Cable

Cable

Media execs across the nation are coming to grips with the continued erosion of traditional cable TV demand.

A subdued consensus is emerging that there will be an expected decline of 25 million U.S. households over the next five years That’s on top of the 25 million homes that have already cut the cord since 2012.  

At least three major media companies now expect pay-TV subscriptions to stabilize around 50 million, according to people familiar with the matter, who spoke under condition of anonymity to CNBC.

The projected decline in subscribers will mean a drop of about $25 billion in cable subscription revenue plus associated advertising losses for the largest U.S. media companies, including DisneyComcast’s NBCUniversal, AT&T’s, WarnerMedia, ViacomCBSFoxDiscoverySinclair and AMC Networks.

This assumption has created a seismic shift in the media industry. In the last three months, Disney, 

NBCUniversalWarnerMedia and ViacomCBS have all announced major reorganizations. They’ve replaced old leaders, consolidated divisions, laid off tens of thousands of employees, and pivoted to streaming video.

TODD SMITH

TODD SMITH

American viewers can now choose among streaming services from most of the major players, including Disney+, WarnerMedia’s HBO Max, NBCUniversal’s Peacock, ViacomCBS’s Paramount+, Discovery+ and AMC+, at prices ranging from free to $15 month. All have launched in the last year or are coming in early 2021.

The plan is simple enough: hope enough people sign up for subscription streaming services to make up for cable TV subscriber losses.

 

Why Streaming Might Not Save U.S. Media

In 2015, Time Warner CEO Jeff Bewkes sat down with his executive team to talk about the future of TNT and TBS, the two flagship Turner entertainment cable networks. 

For more than a decade, TNT and TBS ratings had lived off re-runs of hit broadcast shows -- “Seinfeld,” “Friends,” “Family Guy,” “The Office” and others. Now there was a problem. Netflix, Hulu and Amazon Prime Video had acquired digital rights to the same catalog of re-runs. Instead of having to tune into a cable network at a certain time, viewers could consume entire seasons of shows on demand without suffering through commercial interruptions.

Meanwhile, media companies are shifting their best content to their new streaming services. The result for consumers is higher and higher prices for lower and lower quality, according to CNBC.

And certain networks, like ESPN, which keep millions of Americans hooked to cable today, may need to pull back on programming costs if too many people cancel. That will only cause more people to cancel. Stabilizing at 50 million (or 55-60 million, as AT&T CEO John Stankey said recently) may be a pipe dream.

Cable networks continue to be profitable, and recent distribution deals ensure they’re not going anywhere.

Still, some companies probably won’t make it in a streaming world alone. They may need to merge to survive, according to CNBC.

 

Daily Newspapers Vanishing in Salt Lake City

The two newspapers serving Salt Lake City and other parts of Utah have announced that they will switch from daily to once-a-week print editions early in 2021.

At the same time, executives of The Salt Lake Tribune and Deseret News said that their joint operating agreement, set to expire at the end of 2020, will not be renewed, according to The Poynter Institute.

The agreement allowed the two to share printing and other business functions while keeping distinct news and editorial operations. Each will now need to bring that work back in-house, according to Poynter. 

Part of the transition will be to close a printing facility, which Deseret owns, that currently serves both papers. That will mean the loss of 161 jobs, the company said.

Deseret is also laying off 18 other employees, including six journalists, according to Poynter. The Tribune said it will retain all the journalists in its newsroom, about 65. 

Each of the two papers has an unusual ownership structure, and their transitions to a new business model will diverge.

The Tribune, long the state’s secular paper, was bought by Paul Huntsman, a member of a wealthy and politically prominent Utah family, in 2016. He remains publisher and a leading funder, but control is passing this fall to a new nine-member board of directors. 

The Tribune’s Sunday print product will be delivered by mail on the weekend, interim editor David Noyce wrote in an email to readers. It will include obituaries, contributions from all its columnists and many more features.

The Deseret News is owned by The Church of Jesus Christ of Latter-day Saints and is part of a huge media empire that includes a local TV station, a number of digital sites and other ventures like books.

The publication plans to consolidate its print report on the weekend like The Tribune with coverage of both the city and outlying parts of Utah, according to Poynter.

In addition, it announced plans to launch a monthly print magazine, aiming to offer a heartland view distinct from the dominant East Coast perspective.

Some Deseret sites explicitly target a national and international church audience or have an emphasis on faith and family values. That seems to be an element of the new monthly publication but not its identity.

Deseret’s various sites have been free. Partly as a result, its announcement Tuesday said, it has a digital audience 500 times larger than its print audience, with 70% of it coming from outside Utah. 

There are no current plans to transition to paid digital subscriptions. President and publisher Jeff Simpson wrote: “Yes, the Deseret News sites are still free. We are in a building mode, and our goal right now is to have our great journalism mean more to more people — so we are focused on growth at this point.”

The Tribune, by contrast, is seeking to build a base of paid digital subscriptions. It has a paywall currently set at seven free articles a month, with coverage of the coronavirus and some other topics free. The Tribune currently has about 15,000 paid digital subs, according to Poynter.

 

The News and Tribune join a small group of papers – Including the Tampa Bay Times (owned by Poynter) and The Arkansas Democrat-Gazette– that have cut print back this year. Most papers in the Advance Local group, owned by the Newhouse family, have done a version of the same over the last decade.

 

» TODD SMITH is co-founder, president and chief executive officer of Deane | Smith, a full-service branding, PR, marketing and advertising firm with offices in Jackson. The firm – based in Nashville, Tenn. – is also affiliated with Mad Genius. Contact him at todd@deanesmithpartners.com, follow him @spinsurgeon and like the ageny on Facebook at https://www.facebook.com/deanesmithpartners, and join us on LinkedIn  http://www.linkedin.com/company/deane-smith-&-partners

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