CNN’s International Max Out, Roku Is Off To The Races

1. CNN’s International Max Out

Yes, Warner Bros Discovery -- WBD-- is allegedly going to add live CNN feeds to Max. But no, it is not going to happen within the borders of these United States. It will only be overseas where the feed will presumably be CNN International.

At best, they are looking to run non-live segments of some of their more popular domestic shows on the US-based version of Max, but that is about it.

For those of us in the industry, however, the international-only move is not the least bit surprising. WBD has its hands tied over CNN in the US because it needs all the millions it rakes in from the MVPDs on carriage fees.

And while the exact number of millions is a number known only to the CNN finance team, I’d be shocked if it were not a nine-decimal number.

Which is why WBD is going to keep milking those carriage fees for as many years as possible. And why they very quickly killed off CNN+.

The question is, does that ultimately kill off CNN?

Why It Matters

It is more or less an article of faith among the MVPDs that access to live news and sports is the main reason most of their subscribers remain subscribers. Well that, and inertia. It sure isn’t the stellar customer service.

So both sides are going to keep this going for as long as possible. WBD because it needs the money (lots of AT&T debt to pay off), the MVPDs because they need the subscribers.

But here’s the thing: CNN’s average subscriber is already pretty old. Like if-they-lived-in-France-they-could-retire old. 

Younger folks, they have many other ways to get the news. So apart from those weeks when, say, Russia invades Ukraine or the US has a presidential election, they have zero interest in watching CNN. 

This is a problem because the more cable becomes a thing that older, less tech-savvy people still have, the less aware of it the younger viewers it needs to survive long term will become.

Mostly.

CNN, like Twitter, still gets a lot of love from journalists, for the simple reason that if you are a print journalist, a guest shot on CNN is a big career boost. So the network commands more head space than its viewership numbers would suggest. 

How long that will last is another story though as cable news becomes increasingly marginalized. And if that happens, CNN may not survive as a 24-hour TV news network.

What You Need To Do About It

If you are WBD, this is a tricky one.

You need the money from those cable deals and you do not want to kill that off. 

So what you really need to do is make a call as to whether cable news itself has any real future and what that future looks like.

For my money, the future is where Fox has taken it—talking head “infotainment” type shows based around a personality. Televised talk radio, if you will. 

That’s because cable news came about as a result of a hunch that there were a lot of people out there who were hungry for news outside of the 7pm and 11pm slots and what their local newspaper could provide them.

And there were. Lots of them. 

But now we have the internet.

And so news junkies can get whatever type of fix they want, whenever they want. Something happens and people go to Twitter. Not CNN or MSNBC.

So if I were WBD, I’d be doing just what they seem to be doing—figuring out how to integrate their more popular shows onto Max and then slowly sunsetting CNN, maybe figuring out other ways to expand the brand while it still has some name recognition, like turning the website into something that doesn’t look like the dog’s breakfast.

Just a thought.

If you are all the other streaming services, news is something you need to figure out too.

It’s popular now, but is it a good long-term investment outside of local? Are you better off having some talking head type shows too or is there a market for 24 hour news out there, and if so, is that market on SVOD or is it on the FASTs?

A lot to consider over the next few months.

2. Roku Is Off To The Races

Roku announced this week that it would be making its first foray into live sports by broadcasting Formula-E auto racing.

Formula-E, for the uninitiated, is auto racing for electric vehicles. It is actually a very popular sport, its last season drawing in almost 400 million viewers worldwide via outlets like the BBC.

Roku’s current deal is via a partnership with Paramount that will see the races run on CBS, on Paramount+ and on The Roku Channel, the latter being accessed via live sports hub on the Roku home screen.

The entire deal is a great illustration of how to best take advantage of the current hybrid TV landscape while also ensuring that you grow your user base.

It’s an especially smart move for Roku too.

Why It Matters

By striking a deal with Paramount, Roku gets the added benefit of being able to partner with a sizable legacy media company that can help drive traffic. While The Roku Channel competes with Paramount’s Pluto TV at some level, at another level they can take advantage of the “rising tide lifts all boats” scenario—it’s unlikely that viewers will pick one FAST and only watch that FAST.

Paramount also made a smart move here, running the races on CBS’s linear feed, on Paramount+ and on Roku. It’s a way to provide additional value for Paramount+ subscribers while also giving non-subscribers a way to watch for free (with ads) on Roku. So a lot of flywheels spinning all at once.

It also fulfills a prediction many of us have been making for some time, which is that the FASTs would become home to live sporting events from niche sports as a way to promote themselves to those audiences and to increase time spent on platform, which in turn increases ad revenue, which in turn increases profits. (So another flywheel.)

In addition, live sports give advertisers a way to reach an audience they can’t reach anywhere else: Ad Avoiders.

Those are people, generally well-paid and well-educated, who only subscribe to the ad-free tiers of streaming services and who likely have ad blockers on all their browsers. And so the only way to reach them is during live sporting events, where the ads are preferable to two more minutes of announcer babble.

It’s a valuable audience and if Roku can help advertisers get their messages in front of them, it is a win all around.

What You Need To Do About It

If you are Paramount and Roku, take a bow. Job well done, deal well constructed.

If you are one of the other FASTs, watch and learn—this is the future.

If you are a niche sport or sports league, watch and learn here too. The amount of televised sports is about to expand and the sooner you get in, the better deal you can strike.

If you are a fan of one of these niche sports, rejoice! No more watching grainy unofficial YouTube videos. You’re in the big leagues now.