Pundits vs. Pulitzers

Cable news is becoming more partisan. The rest of the news business may follow

Cable News used to be a cyclical business. Every four years, preened candidates would jostle for the White House and ratings would skyrocket. Then after election day, they would taper off as viewers tired of the jockeying and jousting, gradually climbing again when the race restarted.  

But then Trump won. Cable news kept their viewers. News channels have grown viewing every year since 2016, with audiences salivating over the latest Machiavellian machinations - and the mayhem.  

This dizzying performance is more remarkable given the decline across the cable industry. Cable television is a business in perpetual free-fall. Cable-owning households peaked in 2010 at 105m households and have declined to stand at 82.9m households today. Another chunk is forecast to disappear soon, particularly as a looming recession forces households to rethink their fat cable bill and the rich catalogue of Netflix emboldens ‘cord-cutting’. Most cable channels have faced a precipitous erosion in ratings. MTV attracted both derision and sympathy when it revealed a late-June line-up that dedicated a full 113 hours of its 168-hour schedule to a single show, “Ridiculousness.” It suggested a channel in full surrender to the eddying currents of viewer drift.  

Live programming is the cable industry’ bulwark, continuing to attract viewers and needling re-subscriptions. It remains a sphere of television yet to suffer major incursion by the streaming services, which have mastered scripted and reality television. Now, with the shuttering of sports stadia and the limiting of major leagues, coupled with the obvious interest in a life-rattling virus, cable news has become television’s most nourishing lifeblood. In the last week of June, the highest-rated cable networks were: Fox News, MSNBC and CNN respectively.  

Individual cable news shows have punctured records. Tucker Carlson reported the highest-rated cable news show in history in June. Rachel Maddow also recorded her highest-rated show when she interviewed Mary Trump in July, with over five million viewers tuning in.  

There are more viewers for cable news than ever before.  

Why is it so popular? Clearly, events have fostered interest. But these rating rallies have also marched lockstep with increased partisanship.  

Fox News has long relied on a prime-time line-up of opinion to drive ratings. At times, this has strained the relationship with its’ more sanguine news coverage, which typically runs throughout daytime. The exit of Fox’s Chief News Anchor, Shepherd Smith, signalled a victory for the opinionated primetime caucus. Meanwhile, MSNBC has pivoted their channel into being the liberal antidote to Fox News. The Mueller Inquiry became their touchstone issue last year, with their hosts covering every wheedling twist and excitedly raising the spectre of impeachment. They have built a slate of commentary shows to rival Fox’s primetime. Maddow wins the cable race for liberal viewers: she is the lead cable show for same-sex couples, according to Nielsen

Afraid of being left behind, The New York Times reports how CNN has re-positioned itself: 

“CNN once positioned itself between MSNBC and Fox on the political spectrum. But during Mr. Trump’s tenure, the network concluded that there was no profitable middle ground.”

CNN doubled down on Democratic programming, broadcasting townhalls and interview slots with key party contenders. Even apolitical channels are seeing opportunity. The New York Times recently reported that NBC is considering pivoting CNBC, its business-centric news channel, into featuring a right-wing opinion slate at primetime. 

The trend towards opinion is global. In Australia, Sky News Australia features talk shows in primetime, including from Andrew Bolt, a right-wing commentator who attracted record ratings this year. Sky News UK also features opinion shows, such as ‘The Pledge’. These were previously channels that eschewed opinion in favour of rolling news. 

The growing success of these opinionated news networks, and the stalling of other strands in media empires, has meant increasing corporate reliance on their performance. There is a temptation to drive higher ratings and revenue with an expanded partisan focus to offset declining performance elsewhere.  

Fox Corporation now relies on their cable division, including Fox News, for over 90% of corporate profits. Opinion enhances a channel’s identity and makes viewers value it more. This increases what the channel can demand in affiliate fees. These are the fees paid to cable channels by cable companies – the “pipes” which sell the cable packages to households – and are a vital source of revenue for the channels, alongside the more traditional advertising income. For example, Fox gets 49% of their revenues for cable television from affiliate fees, and 44% from advertising.  

This trend of ratcheting opinion is being mirrored across the news business. The Economist last week published a piece (shared in this newsletter) looking at the future of neutrality in news.  

“A new generation of journalists is questioning whether, in a hyper-partisan, digital world, objectivity is even desirable. “American view-from-nowhere, ‘objectivity’-obsessed, both-sides journalism is a failed experiment,” tweeted Wesley Lowery, a Pulitzer-winning 30-year-old now at CBS News."

Pivoting to punditry – or at least news with a view - is becoming normalised for news outlets. This is driven by the same need as cable – to attract a dedicated, paying, loyal audience. No longer do newspapers need to attract a broad church to soak up as many ads as possible. Now all that matters is that they speak to a niche grouptweaking their interest, enraging and engaging them enough to get them to open their wallets and pay a subscription.  

The future of cable news will accentuate current trends. There will be further emphasis on opinion to build an identity around a channel’s brand. They just increasingly won’t be doing it on television. Eventually all outlets – newspapers, magazines, cable channels - will converge online. Different media types will bleed into one another, with newspapers doing video, cable channels doing the written word. Consumers of a conservative magazine will be up for grabs by conservative cable channels and vice versa. 

This move online will allow cable channels to build more direct relationships with their viewers, shirking free from the control of the large cable networks. Fox Nation, a streaming service from Fox, has a reported 200-300,000 subscribers, where they provide a steady stream of opinion shows and lifestyle pieces. MSNBC may be folded into their parent streaming service, Peacock, in time.  

There is also vacated space from this polarisation. Public service broadcasters, who are typically bound to ‘unbiased’ editorialising, may find they become the only purveyors of more-balanced news. This will allow them to distinguish themselves from the existing competition. Viewers who have a distaste for overtly political broadcasting will become allies, helping with fundraising and providing public support when vexatious negotiations happen around funding, as the BBC must do with the government every ten years.  

Cable news is getting more opinionated. Other news providers are often quick to criticise this trend. But then, ever so quietly, many are copying them. News brands are choosing punditry over Pulitzers to survive.  

Cinematic ShiftsLeft Reeling

Films used to tour. Reels were expensive, so a film would open in the States then ship globally. Piracy concerns and digital technology cut back this window. Simultaneous global releasing became the norm for blockbusters. Now the pandemic is tilting the balance further towards international releases. The continued shuttering of cinemas across the US means major blockbuster films like Tenet may open internationally first, before eventually wangling their way to the US. This will increase pirating opportunity, hitting US attendance. Meanwhile, the window between cinematic release and films hitting on-demand services is being eroded. AMC Cinemas and Universal recently agreed to reduce the window to just 17 days, down from 70-90 - though the cinema chain will get a cut of these early –premium rentals. Horror movies proved to be hits in 2020. For US cinema, the scares are real.  

Disney Results

Disney has reported 60.5m subscribers to Disney+ in their latest earnings, hitting their 60m-90m target four years early. Netflix has 183m. Less healthy is Disney’s Parks and Cruises segment, down 85% in revenue over the year.

News and Notes

💰💻‘He was banned from the financial industry. So he built a financial media empire.’ Profile of Henry Blodget

🌍🕛Google at middle-age. They just suffered their first-ever revenue decline. Now The Economist asks where Alphabet goes from here. “Letting a thousand flowers bloom is leading to an awful lot of compost.” 

📱 Did the Facebook-ad boycott work? The NYTimes investigates. Spoiler: not really. As Zuckerberg said on an earnings calls last week: “Some seem to wrongly assume that our business is dependent on a few large advertisers.”