The American TV market is changing before our very eyes, presenting viewers, creators, and advertisers an unprecedented degree of choice, convenience, and competition. We are witnessing a platinum age of television, where an alluring array of movies, sports, and specials is accessible on our phones, tablets, and computers, available anytime and anyplace, on demand. Though we now refer to it as “video,” at its essence it remains television, and we just cannot get enough of it.

But, for traditional TV broadcasters, these changes are both a blessing and a bane. A blessing because more people are watching more video than ever before.  A bane because more people are viewing that video through non-traditional media, which represents an evolving societal shift.

Sadly, broadcast television has been in a slow decline for over a decade – from the nation’s most watched medium to a third viewing option for most Americans. Cable, too, is suffering from a steady snip of cord-cutting, especially by younger and cost-conscious viewers.

Leading media analysts have cited broadcast TV as a declining industry for years due to fewer eyeballs and advertising dollars. Now, the cracks in the media ecosystem are becoming manifest. According to Nielsen, the gold standard in media measurement, data from April 2024 confirms these predictions: Streaming accounts for 38.4% of all TV usage, cable for 29.1%, and broadcast TV for 22.2%.

While the 2020 pandemic accelerated many of the fundamental fissures, it cannot be blamed for television’s decline altogether. Broader societal issues are at play.

First and foremost, Americans have developed a voracious appetite for content – everything from movies to special events and sports – wherever it can be found. Increasingly, that is on our phones, tablets, and computers, and not just on living-room TV sets.

Technology, too, has played a transformative role. First digital, and now streaming, media have indelibly changed how we consume content. As a result, the economics of the media business have necessarily adjusted. Television has historically been a capital-intensive industry, but reliable revenue and profits, along with cash flow, made it worthwhile. Today, revenue is far less predictable, and broadcasters must share a larger portion of those profits with a new cadre of content creators, distributors, and networks.

As recent data from Nielsen’s Gauge points out, the segue from broadcast and cable to streaming is in full swing. In May 2024, broadcasters, networks, and advertisers took part in the annual “Upfronts,” where TV schedules and programs are presented to advertisers to secure early commitments. The big five networks – ABC, CBS, NBC, FOX, and CW – remain the cornerstones of American television, each with its unique history and programming focus. They are hoping for a strong year despite the new challenges.

Hopes aside, these media now face formidable new competition. Platforms like YouTube, Netflix, Amazon, and Hulu pose a significant threat to traditional television broadcasters. Their streaming offerings over the Internet and a-la-carte pricing provide viewers with more flexibility at lower cost. As fragmented audiences migrate from traditional TV screens, advertising – the lifeblood of all media – follows suit. In the coming years, more advertising dollars will flow to streaming platforms, further challenging traditional media for viewers and revenue.

In 2023, over $1 trillion was spent globally on advertising. Perry Sook, CEO of Nexstar, which owns the largest number of local TV stations in the nation, aptly noted that “advertising is what makes the cash registers ring on Main Street.” If advertisers, guided by audience and media measurement data, perceive broadcast TV as less effective in delivering viewers, they will allocate their budgets accordingly. Mindful of this shift, brands, sports leagues, and event producers are adjusting their investments to align with viewer trends.

All of which makes measurement critically important. Big data now drives major decisions in television, with audience reach, resonance, and ratings determining the future of programming and advertising placement. As viewers follow content across new platforms, traditional rules for measuring media no longer apply, and systemic changes are underway in audience measurement.

With billions of dollars at stake, the media industry is undergoing an unprecedented process of self-evaluation. Media measurement firms, including Nielsen and ComScore, along with new entrants, have launched innovative models to meet the demands for more comprehensive and nuanced measurement from advertisers and networks. Even these have been challenged as the industry seeks an equilibrium between the traditional methods and the yet unproven measurement systems.

Meanwhile, media mergers, though infrequent in recent years, may soon see a resurgence. Paramount, owner of CBS and other assets, is reportedly entertaining acquisition offers. Reports suggest Sony and private equity firm Apollo are contemplating a $26-billion bid for Paramount, with plans to divest the 28 CBS-affiliated local TV stations as part of the deal. Such a sale would likely trigger a shoving match among potential buyers eager to acquire the venerable CBS network’s storied assets, which remain Hollywood stardust.

Among the putative buyers, for example, are the following: A strategically savvy Fox has a knack for making the right moves at the right time. A steady and ambitious Nexstar has the balance sheet and experience to pull off another big merger, much like its acquisition of Tribune. Industry stalwart Sinclair, America’s number-two local broadcast TV owner, is reportedly selling 35% of its 185 TV stations, possibly to make room for future acquisitions. And media hedge fund Standard General has shown it can put financing and operations together for a big acquisition, even though the FCC inexplicably derailed its plan to buy major broadcast group TEGNA last year. These, and others, would be likely suitors for the valuable CBS stations.

But, as with every major media deal, all roads lead to Washington and the FCC, which is charged with ruling in the “public interest.” In that respect, the regulatory framework that governs the ownership of media properties is in need of repair and renewal, particularly the national ownership cap, which restricts a single company from owning TV stations that reach more than 39% of American households. Harking back to 1941, this outdated rule was designed to protect localism, diversity, and competition. Today, however, the broadcast media market is fiercely competitive.

The video market now includes not only traditional television but also cable and Internet video providers with bigger budgets and deeper pockets. This expanded competition features not just the five major networks but also tech giants like Facebook, Amazon, Apple, Netflix, and Google, along with pay TV providers such as AT&T, Charter, Comcast, and DISH. Unlike traditional broadcasters, these entities are not subject to rules limiting their reach, and they operate with a national footprint free of regulatory oversight.

The American television market is at a critical juncture. Traditional broadcasters face daunting challenges to adapt and survive amidst technological change, shifting consumer preferences, and an expanded competitive landscape. Audience fragmentation and the migration of advertising dollars to robust digital platforms demand that broadcasters move rapidly to remedy the regulatory environment, with its outdated ownership caps, in order to grow scale and compete with their digital counterparts.

Broadcast TV, a uniquely American invention, delivers local news, sports, and community events that no other media can.  For many Americans in both inner cities and on rural plains it remains the only option. Both Congress and the regulatory agencies should do everything in their power to preserve this legacy, not only in the interest of the industry, but more importantly for the American public. Despite the changes and challenging conditions, American TV remains the gold standard for broadcasting around the world. Let’s hope that Congress and our future presidents recognize and appreciate our national treasure. 

© 2024 Adonis Hoffman

Adonis Hoffman writes on business, law, and policy. He served in senior positions in the U.S. House of Representatives and at the FCC, and as an adjunct professor at Georgetown University. He is a member of The Media Institute’s Board of Trustees and First Amendment Advisory Council.