The Streaming Era and Cable Woes: Dan Goman Discusses the Increasing Blackouts in Broadcast Media

In 2019, The New York Times published an article proclaiming the streaming era had arrived.

By November of that year, three major media companies had announced the imminent arrival of their own foray into streaming, and since then the landscape has exploded like a can of worms, with numerous platforms vying for audience attention and reshaping the way we consume content.

The article cited the rise of broadcast television in the 1950s as one of the seismic shifts that occurs roughly once a generation in Hollywood, bringing media consumption into the living rooms of millions for the first time. However, just as the shift from silent films to talkies marked a transformative moment in the history of cinema, the rise of streaming services and digital platforms is now reshaping the entertainment landscape. 

Today, the lights of broadcast media are continuing to go dark—sometimes literally. Amidst rapidly increasing retransmission fees, broadcasters and distributors are increasingly finding it difficult to establish common ground, resulting in an uptick in blackouts across the country.

Most recently, roughly 5 million people were caught in the crossfire of a fight over retransmission fees between DirectTV and Tegna. On the first day of December this past year, the broadcasting company suspended transmission for satellite cable providers, with negotiations continuing unresolved for six weeks. Tegna owns 66 stations in 52 markets, including prominent local market areas like Dallas, Phoenix, and Denver.

In addition to cutting off local television stations across the country, the blackout also meant that  millions of Americans were unable to tune in to what has up until recently been one of the last bastions of traditional broadcast media: football. The holiday season typically signifies the start of a continuous flow of college football bowl matchups and NFL games that determine playoff outcomes, but for many they were unable to access much of the final leg of the NCAA's regular season and three of their bowl games.  

According to Dan Goman, founder and CEO of the media supply chain company Ateliere Creative Technologies, blackouts have always been a part of cable television, but their frequency and length of time have rightly caused traditional broadcast media subscribers to worry. Goman has spent close to decades working in the media sector, during which time he witnessed firsthand the technological transition from broadcast to streaming. Accurately predicting the proliferation of streaming technology, his company’s R&D team were able to build an award winning  media supply chain platform in collaboration with some of the large media & entertainment companies in the world, solidifying the company's position at the forefront of media technology.

Retransmission Fees are Rising

Dan Goman asserts that while they may continue to fight for existence, cable is no longer a viable business. FCC regulations necessitate cable systems to obtain consent from a TV station to broadcast its signal, and cable providers such as DirecTV are obligated to pay stations a retransmission fee for the right to carry their broadcast signals. Typically, these agreements are set for a few years. However, when it's time for renegotiation, broadcasters and distributors must come to a complete consensus on fees, guidelines, and other terms before the renewal can take place.

Indeed, retransmission fees have risen by 270 percent since 2017 according to DirecTV, and at the rate it has moved so far that number could tick up another 40 percent by 2027. Between 2015 and this year, the rate grew from $5.85 to $19.85. This is just one factor that has become more frequently contentious in negotiations, and the case of DirecTV and Tegna is certainly not an isolated incident. Although they managed to avoid consumer-facing warnings about looming deadlines, Comcast and Paramount Global narrowly averted a blackout of service around the New Year’s holiday, underscoring the delicate nature of discussions between content providers and cable companies.

Since 2020, there have been 83 television blackouts across the country, with some persisting for months and even years. Currently, DirecTV and DISH customers are experiencing six distinct blackouts from Tegna, Cox Media Group, Mission Broadcasting, Nexstar, and White Knight Broadcasting. 

The Shift Towards Streaming is Luring Remaining Viewers Away from Cable

Retransmission fees represent just one facet of the challenges confronted by broadcast media. For years, streaming has been sending out its siren song, and as cable television prices continue to climb, an increasing number of people are opting to "cut the cord." In July of 2022, streaming claimed the largest piece of TV-viewing pie after four consecutive months of hitting new viewership highs. While streaming viewership in a given month had exceeded broadcast viewing before, this occasion marked the first time it has also surpassed cable viewing.

Simultaneously, the number of paid TV subscribers has been on a steady decline. DirecTV reported a dip from 26 percent from 100 million to 74 million over the past decade, and it expects to lose another 12 million subscribers by 2027. As their share of the pie has been getting smaller, the motivation to raise prices intensifies, leading to more people opting out and creating a vicious cycle. Dan Goman highlights that station owners are often slow to grasp unfolding trends. He observes that in a time of financial need they have resorted to maximizing their leverage to extract additional payments from cable operators. This short-term strategy, however, fails to provide a sustainable, long-term solution.

Sports fans worried about potentially missing games because of blackouts may not have to do so for long. In February of this year, it was revealed that a new collaborative streaming service, jointly owned by Disney, Warner Bros. Discovery, and Fox Corp, is set to launch this fall. Sports content featured on ESPN, ABC, Fox, TNT, and TBS will be consolidated and accessible through a single streaming platform. For many, sports are the primary motivation to watch—and pay for—broadcast TV. Now, hundreds of games will be accessible as a standalone streaming offering.

Goman emphasizes the impending decline of cable is not just a consequence, but a fundamental shift driven by the convenience, flexibility, and diverse content offerings provided by streaming platforms. Trust, a key component in the viewer-provider relationship, is now being rebuilt in the streaming realm, where blackouts are less prevalent and pricing models tend to be more transparent. The future of entertainment lies in the hands of streaming services and its new era of more control and personalized choices.