Cable system carriage fees are a key source of revenue.
Thanks, Rockingham. Yes, you’re right. It is indeed a mixed bag. Cable system carriage fees are huge, and it’s directly linked to consumer demand for certain stations.
There’s also an international dimension. My wife gets the NHK broadcast from Japan. And on the news programs, I’ve noticed they usually lead an American politics story with a short clip from our Lamestream media — and it’s almost always ABC News.
And that makes sense because Disney has a strong presence in Japan’s entertainment scene. Unless it’s a huge news story, NHK broadcasts the story two days later, probably because the rights to broadcast are prohibitively high to show it the next day.
CNN is the only American news broadcast station shown on national TV in many countries. And I wouldn’t be surprised if CNN works its film assets from Warner Media the same way as Disney. And now that CNN is owned by AT&T, there are all sorts of telecom contract deals and satellite links they can offer.
One key benefit of the Trump rallies is that a foreign news network can get cheap access to an exciting event that’s a natural human interest story. Maybe an outlet like Right Side Broadcasting Network can make some extra money providing those clips to foreign outlets. In fact the Trump rallies are a key way people in foreign nations get a glimpse of what average working people in America think.
It allows them to see behind the Silicon Curtain and Great Wall of Lies put up by the CNNs.
I think an inside look at how the media business really works is a best selling MAGA book in the making. There are commercial reasons why big media flock together to maintain the status quo and squelch the forces of freedom and truth.
CNN’s economic model depends on carriage fees and advertising. Carriage fees from cable are declining as people cut the cord but that loss is offset if cord cutters subscribe to a streaming service carrying bundled channels such ad Hulu, Sling, YouTube or DirectTv’s streaming service.
Advertising revenue depends on ratings. As ratings decline, advertising revenue declines. As ratings rise, advertising revenue rises.
Truly free markets are efficient. They are characterized by numerous competitors engaged in aggressive competition which lowers prices and drives the innovation required to gain a competitive edge. In colonial and early US the news business was highly competitive. Even small towns had multiple, independently owned newspapers. Government regulation was nonexistent and cost of entry was low.
Today the news business is controlled by oligopolies allied with big government. The cost of entry is high, parts of the business are regulated by government, and the oligarchs keep new competition out by excluding new entrants from carriage bundles. No doubt if some of the new conservative networks (OANN, Blaze, and Newsmax) were included in the same cable and streaming bundles where CNN, MSNBC, and Fox are carried, the upstarts would be growing rapidly at the expense of the older news networks. More competition would force CNN to adjust its programming either going farther left or shifting to the middle.
The solution is the same as it was over 100 years ago. Use antitrust legislation to break up the cartels to increase the number of competitors. Comcast, ATT, News Corp, Disney, CBS/Viacom, Google, Amazon, the big newspaper chains, should each be broken up into dozens of companies which will have to compete aggressively to grow and survive.
Permitting consumers to buy all channels independently, instead of having to buy bundles of channels they don’t want, would also be a huge move toward a more free and competitive media market. CNN would see a significant drop in its carriage revenue if consumers could buy all cable channel a la carte instead of in bundles. OANN would experience rapid growth.
Making America great again requires the energy and innovation of free markets. It is past time to break up the mega corporations and “too big to fail” banks. Hopefully Trump in a second term will wear the trust busting hat of Teddy Roosevelt.
One additional benefit of having dozens, or even hundreds of competing businesses in an industry — more jobs. Corporate mergers and consolidations almost always result in job losses for the middle class.