The cable news landscape is facing a looming existential crisis as the number of cable subscribers continues to plummet. This record-breaking plunge in viewership is bound to have a significant impact on the bottom line of news channels.
For instance, the recent highly publicized CNN town hall with Donald Trump serves as a clear indicator of the troubles ahead for cable news, drawing only 3.3 million viewers. This number pales in comparison to the viewership of other television programs, such as “Celebrity Wheel of Fortune” on ABC.
The dwindling influence and troubled business model of cable news can be attributed to the declining number of cable or satellite TV subscriptions.
In 2016, during the narrow election of Donald Trump, over 70 percent of households with a television had cable or satellite subscriptions. However, today that figure has dropped to under 40 percent, according to S&P Global Market Intelligence.
Moreover, during the first quarter of 2023, 2.3 million customers, constituting 7 percent of the total, chose to cut the cord to traditional cable, marking the fastest cancelation pace ever recorded by MoffettNathanson, a research firm.
These trends indicate that the number of homes receiving TV via cable is now comparable to levels seen in 1992 when the industry was still on the rise.
Cable news channels are facing this crisis because they are heavily reliant on the medium of cable television, which is rapidly declining. Alan Wolk, a veteran advertising executive and media consultant, stated that “cable news is dying” not because it has become irrelevant, but because its platform, cable TV, is dying. Wolk predicts that cable could essentially disappear within the next decade.
USA Network, once the most popular cable channel, has lost 75 percent of its nightly audience over 10 years.
FX is down 68 percent. History Channel is off by 65 percent.
Cable news channels have historically wielded significant influence and shaped the political landscape. Networks like CNN, Fox News, and MSNBC played instrumental roles in various political events and campaigns. However, recent events, such as CNN’s Trump town hall, have failed to make a substantial impact. Michael Socolow, a professor and media historian, dismissed the telecast as “completely meaningless” as a political event, with no significant effect on opinion polls.
Despite the declining influence of cable news, the major networks remain profitable due to the economic dynamics of the larger cable industry. The financial foundation of cable news lies not in advertising but in the license fees paid by cable system operators for the right to carry these networks. Last year, the six biggest cable news networks collected over $4 billion in licensing fees, while advertisers contributed an additional $2.6 billion.
However, the exodus of cable subscribers could jeopardize the financial viability of these news networks. If cable operators are unable to afford the hefty license fees commanded by these news programmers, a significant shift in the industry’s landscape is inevitable.
To adapt to the changing media landscape and the rise of cord-cutters, cable news networks have embraced digital technologies, such as streaming apps, YouTube channels, podcasts, and social media platforms. Yet, none of these digital platforms have come close to matching the popularity and profitability of traditional cable news.
While Fox Corporation’s chief financial officer has hinted at the possibility of moving programming onto a streaming channel like Fox Nation, the current subscriber base of streaming platforms falls significantly short of cable’s financial prowess.
News channels face particular challenges when transitioning from cable to streaming. The median age of cable news viewers is in their 60s, a demographic that is typically resistant to adopting new technologies. Although news channels may license their programming to established streamers, the economics of streaming are not as favorable as traditional cable news.
For now, cable news networks continue to thrive due to license fees and advertisements, while retaining a relatively loyal viewership. However, signs of trouble are evident in the broader cable landscape.
Over the past decade, other cable channels have experienced a significant decline in viewership, as younger audiences abandon cable altogether. Channels like USA Network, FX, and History Channel have seen their nightly audience numbers plummet by significant percentages, signaling the fragmentation of the mass audience and the splintering of shared culture.
The future of cable news and the broader media landscape suggests a continued trend of “narrowcasting.” With the proliferation of digital platforms, there is a niche for every taste and political ideology. This fragmentation is likely to result in edgier content that caters to specific segments of the audience. However, these platforms may not be as financially lucrative as traditional cable news channels. As a result, Wolk predicts that the days of news anchors commanding multimillion-dollar salaries will come to an end in this evolving media landscape.
Despite the challenges, cable news networks are making efforts to adapt and reach cord-cutters. Many have ventured into streaming platforms, launching apps, YouTube channels, and podcasts to engage audiences. Fox Corporation’s Fox News has its streaming subscription platform, Fox Nation, while CNN made a well-publicized but ultimately unsuccessful foray into streaming with CNN Plus. However, these endeavors have yet to match the popularity and profitability of cable news.
One of the significant hurdles in the transition from cable to streaming is the demographic divide. The median age of cable news viewers skews older, making it difficult for news channels to capture the younger, tech-savvy audience that dominates the streaming landscape. As the media industry continues to evolve, finding innovative ways to bridge this demographic gap will be crucial for the future of news consumption.
While cable news channels may currently enjoy financial stability, the writing is on the wall. The decline in cable subscribers and the shift towards streaming platforms indicate an uncertain future for the traditional cable news model. The industry must navigate the challenges posed by changing viewer preferences and technological advancements. Adapting to the digital era and finding innovative ways to deliver news and engage audiences will be essential for cable news networks to remain relevant and sustainable in the long run.
In conclusion, the cable news landscape is facing a daunting existential crisis as cable subscribership continues to decline at an alarming rate. Cable news channels are grappling with the diminishing influence of cable television, which serves as their primary platform. The rise of cord-cutters and the emergence of streaming platforms have disrupted the traditional cable news model, forcing networks to explore new avenues of content distribution. However, challenges such as the demographic divide and the economic viability of streaming platforms pose significant hurdles for the industry.
As the media landscape undergoes a transformative shift, cable news networks must adapt and innovate to ensure their relevance in an evolving digital era.