Don’t Expect Netflix to Save U.S. Broadcast Networks

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News of Netflix’s unexpected agreement at Cannes Lions, where they announced they would broadcast the TF1 channels in France, quickly spread worldwide.

When discussing the leading subscription streaming service venturing into linear TV through a significant partnership with a broadcaster, it’s not hard to comprehend why such a move is being made. A broadcast TV veteran texted “Wow,” Wednesday morning, forwarding a link to an article about this groundbreaking agreement in The Hollywood Reporter.

When you hear that the top-tier streaming service is entering linear TV by partnering with a major broadcaster, it’s not surprising. A longtime broadcast TV professional texted “Impressive,” Wednesday morning, sending along an article about this monumental deal from The Hollywood Reporter.

Lastly:
When news broke that the prominent streaming service was joining forces with a significant broadcaster for linear TV, it’s not shocking. A veteran in broadcast TV texted “Wow,” Wednesday morning, sharing an article about this game-changing alliance from The Hollywood Reporter.

There’s a strong possibility that Netflix’s partnership with TF1 could serve as a model for future strategic moves, given the company’s past actions. However, there are compelling arguments to suggest that while such deals might be replicated in various global markets, the U.S. is unlikely to follow suit anytime soon.

The factors stem from Netflix’s vast size and influence, as well as the refined business models of traditional broadcasting and cable TV in the United States, which are uniquely developed compared to many other global markets.

Despite no longer disclosing subscriber numbers on a quarterly basis, it’s clear that Netflix is approaching a saturation point in the U.S. Many households already have Netflix, and efforts like the crackdown on password sharing and the introduction of a lower-cost ad-supported tier have maintained growth. However, there’s a natural limit to this expansion. Eventually, every household that wants Netflix will likely have it. At that point, the cost-benefit of acquiring remaining subscribers becomes less appealing. Instead, Netflix is now focusing more on keeping its existing consumers engaged for longer periods, with the aim of boosting its advertising business in the long run.

It’s true that Netflix doesn’t disclose subscriber figures by country, but it’s likely that there’s still room for growth in numerous major markets, including France. Other countries might also fit this category. Expanding into terrestrial broadcasting could potentially help increase market share as viewers increasingly shift to streaming services.

As an enthusiast, I’m keen on contributing to the cause that many nations, such as France, are advocating for – increasing the quantity of locally produced content on streaming platforms like Netflix. This could be my small part in supporting local talents and cultures.

For broadcast stations such as TF1, teaming up with Netflix might serve as a vital lifeline, enabling them to evolve and stay afloat in a rapidly transforming media consumption environment.

If the cost fits well and the charges are fair, it might lead to an enticing proposition for Netflix, as they strive to be nothing more than television, offering programming catering to all demographics.

The U.S., however, is a different story.

For a considerable period, American media corporations have been fine-tuning their offerings with the aim of generating maximum earnings and profits from pay-TV service providers. This approach often involves grouping together broadcast and cable channels during rights negotiations (for instance, if you want ABC and ESPN, you’d also need to pay for FXX and Freeform; if you’re interested in CNN or TNT, that might require TruTV and Destination America). Additionally, they have aggressively pursued high licensing fees for the channels with the highest viewer appeal, such as broadcast networks.

Although NBCU’s Versant spinoff and Warner Bros. Discovery’s impending separation suggest the unraveling of such a strategy, it appears unlikely that any American media company will separate a broadcast network from its other services in the near future. Furthermore, many of these companies now provide mass-market streaming services themselves, such as Peacock and Paramount+, offering live broadcast streams along with on-demand content from their various channels.

In this industry, we’ve reached a point where the traditional pay-TV model in America has been optimized to its fullest, squeezing out all possible efficiencies and profit margins. This is due to the fact that the market has matured.

As a passionate gamer, imagine if I could stream just the gameplay from Nintendo without all the extra channels like Mario Kart TV or Splatoon 2 League, or Sony was okay with me playing only PlayStation exclusives without having to deal with PlayStation Network or PlayStation Vue. However, the price tag for accessing these games continues to skyrocket. It’s a similar situation with broadcast networks like Fox and CBS; even if they were willing to license just their feed without Fox News or Nickelodeon, retransmission fees for those networks are still going up.

Kagan points out that in 2024, the multichannel broadcast fee amounts to approximately $21.48 per subscriber each month, which is essentially a charge passed on by pay-TV companies to cover broadcast fees. This fee encompasses all local TV stations within a particular market, with the majority of it being distributed to the local NBC, ABC, CBS, and Fox stations in that region.

Approximately, it would set the monthly fee for each subscriber of a significant American broadcast network at around $0.30 to $0.50.

Currently, Netflix’s standard plan costs around $18 monthly. Given the current economic conditions, it seems challenging to mirror the TF1 deal in the U.S., as the financial calculations do not appear favorable.

Absolutely, economic circumstances can always evolve. At present, media leaders anticipate that the pay-TV package will eventually reach a minimum number of subscribers, but there’s uncertainty about how low this bottom limit might be. If this floor is lower than expected or if pay-TV experiences a significant downturn, companies might reconsider their bundling and distribution strategies, potentially focusing more on reach. Such a shift would likely advantage platforms like Netflix and YouTube.

Additionally, it’s possible that Netflix might choose to emulate services like Amazon, YouTube, and Roku by acting as a content aggregator, providing access to various channels and content at an extra cost.

As a devoted viewer, I’ve always appreciated Netflix’s wholehearted commitment to its consumer-focused, all-inclusive subscription model. However, if history has taught us anything, it’s that Netflix is adaptable and ready to adjust its strategies according to the changing times.

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2025-06-19 17:24