WASHINGTON-ABC, CBS, Fox and NBC television affiliates have joined forces in an attempt to convince the Department of Justice's Antitrust Division that the competition standards for broadcast television are out-of-date and are in need of an update to properly evaluate the impact of satellite, cable and digital competition.
In a joint letter to Assistant Attorney General Makan Delrahim, the affiliates claim that the Antitrust Division has only local broadcast stations competing against each other in their local markets and excludes satellite, cable and digital when it comes to viewership and advertising data. This viewpoint no longer matches the current market reality, the affiliates argue, but it is continuously the determining factor in the division's review of broadcast transactions, stifling broadcasters' ability to achieve efficiencies to allow them to provide high-quality entertainment programming and locally-focused news, weather and sports.
When it comes to local advertising, the affiliates argue that the division's definition for relevant markets is too narrow and does not account for the full array of competitive services. The division only considers local broadcast TV advertising and excludes cable spot advertising, digital advertising and advertising on all other forms of media. This does not take into account that audiences and advertisers are substituting TV advertising with digital advertising, according to the affiliates.
PLUS: IAB: Linear TV Advertising Down 24% in 2020
The affiliates cite a Kagan report that showed that digital ad revenues grew by a compound annual growth rate of 17.7% from 2010-2019, with its share of the total U.S. ad revenue growing from 12.6% in 2010 to 42.2% in 2019. Local broadcast TV, meanwhile, have seen their share of total ad revenue drop to 7.1% in 2019. In addition, those who do spend on TV advertising, also spend on advertising for other platforms.
The division's stance on these trends, per the affiliates, has been that TV still draws large audiences and has a broad reach, while the other media outlets are complementary, not substitutes, for broadcast TV advertising. This does not account for the technological shifts and changes in viewing patterns currently taking place, the affiliates argue.
Nielsen estimates have shown that the weekly amount of time adults 18 and over spent viewing linear TV fell by 15.5% from 2014-2019; that number is 23.7% for adults age 35-49 and more for adults under the age of 35. The affiliates also claim that cable has long exceeded the broadcast audience, and viewers, especially younger ones, are increasingly consuming video online. Advertisers have reacted accordingly, the affiliates say, and have been pushing ads across multiple platforms.
PLUS: Nielsen: Streaming Media Made Up Quarter of TV Viewing in Q2 2020
The continued adherence to a market definition that has persisted for more than two decades defies the fundamental changes in consumer and resulting advertiser behavior, the affiliates said in their letter.
Because of the out-of-date market definition, affiliates say that most transactions between in-market broadcasters will end up being denied or face a prohibitively expensive regulatory review. This would hinder the advantages that these transactions could provide in increasing output, according to the affiliates.
We therefore respectfully submit that not only are broadcast transactions subjected to an outdated view of the market but that clinging to this anachronistic view has a deleterious impact on local journalism and programming, the affiliates conclude.
The full letter can be viewed online.
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WASHINGTON-ABC, CBS, Fox and NBC television affiliates have joined forces in an attempt to convince the Department of Justice's Antitrust Division that the competition standards for broadcast television are out-of-date and are in need of an update to properly evaluate the impact of satellite, cable and digital competition.
