Why Major U.S. Networks Have Lagged in Global Streaming: Economics and Licensing

The question of why major U.S. networks such as NBC, ABC, CBS, and others have not yet embraced live global streaming of popular TV shows is a multifaceted one. This article explores the economic and licensing challenges that these networks face, as well as the potential solutions that could change the current landscape.

Economic Factors: Prices of Broadcasting vs. Internet Delivery

In traditional broadcasting models, networks have a relatively fixed cost structure. Unlike the internet, where delivery costs increase linearly with the number of users, broadcast infrastructure costs are largely fixed, regardless of the number of viewers. This is due to the costs associated with setting up and maintaining infrastructure, including cables, transmitters, and satellites.

However, there are signs that this traditional model is starting to shift. According to Shoaib Taimur, Internet Service Providers (ISPs) such as Comcast, ATT, and others are beginning to explore ways to enhance multicast broadcasting over the internet. This would save both ISPs and content distributors significant money, making live global streaming more feasible. Additionally, direct subscription models and targeted advertising could justify the higher costs associated with streaming services.

Licensing Restrictions and Revenue Loss

A key reason why major U.S. networks have been slow to adopt global live streaming is the licensing restrictions and potential loss of ad revenues. These networks rely heavily on their domestic markets for both content production and revenue generation. The producers of these shows derive significant income from syndication and sales to networks in other countries.

Streaming content globally would directly impact ad revenues, as these networks have established contracts and agreements with advertisers and sponsors that rely on the specific demographics and geographic reach provided by their domestic markets. For instance, they might lose out on regional keywords and advertising campaigns that are specifically aligned with their US audience.

Is There a Solution?

The solution to the current limitations lies in finding ways to monetize global streaming while complying with existing licensing agreements. One potential avenue is expanding the current deterring gap between U.S. and international releases. This has proven to be an effective strategy in the film industry, with movies often being released in theaters around the world at almost the same time.

Similarly, TV shows could be strategically delayed in international markets, allowing U.S. viewers to enjoy content first. For example, if the gap between the U.S. and international releases was reduced to just a few days or weeks, networks could leverage this exclusivity to attract subscribers to their streaming platforms.

Conclusion

While the current economic and licensing structures pose significant challenges for major U.S. networks in adopting global live streaming, there are potential solutions. Multicast broadcasting technologies, targeted advertising, and carefully managed release schedules could make global live streaming a viable and profitable venture. As technology continues to advance and consumer habits evolve, these networks are likely to adapt in order to maintain their market dominance and revenue streams.