As viewers continue to migrate from traditional TV to streaming video, local TV broadcasters have been launching their own streaming services. In early September, 200 local TV stations launched VUit (pronounced “View It”), a new streaming provider. Participating in the launch were stations owned by Grey Television GTN +0.3% (with 94 stations covering 24% of U.S. TV homes), along with Meredith, Cowles Media Company, Heritage Broadcasting Group and Morgan Murphy Media. The consortium is hoping to add more TV station groups.
VUit is ad-supported and free to viewers, it will not be geo-fenced, the streaming content will be available to national audiences and to national advertisers, via iOS, Android, Roku, Amazon AMZN +3.1% Fire, Chromecast, Apple TV and others. Among the objectives is to make their content more readily available to viewers and grow ad revenue. Another objective is to reach younger viewers who are far more likely to watch streaming content than local broadcast stations. A recent study from Hub Entertainment Research found, that 50% of all consumers go to an online service as the first source when they turn on the television.
With viewers seeking information on the pandemic, the ratings for local TV has increased substantially. A survey from Nielsen, found during the pandemic, 64% of consumers who watched the news, went to local TV first, higher than either national cable news or national broadcast news. Despite the ratings boost, with many local businesses temporarily closed, ad revenue for local TV dropped by 30% in second quarter 2020. With more ad budgets being allocated to digital, VUit, will also provide a new online opportunity for local advertisers while creating an additional revenue source for local stations.
According to BIA, local TV ad revenue is projected to be relatively flat in the immediate years ahead. In 2020, BIA estimates local TV ad dollars to be $20 billion, dropping to $19.1 billion in 2021 and $20.1 billion in 2022. In contrast, BIA forecasts ad revenue for local online video to grow from $2.4 billion in 2020 to $2.8 billion in 2021. In addition, local OTT is expected to increase from $1.1 billion this year to $1.3 billion in 2021.
Local stations have agreed to develop 12 live made for VUit originals each month, the content ranging from news and sports to concerts and cultural events. Collectively, the consortium anticipates to stream over 3 million hours of live content with about 2,500 originals each year. VUit will also aggregate and cross promote content among member stations.
Behind VUit’s technology is Syncbak, which began testing the service in February. In the past, Syncbak has taken broadcast signals and converted them to streaming content for Hulu, CBS VIAC +2.3% All Access (soon to be Paramount Plus) and fuboTV. In a statement, Jack Perry, the CEO of Syncbak says, “We’re aiming to be the Netflix NFLX -0.2% of live, local and free.”
By using Syncbak’s ad platform, stations will be able to target viewers beyond local TV markets. In addition, stations will be able to use Syncbak’s technology to sell live dynamic ad insertion via adSync to insert ads nationwide.
VUit joins an increasingly crowded field of large station groups developing their own over-the-top ad supported initiatives. The Sinclair Broadcast Group SBGI +1.5% which owns 191 local stations launched STIRR in 2019, Tegna launched Premion in 2018 and the Nexstar Media Group NXST +2%, which owns 196 stations, launched Nexstar Digital in 2015. In 2014 CBS launched CBSN, a streaming news provider for ten local TV markets (with more planned), all are available nationwide. In addition, earlier this year NBCU launched NBC Spot On, selling advanced advertising across 42 NBC and Telemundo stations and digital properties.
Rick Ducey, the Managing Director of BIA says, “Netflix, Amazon, Roku and other brands have normalized OTT and CTV viewing into the media habits of TV audiences. They now get the tech, have learned to enjoy the user experience and now are putting higher expectations on the TV experience local TV stations deliver. Near term, on-boarding viewers lost from cord-cutting and new media habits onto OTT is a vital strategy for local TV groups. Longer term, that OTT user experience can be further enhanced and differentiated from the competition as ATSC 3.0 continues its rollout.”
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