Cable News Is Still A Dying Business

This week might well mark the last time we ever care so much about cable TV news.

It was, to be fair, quite a sendoff, with the unexpected firing of Tucker Carlson from Fox and the somewhat less unexpected (but still surprising) firing of Don Lemon from CNN.

That does not, however, mitigate the fact that cable news is dying. Slowly, in a way that is not always immediately obvious, but it’s dying.

Not because it’s become irrelevant, but because the medium it lives on, cable TV, is dying.

The whole “massive wave of cord cutting” thing is complete bullshit, something you might have heard us mention a time or two, Or twenty.

But that doesn’t mean that it’s not happening, slowly but surely, a couple of million less subscribers each year. Maybe even each quarter. 

Virtual MVPDs like YouTube TV and Hulu Live TV have stanched some of the bleeding but that’s a temporary fix, a few more years to live, not a miracle cure.

So eventually, probably sometime in the next five to ten years, cable TV is going to stop being worth it for all parties involved and will, for all intents and purposes, disappear.

That will suck especially hard for cable news networks which have been massive cash cows for their owners.

Cable news networks do not make the bulk of their revenue from ads, but rather, from the outsized carriage fees the MVPDs and vMVPDs pay them. 

That is because there is still a tacit understanding that millions of viewers continue to subscribe to traditional pay TV in order to maintain access to their favorite cable news network(s).

Either because they are a massive fan who watches said cable news network all day long or because they are under 65 and still feel they need to have access to cable news in case Russia invades another country or the next election is in dispute. (The fact that the various broadcast network news services cover these events on streaming for free or via a service they likely already subscribe to seems to have not fully sunk in, but that’s a different issue.)

As the regional sports networks—the other reason people allegedly kept their cable subscriptions—all seem to be launching subscription streaming apps this year, cable news networks have become more, not less valuable as they are increasingly seen as the last thread holding the whole ecosystem together.

Until, of course, they’re not, and the numbers no longer add up. 

The MVPDs already make the vast bulk of their income from selling broadband and TV is just a loss leader, a service their subscribers have come to expect. So easy enough to offer a bundle of streaming subscriptions at a discounted price along with a streaming box that has a passel of FASTs pre-installed as well.

So then what?

The cable news networks can launch their own streaming apps, they can be folded into their parent company’s existing apps, or both. If they’re feeling really creative, they can even work deals to distribute their content across all of the various streaming services as a way to increase their reach.

Regardless, the subscription fees and ad revenue they will be able to get from these streaming deals will pale beside the money they get from today’s carriage fees.

It’s why there are rumors that Shiv, Kendall and Roman the Murdoch children want to sell off Fox News while they can still get big bucks for it and why WBD quickly slit the throat of CNN+ and very purposely kept CNN off of Max, so as to preserve those carriage fee millions for as many years as they possibly can. 

What happens to TV news at that point is really anyone’s guess. But it’s more than likely that it will not resemble the cable news ecosystem that ruled for the past three decades, the one that lived and died on Nielsen ratings.

And that, as frequent cable news guest Martha Stewart likes to say, is a good thing.