1. Fox News, CNN And The Future Of Cable News
Fox News was very much in the news this week as it agreed to pay Dominion almost $800 million to settle the libel case. (The current season of "Succession," a thinly veiled roman á clef about the Murdoch clan also helps keep them top of mind.)
Ditto CNN, whose absence from the newly minted Max has been duly noted, along with their continuing struggle to reinvent themselves under Chris Licht.
All of which raises the question of what happens to cable news once cable goes away.
Because with the RSNs all rapidly launching their own streaming apps, it’s reasonable to ask whether cable news will be enough to keep cable alive, and if so, for how long? Two years? Five years? Ten?
And then what?
Does Fox News just shift over to Tubi while CNN becomes a part of Max? Will either service have any real value in a streaming-only world? And how will advertisers determine that value in a world where ratings don’t seem to count for much.
Why It Matters
24 hour news is one of the more successful innovations of the cable era. Networks like CNN, Fox News and MSNBC have long been ratings champions and, in an era when superior offerings on streaming have led to a steady drip of cord cutting, cable news networks have given viewers a reason to cling on to their cable subscriptions.
Which is not to say they don’t have issues.
The biggest issue is that their viewers are old. Like really old — the average age for all the national cable news networks is early to mid-60s and while the other networks delight in the fact that Fox’s viewership is a few years older, it’s not really a significant advantage if your average viewer is 62 rather than 65.
Especially for advertisers, which is why cable news has become a cesspit of DTC pharma ads.
There’s also the commonly-held assumption that retired seniors who keep Fox or CNN blasting from the moment they wake up to the moment they fall asleep are largely responsible for those high ratings and that there are a large number of people who, though they like having access to the service, really only tune in to watch on Election Night or when something very major happens, like Russia invades Ukraine.
So there’s all that baggage and then there are carriage fees.
Or should I say carriage fee$$$.
You see, it is widely assumed that access to these cable news networks is a big reason why so many people continue to subscribe to cable, and so the MVPDs are only happy to keep paying all those hefty carriage fees.
Neither WBD nor Fox wants to see that money train derailed, so they’re in no rush to move all their assets to streaming. (This is why CNN is not on MAX, why the plug got pulled on CNN+ and why Fox Nation is mostly a way to make money off of mega fans. Or MAGA fans. Take your pick.)
But all good things must come to an end, and at some point they are going to have to make a permanent move to streaming.
The question then becomes do they migrate to their parent company’s streaming service — CNN to Max and Fox to Tubi (and would Tubi even want them) or do they try and strike deals with multiple services, both SVOD and FAST, in the hopes of collecting a decent amount of carriage revenue while reaching as broad an audience as possible.
The latter seems to be a smarter way to go about things, if the various SVOD and FAST services are willing — it gives them more money, a much broader user base and a true national platform versus being the house news organ of a single streaming service.
News is a very popular category on streaming, and having national news channels that live across multiple services would seem to be a win, especially since the various streamers could then use CNN and Fox to appeal to seniors while also driving traffic to their other shows.
Not to mention all the data they could collect.
Something to think about.
What You Need To Do About It
If you are Fox or WBD, definitely try and ride that carriage-fee gravy train for as long as you can. No one is ever going to pay you that much money again. That said, you should be thinking about how you can recreate that revenue in streaming (or at least some of it) by striking deals with as many SVOD and FAST services as possible.
If you are Apple, Amazon or Google, here’s a thought: America is probably ready for a different kind of 24-hour news service, one that is not perceived as being brazenly partisan and/or something that only crotchety old people watch. This could be a huge opportunity, especially if you pair it with local versions of your national service.
If you are ABC, NBC and CBS, this could be your chance to give your news divisions renewed relevance by turning them into 24-hour services and adding in feeds from your O&O’s and local affiliates. Because what you’re doing now isn’t exactly working, KWIM?
2. Netflix’s Password Sharing Crackdown Dilemma
Netflix has promised to start cracking down on password sharing, only it’s a tricky line for them to navigate, especially here in these United States, where you’ve got many instances of college and post-collegiate children still using their parents’ accounts. Accounts they themselves may have set up back when they were in middle or high school.
It’s a problem because there are numerous other instances where young adults have no trouble staying on their parents accounts, everything from cell phones to health and car insurance to newspaper subscriptions to Spotify.
So pushing them off onto their own accounts carries the distinct possibility of seeming punitive.
Point being it needs to be handled gingerly or it could become a public relations disaster.
And that whatever you do is going to get a whole lot of scrutiny because you’re Netflix and because it’s likely to be a roadmap for the rest of the industry.
So how to handle it?
Why It Matters
Netflix should probably start with the obvious culprits, adults who are using passwords obtained from former roommates, ex-girlfriends, someone else’s parents, online message boards and the like.
Those people clearly should not be using someone else’s account.
Young adults who are out on their own but still using Mom and Dad’s accounts should be next, and Netflix seems to have a plan for that: give them a “non-resident family member” type account for around two or three dollars a month that falls under the umbrella of the main account (where Mom and Dad can keep paying for it) and where, more importantly, all the viewing data they’ve built up over the past decade still lives.
College students are trickier. Probably best to let them stay on their parents' accounts given that they are likely living at home during summer/winter break and may well wind up back home after that.
So that’s the physics of it, but mostly it’s going to take a massive PR balancing act to reinforce that Netflix is not being punitive and that sharing accounts with strangers is not only uncool, but illegal.
There’s a more existential question here too: is it worth it for Netflix to do this? Or, as an unfortunate Stanford administrator recently asked, is the juice worth the squeeze?
On the one hand, there’s the very real possibility that this could turn into a PR disaster. Or a very divisive issue with half the country on Team Netflix and the other on Team Password Sharers.
On the other hand, there’s the fact that Netflix already has around 66% penetration in U.S. households and that doesn’t give them a whole lot of runway for bringing in new subscribers — mobile phone penetration, for example, is only at around 80%.
So bringing in new revenue and juicing subscriber numbers — ad-supported subscriber numbers in particular — by cutting down on password sharing is likely worth the squeeze.
Provided that squeeze is a gentle one, of course.
Because who doesn’t love beating a metaphor to death.
What You Need To Do About It
If you’re Netflix, read the above. You’ve no doubt been giving this a lot of thought, and so long as you remember how important spin is to this whole undertaking, you’ll be fine.
If you’re one of the other streaming services, you’re going to have to do this too soon enough. So pay attention.
Granted, you won’t be facing the level of password sharing Netflix is, but every little bit counts, and the more you can all act in concert as to getting audiences to understand what is and is not acceptable, the easier it will be all around.
This summer at the StreamTV Show in Denver join us as TVREV presents “The Future of FASTs Workshop” on June 12, 2023. TVREV’s “FASTs Are The New Cable” reports helped define the state of FASTs today. In this session, brought to you by TVREV and the StreamTV team, we’re going to take things to the next level. Come participate as we talk to key thinkers and decision-makers in the field to explore where the FAST ecosystem is heading in the years to come with an eye towards the ways it will impact programming, advertising, the interface and local TV. View full StreamTV Show Agenda.
Alan Wolk is co-founder and lead analyst at the consulting firm TV[R]EV. He is the author of the best-selling industry primer, Over The Top: How The Internet Is (Slowly But Surely) Changing The Television Industry. Wolk frequently speaks about changes in the television industry, both at conferences and to anyone who’ll listen.
Wolk's Week in Review is an opinion column. It does not necessarily represent the opinions of Fierce Video.