXitos, in 2014 which televises classic English language TV shows dubbed in Spanish.
A few other larger multicast networks include the Univision owned channel UniMas (formerly TeleFutura) targets young adult Hispanics. Fremantle operates Buzzr, which airs classic games shows. The Allen Media Group owns ThisTV, with classic TV programming and movies. Sony’s getTV also airs classic TV programs. There are a number of other recent multicast channels.
Dave Morgan, the CEO of Simulmedia notes, “The extraordinary growth of multicast TV networks over the past five years is one of the less told stories in the media industry. Today, more people watch more advertising for more time on multicast networks in the U.S. than they do on ad-supported streaming services, and all of that viewing is new. Multicast networks may not be as sexy as AVOD, but they are bigger.”
The average audience of top-tier multicast networks are now comparable to many ad supported cable networks.
Average Audience (in 000)
Me TV 786
Bounce TV 243
Cozi TV 196
Heroes & Icons 189
Court TV Mystery 155
M-Sun (8-11 p.m.), May 2021
Source: Nielsen (Live + Same Day)
Although cable systems can carry multicast networks, all that is required for viewers is a digital antenna. A recent study from Horowitz Research, found in February 2021, 40% of all U.S. TV viewers above the age of 18 have a digital antenna, an increase from 29% the previous (pre-pandemic) year. Horowitz Research estimates 48.4 million TV households now have a digital antenna. With the cost of some digital antennas at under $20, strong sales are expected to continue.
The roll-out of multicast networks is expected to continue with the roll out of ATSC 3.0 (a.k.a., Next Gen TV). ATSC 3.0 is estimated to reach 50% of all U.S. TV homes by 2022. ATSC 3.0 comes with many upgrades including more bandwidth which will allow for more multicast networks.
Rick Ducey, BIA Advisory Services’ managing director says, “ATSC 3.0 enables a new platform strategy for broadcasters to bring content, apps and other services to TV sets and a variety of other devices. For local TV operators, ATSC 3.0 is a new Internet-compatible broadband wireless pipeline for distributing content to consumers wherever they are and whatever they are using to consume TV that is unique to these local stations. This creates a generational opportunity for local TV to redefine its relationship with audiences around beloved and familiar content as well as new services they bring to market.”
With more bandwidth becoming available, a reliance on acquired programming resulting in low operational costs, growing ad revenue, a programming alternative for cord-cutters (which is not slowing down), as well as a free compliment to subscriber based streaming video services, viewers can expect the continued launches of multicast TV channels in the years ahead.
Eighty years after the first TV commercial and despite all the technological advances since then, free, ad supported, over-the-air television, has a promising future.