The looming existential crisis for cable news
After a week of promotion and controversy, CNN staged a live town hall telecast with Donald Trump this month that was studded with the former president's insults and falsehoods. It drew thunderous criticism - but strikingly few eyeballs.
The 70-minute broadcast attracted an audience of just 3.3 million viewers, about a third less than the number of people watching an episode of "Celebrity Wheel of Fortune" on ABC the same night.
The tepid response may reflect Trump's waning drawing power, or the fact that the town hall aired eight months before primary voting begins. But it also tells an ominous tale about cable news's declining influence and troubled business model.
As recently as 2016, when Trump was narrowly elected president, just over 70% of all households with a TV had cable or satellite TV subscriptions. Today the figure is just under 40%, according to S&P Global Market Intelligence, a research firm. And it's dropping fast.
During the first quarter of 2023, another 2.3 million customers (or 7% of the total) cut the cord to traditional cable - the fastest cancel-my-subscription pace ever recorded, according to MoffettNathanson, another research firm. The company estimates the number of homes receiving TV via cable is now about the same as it was in 1992, when the industry was still on the rise.
"Cable news is dying," wrote Alan Wolk, a veteran advertising executive and media consultant, in a recent newsletter about the TV industry. "Not because it's become irrelevant, but because the medium it lives on, cable TV, is dying." He predicts that cable could, "for all intents and purposes, disappear" within a decade.
The advent of coaxial copper connections turned TV news from a once-or-twice a day ritual to something more like a lifestyle for millions of people drawn by the urgency of breaking stories and political commentary on a 24-hour cycle.
CNN's agenda-shaping power was most evident in the early 1990s when Larry King repeatedly featured a business tycoon named Ross Perot on his popular evening program - helping to launch a third-party bid for the presidency that captured 19 percent of the popular vote and tilted the race to Bill Clinton over George H.W. Bush. The next year, nearly 17 million people watched Perot debate Vice President Al Gore about the North American Free Trade Agreement on King's show.
Fox News flexed its muscles among conservative voters during the 2004 race by providing a platform for skeptics of John F. Kerry's Vietnam service; their "Swift Boat" campaign undercut his chances against incumbent George W. Bush, whose own service record had been questioned. Later, its coverage helped fuel the rise of the conservative tea party in 2009 and deflected criticism of Trump's many scandals while in the White House. And CNN, Fox and MSNBC alike enjoyed ratings surges when they showcased candidate Trump in 2016 - whether negatively or positively.
Yet for all the commentary and social media chatter surrounding CNN's Trump town hall this month, the telecast "didn't move the needle" on any opinion polls, said Michael Socolow, a professor and media historian at the University of Maine. He called it "completely meaningless" as a political event.
The leading cable networks remain enormously profitable, largely because of the economic dynamics of the larger cable industry. The financial foundation of cable news isn't advertising but the license fees that cable-system operators pay for the right to carry them. Regardless of whether a cable subscriber watches Fox, CNN or MSNBC, their monthly cable payments help fund those companies.
Last year, the licensing fees collected by the six biggest cable news networks (Fox, CNN, MSNBC, CNBC, Fox Business and HLN) amounted to just over $4 billion, according to S&P. Advertisers added another $2.6 billion.
But the day could soon come when an exodus of cable subscribers leaves cable operators unable to afford the hefty license fees that those news programmers now command.
The major cable news networks have all joined the push to distribute programming via a welter of digital technologies - streaming apps, YouTube channels, podcasts, social media platforms - to meet the cord-cutters where they are. Yet so far, no news app comes close to matching cable in popularity and profitability.
Fox Corporation's chief financial officer has suggested that its cable news channel could rapidly move all its programming onto Fox Nation, its subscription streaming platform, if it chose to. But thus far, a Washington Post calculation suggests that at $6 a month, Fox Nation's subscribers (said to be 1.5 million strong two years ago) generate far less than 10 percent of the $3 billion Fox News collected from the cable industry last year.
CNN's foray into streaming, meanwhile, was a well-publicized debacle. The network's new owner, Warner Bros. Discovery, abruptly shuttered CNN Plus barely a month after the platform's launch last year, having determined the projected investment wouldn't pay off for many years.
Wolk, the TV-industry analyst, said news will have a particular problem in crossing the bridge from cable to streaming: The median cable-news viewer is in their 60s, a cohort resistant to taking up new technology.
And while he thinks cable news channels could also license their programming to established streamers like Netflix or Apple Plus or join a corporate "bundle" - NBCUniversal's Peacock already offers some MSNBC content - streaming still doesn't have "the rosy economics" of traditional cable news.
Still flush with license fees and ads, the news networks have little urgency to abandon cable at the moment. And regular viewers are still relatively loyal: The prime-time audience for Fox, CNN and MSNBC last year was down just 1% last year compared to 2012, according to Nielsen figures.
But it's not hard to spot the trouble signs. The rest of the cable lineup has sagged disastrously over the past decade as younger viewers have deserted cable. USA Network, once the most popular cable channel, has lost 75% of its nightly audience over 10 years. FX is down 68%. History Channel is off by 65%.
The post-cable world seems to promise more of what the four-decade rise of round-the-clock cable news began - the splintering and fragmenting of the mass audience and a "shared culture," said Purdue University historian Kathryn Cramer Brownell.
The author of the forthcoming "24/7 Politics: Cable Television and the Fragmenting of America from Watergate to Fox News," Brownell notes that CNN fragmented the news audience once dominated by ABC, CBS and NBC; and that Fox and MSNBC split the market further by appealing to passionate partisan segments of the audience.
The future suggests even more "narrowcasting," she said, with a niche for every taste and political ideology, and "edgier" than anything available today.
But those platforms almost certainly won't be as lucrative, Wolk predicts. "The days when someone like [CNN anchor] Jake Tapper can command millions of dollars in salary will be over," he said.