CBS-owned stations added to free, rapidly growing local news streaming service VUit

The following is an excerpt from CNBC
December 9, 2022

The streaming platform VUit is bulking up with newscasts from Paramount Global’s owned and operated local CBS TV stations as the fledgling service looks to take a bigger foothold in the sprawling U.S. local news market. 

The streaming newscasts from CBS’s 13 owned and operated stations, two of which are in the major markets New York and Los Angeles, and national CBS entertainment programs like “Inside Edition,” are being added to the free, ad-supported platform. 

“We’ve been in this kind of soft launch mode for a couple of years. Getting a critical mass of stations was goal one. This deal with CBS gets us a big chunk of the U.S.,” said Jack Perry, CEO of Syncbak, the streaming technology company behind VUit.

A representative for Paramount’s CBS Media Ventures unit didn’t immediately provide comment. 

VUit, pronounced “view it,” has been quietly adding local newscasts and original, hyperlocal programming like mountain bike races and high school sports, from more than 260 broadcast stations in the past two years. 

The service’s growth comes at an inflection point for the media industry. Streaming upended the traditional pay-TV bundle, with companies reporting steep subscriber losses as consumers keep switching to streaming. 

At the same time, the streaming business model is under pressure as rabid competition weighs on subscriber counts and content costs soar. Much of the industry has turned to offering ad-supported tiers, providing a cheaper option for consumers and bringing in another line of revenue. Disney+ and Netflix recently launched ad-supported options, following Paramount+, NBCUniversal’s Peacock and Warner Bros. Discovery’s HBO Max. 

Meanwhile, free, ad-supported streaming services like Paramount’s Pluto TV and Fox Corp.’s Tubi, both of which offer news options, too, have seen viewership rise along with advertising revenue.

Evolution at the local level

Pay-TV subscriber losses are a threat to the lucrative retransmission fees that cable companies like Comcast and Charter Communications pay broadcast station owners.

“The loss of pay-TV customers is accelerating and for companies like Gray and Nexstar,” said Nicholas Zangler, an analyst at Stephens, “they are adapting to the streaming world.” He added: “It’s a double-edged sword when making the transition to the [streaming] TV world.” 

The analyst noted that broadcast station owners haven’t publicly given details on how deals with pay-TV operators like Comcast compare with streaming services carrying broadcast stations, other than “the transactions are not equivalent, so it’s a slight loss.”

But as local news remains go-to content for consumers, with viewership often rising during major events, retransmission fees could still rise in coming years. Companies like Nexstar and Sinclair Broadcast Group, which own 200 and 185 stations, respectively, receive billions in revenue annually from these fees.

“If anything, they want a more fragmented environment. TV and streaming services are crawling all over each other for more content that retains viewers. Local news does that,” Zangler said. 

Broadcast stations are also available on internet-bundles like YouTube TV and FuboTV, as well as in some cases on subscription streaming services like Peacock and Paramount+. Some of their content finds homes on free, ad-supported services like Pluto TV or VUit. 

Some companies like Sinclair have created their own free streaming services, and many affiliates use their websites and build their own apps to offer newscasts. It’s created a disjointed marketplace for local news, although it has provided other revenue streams for broadcast station owners as consumers ditch the pay-TV bundle. 

VUit’s business model

Instead of paying the same fees, VUit shares advertising revenue with broadcast station owners that put their content on the platform. 

Due to this, the platform doesn’t carry the marquee programming on local TV affiliates like NFL games, primetime series and national news shows. Instead it carries local news segments, often the digital versions found on the broadcaster’s own websites and streaming option. 

VUit’s bread and butter is giving viewers the ability to watch local news stations out-of-marketbut with in-market localized advertising for the viewer, and original programming featuring typically hyperlocal events not found on linear networks. 

“It’s not only the local news, it’s all the local events taking place in a market on any given day, that now we have the marketplace and technology to get that out to the public,” said Mike Braun, chief digital officer at Gray Television, an early investor in Syncbak and VUit. 

There was a 31% year-over-year increase in ads served between June 2021 and June 2022, and revenue sharing among station owners grew by 121% for the first half of 2022, according to VUit. Year-to-date revenue sharing is up 192%, Perry said.

VUit aims to work with CBS’s local stations to boost their hyperlocal events on the platform and attract more eyeballs. 

“Let’s just get the viewer into our sandbox, and get them watching anything,” said Perry. 

A recent Iceman Challenge mountain bike race in Traverse City, Michigan, available only from local station WWTV on VUit’s platform, garnered thousands of viewers. 

In the weeks leading into the election, VUit saw spikes in viewership of political coverage in battleground states, like Pennsylvania and Florida. When Hurricane Ian was touching down in Florida in September, VUit saw viewers migrate toward local news stations in the state. Like the TV stations, VUit reaped the benefit of political advertising for this year’s midterm elections campaign.

Perry said VUit’s viewership has risen exponentially as it’s added more broadcast stations and original programming – Gray TV, Cox, Hearst and small, privately owned broadcast stations are among the lineup – with the average viewer clocking in nearly 30 monthly sessions on the service and sticking around for almost 30 minutes at a time. 

While major media companies like Paramount and NBCUniversal contend with the worsening ad market affecting earnings, Perry said VUit’s advertising revenue, albeit small in comparison to these giants, has only risen. 

Its most-watched station, which Perry declined to disclose, generated $19.30 per viewer last month, while an average VUit viewer brings in $5.28 a month, or 41 cents an hour.

Earlier this week, NBCUniversal said it was approaching $10 per average user on Peacock, which has both subscription and advertising revenue models. Recently, Disney+ said it received $6.10 in average monthly revenue per user in the U.S., for its subscription-only service at the time.

To be sure, VUit still only garners thousands of viewers, as opposed to the millions that go to more mature, larger streaming services like Disney+, or even free ad-supported services like Pluto TV and Tubi.

Perry noted that the average revenue metric is significant for VUit because the platform is “very sticky,” meaning it holds onto its audience long-term. Streamers have been contending with customers, who have the ability to drop subscriptions more easily than when they had pay-TV packages.

The deal with CBS only helps its other local newscasts, Perry said, as audiences from larger markets will come to the platform and explore. Besides a marketing push in 2023, and trying to add more broadcast stations to the platform, Perry said he’ll be looking to make acquisitions on the technology side that improve VUit’s navigation and discovery. 

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