Streaming Services Scooping Up Big Four Affiliates As Competition Grows

The following post comes from Kagan, a research group within S&P Global Market Intelligence. To learn more about our TMT (Technology, Media & Telecommunications) products and/or research, please request a demo.

Until recently, live local broadcasts have been slow to arrive on streaming TV bundles. But fortunately for consumers, affiliates are opting in to streaming deals more rapidly, in large part due to the big four networks' blanket arrangements that allow the affiliates to opt in to these streaming deals. Even fuboTV, which once focused on sports content, has recently entered the broadcast-streaming space.

As competition heats up, virtual service providers such as Hulu LLC's Hulu with Live TV, AT&T Inc.'s DIRECTV NOW, and Sony Corp.'s PlayStation Vue are racing to add live local stations to bolster channel lineups and lock in subscribers.

Kagan, a media research group within S&P Global Market Intelligence, has examined the streaming sector to gauge the reach of ABC, CBS, FOX, and NBC in the space. Our October 16 analysis is based on the most recent company reports and public information for select VSPs, including Hulu with Live TV, DISH Network Corp.'s Sling TV, Sony's PlayStation Vue, AT&T's DIRECTV NOW, Alphabet Inc. unit Google Inc.'s YouTube TV, and FuboTV.

Hulu is set to spend around $2.5 billion on content in 2017, according to a report from Variety. The service plans to add seven more original series within the next six to nine months. Since its beta launch in May 2017, Hulu has grown its total household reach of live local stations to nearly 103.0 million, or 84.1% of total U.S. households.

Walt Disney Co., 21st Century Fox Inc., Comcast Corp.'s NBCUniversal Media LLC, and Time Warner Inc. each have a stake in Hulu, and the service now has 199 big four stations across 145 markets, the most of any of the services in our analysis. Hulu with Live TV is also the top VSP for CBS offerings outside of the CBS All Access OTT service.

In September, Hulu launched on Roku Inc. streaming devices, leaving Sony PlayStation as the final major platform not supporting the service. Hulu's live TV service is available on Apple Inc.'s Apple TV, Microsoft Corp. Xbox One, iOS and Android devices, Chromecast, and Amazon.com Inc.'s Fire TV and Fire Stick devices.

DIRECTV NOW has 149 livestreaming big four stations. The service added 17 ABC affiliate stations, seven NBC stations and 17 FOX stations since the end of July. In August, DIRECTV NOW announced it would start adding CBS stations in 14 major U.S. markets in time for the start of the NFL season. As of October 1, the service had 15 CBS stations in as many markets. The service now covers 91.2 million U.S. households with live stations, or 74.5% of total U.S. households.

Over the last few months, DIRECTV NOW has added several CBS, NBC, and FOX affiliates to the service, including stations owned by Nexstar Media Group Inc. and Sinclair Broadcast Group Inc.

YouTube TV has expanded into 34 more markets since our July analysis, bringing its total market count to 49. The new TV markets include Cleveland, Denver, Indianapolis, Milwaukee, Oklahoma City, Salt Lake City, San Diego, St. Louis, Baltimore, Boston, Cincinnati, Las Vegas, Pittsburgh, San Antonio, and Seattle-Tacoma. As of October 1, YouTube had live station streams of big four stations in 81.3 million U.S. households covering 66.5% of total U.S. households.

In August, YouTube struck a partnership with Sinclair that gave YouTube the rights to carry all of its ABC, CBS, FOX and NBC affiliates in their respective markets. Sinclair has made streaming deals with other service providers but not to the same extent. Sinclair has FOX and CBS affiliates available on PlayStation Vue and ABC stations on DIRECTV NOW; however, it has none on Hulu with live TV or Sling TV.

FuboTV is a sports-first streaming TV service catering to soccer and college football fans upon launch, but has greatly expanded the number of channels and types of sports available since. On September 26, FuboTV added MSG Networks Inc.'s regional sports networks covering live games from major basketball and hockey teams for the New York market.

After picking up investors such as 21st Century Fox in early 2016, the service added FOX and NBC stations later that year. As of October 1, FuboTV offered 66 live FOX stations, 11 NBC stations, and 20 CBS stations covering over 75.5 million U.S. households, or 61.7% of total U.S. households. FuboTV crossed the 100,000 subscriber mark in September.

PlayStation Vue bumped up its nationwide price to $40.00 per month in July 2017, up from $30.00 on the strength of its local channel coverage. This comes as PlayStation Vue is eliminating its slim plans for subscribers in markets with fewer or zero local stations.

With the price hike, the service made a mad dash to add as many live local stations as possible and has added 79 live local stations since our July analysis, now totaling 187 stations, more than doubling its offerings of CBS live local stations from 51 to 106 as of October 1. The service now covers 96.7 million households or 79.0% of total U.S. households.

Sling TV has not been focused on signing new affiliates to stream live since our July analysis. The service added just one station, with NBC affiliate WBTS-LD in Boston. Sling TV's 36 livestreaming stations cover 53.1 million U.S. households or 43.4% of total U.S. households.

The service is continuing its promotion of a free over-the-air antenna or AirTV Player with a prepaid two- or three-month subscription. The $99.99 AirTV television player combines Sling TV channels and free over-the-air broadcasts in one device and channel guide.