Cable News Nightmare: Turn Off, Tune Out
There's supposed to be an ancient Chinese curse: "May you live in interesting times." Even if it's not ancient or Chinese, it captures a certain truth. World War II was riveting. The Black Death was so fascinating that no one could talk about anything else. On the other hand, GDP growing 3.5% and everyone raising contented families in spacious, airy homes with swell schools? Yawn.
In the news business, "interesting times" are ratings gold. I can't tell you how many times I heard reporters covering the financial crisis, including myself, make essentially the same wry observation: "Bad for America, job security for us!"
That, says Ezra Klein, is the primary problem with the cable news industry right now: Nothing's happening. The job market could be better, but it's no longer in "stockpile canned goods and ammunition" mode. America is not fighting any wars of note, and we can't seem to work up any interest in some far away squabble over islands we've never heard of. Our stalemated Congress probably couldn't even pass a resolution to declare June 31st National Hug a Tree Day.
Surely, this is part of the equation. But 2014 was not entirely without interest: We had protests in Ferguson and beyond, followed by a midterm election that produced a landslide for the Republican Party. Ratings still fell sharply from the previous year.
So what else could explain the shift? Let's start with the fact that cable audiences seem to be slowly but surely falling, particularly among younger viewers. There are sometimes quarterly gains, but overall, the trend is down. Fewer cable consumers means a smaller pool who might tune in CNN, MSNBC or Fox News.
People also have wildly more news sources than ever before. During the Rodney King riots on CNN 20 years ago, my whole dorm was glued to the television, because cable news was the only place you could find out what was happening in LA. During the Baltimore riots over the past month, I watched some cable, like many of you. (We boosted their ratings quite a bit.) But I could also listen to the Baltimore police scanner streaming online, get live tweets from people who were there, and read the live updates from the Baltimore Sun, which made its coverage available free. These sources told me more of what was happening, much more quickly, than cable news did; on the TV was yet another anchor remarking that people in Baltimore seemed very angry. I did watch a lot of footage of the riots that came from cable television cameras -- but I watched much of it in streaming snippets, not from tuning into the television. When I did that, I did not watch any of their ads or help their ratings. This is a broad problem afflicting more than just the three major cable news networks: When was the last time you turned on the Weather Channel to find out whether it was going to rain today?
And then there's the change in the way that people watch television. People are becoming more intentional in their viewing; instead of turning on the television to see what's on, or planning their lives around being home on Sunday evenings at 8, they are seeking out exactly the content they want, at a time that is convenient for them. That means fewer people idly flipping through the channels. That means fewer people deciding to stop a minute to see what the talking heads have to say.
As Paul Farhi argues in the Washington Post, I think it's going to get worse.
We've heard a lot about the threat from cord-cutters, and obviously that will be a big problem for cable news if the trend continues. But a potentially even bigger threat is the "slim bundles" that a lot of firms are looking to offer. If this strategy survives the inevitable lawsuits, the news channels should be very nervous. For many people, cable news is something they watch because it's there. How many consumers would pay to add it to their cable package when the marginal cost becomes an explicit part of their bill, rather than a nonnegotiable small factor in a big bundle? (Even the relatively resilient Fox News is down.)
We also shouldn't forget the other side of this two-sided market: advertising. Last year was soft for TV ads, despite the economic recovery, and 2015 looks like it may be a bit spongy as well. But companies are finding that they have more alternatives for their ad dollars than they used to, and between declining audience and worsening demographics on the television networks, they're increasingly choosing to use them. Cable news could eventually find itself in the same boat as newspapers, where competition from other media shrinks the audience audience, which eats into the ad dollars, which hurts the quality of the product and/or raises the cost to consumers, which shrinks the audience further, which makes the ad dollars decline further.... This is the nightmare that should keep network executives, and those of us who like having a 24/7 news channel, awake at night.
The current malaise at cable news is far from fatal. But it may be the first worrying sign of something more serious. Which makes me suspect that cable news is about to go through some very interesting times.
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
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