About That "Digital First"

Earlier this week, FTVLive told you exclusively that Gray Media was pulling back in their streaming product. You can read that story here.

One Journalist and FTVLive reader emailed us with their take and we thought we would share.

Hi Scott

I read your post on Gray backing off its streaming push, and it feels like a familiar pattern where the industry blames the channel instead of the strategy.

In a lot of conversations I’ve been having around local TV’s digital transition, the core issue keeps coming back to this: most broadcast groups are still treating OTT, FAST, and connected TV as incremental distribution layers for linear, rather than as the basis for a fundamentally different product. Nexstar’s two-hour delay on streaming is another clear signal of that mindset.

That thinking is deeply tied to how these companies were built over the last two decades. The roll-up era, driven by aggressive M&A and debt loading, created groups optimized for scale, retrans revenue, and centralized cost control. The playbook was simple: acquire, consolidate, standardize, and extract margin. But the downstream effect has been a steady hollowing out of actual localism. If the primary objective is maximizing shareholder value through financial engineering, local news is a poor fit for that model. Newsrooms are thinner, more content is hubbed or syndicated, and programming decisions are increasingly driven by national ad yield rather than local relevance.

Viewers can feel that shift. “Local” news in many markets now looks and sounds interchangeable, and that erosion of distinctiveness is directly tied to declining trust and engagement. When stations were more locally owned and operated, DMA priorities showed up in the product because they drove real competition and investment.

These same operators are now approaching streaming with the same assumptions. OTT apps become little more than linear simulcasts. FAST channels recycle existing content loops. Digital success is measured in carriage and impressions rather than product-market fit. So it is not surprising that the economics look weak. If you are simply rehosting linear in a more competitive, fragmented environment, you lose the scarcity advantage without gaining anything new. At the same time, you are not meaningfully competing with technology platforms that specialize in distribution, data, and targeting.

What’s missing is a real pivot to what IP-based distribution actually enables. Streaming should allow for micro-targeted local broadcasting within a DMA, not just across DMAs. Different neighborhoods, language groups, or interest clusters could receive differentiated news segments, weather coverage, political reporting, and advertising in real time. That is a fundamentally different value proposition, both editorially and commercially, and it allows broadcasters to compete on something other than legacy reach.

The irony is that local news organizations already have the core competency that most tech platforms lack: the ability to produce original, community-specific content at scale. The infrastructure exists to build segmented production pipelines, but it is not being aligned with how content is distributed or monetized.

From a revenue standpoint, that level of segmentation opens the door to higher CPM local advertising, more precise political spend, and deeper small business participation. From a content standpoint, it restores the idea that local news actually reflects the communities it serves, rather than defaulting to lowest common denominator coverage that too often leans on “if it bleeds, it leads.”

Instead, leadership across the major groups still appears anchored to the linear model, without a clear strategy for how these technologies could redefine their hyper-local value proposition. The CEOs of Nexstar, Gray, and Sinclair have all emphasized digital, but there has been little evidence of a true product or operating model shift. The focus remains on preserving retrans revenue, managing debt, and extending linear cash flow, with streaming treated more as a hedge than a transformation.

So when Gray pulls back, it does not read as a failure of streaming or OTT. It reads as a failure to move beyond a legacy framework that no longer aligns with how audiences consume local content or how advertisers want to reach them.

I’m curious if you’re hearing any serious internal conversations about shifting toward a more segmented, data-driven local model, or if most groups are still trying to retrofit FAST and OTT into linear economics.