Inside Cable TV’s Decline Amid the Rise of Streming & Cord-Cutting


Earlier this yr, folks began noticing one thing peculiar about MTV’s schedule: The community had quietly morphed into an nearly 24/7 providing of only one present. At one level in late June, “Ridiculousness” — a half-hour viral video-clip present hosted by famed skateboarder Rob Dyrdek — aired for 113 hours out of the community’s whole 168-hour lineup. Many took it as an indication that MTV, a pioneering power in actuality tv that only some years in the past had additionally made main investments in authentic scripted programming, had simply given up.

Pundits had lengthy predicted the loss of life of broadcast TV, whereas primary cable feasted on a twin income stream of subscriber charges and promoting income. However that gravy practice began going off the rails when the streaming companies arrived. At first, Netflix was a buddy, supplying one more supply of income and even appearing as a advertising and marketing instrument — serving to to show AMC’s “Breaking Unhealthy” right into a a lot greater hit throughout its ultimate season of originals on AMC, for instance.

However as AMC quickly discovered, customers started pondering of “Breaking Unhealthy” as a Netflix present — and Netflix was utilizing acquired library content material to rapidly change viewer habits. Final yr, the streamer launched extra authentic programming than the whole cable TV {industry} had a decade earlier.

In the meantime, “twine chopping,” as soon as pooh-poohed by the cable {industry} as a fantasy, has grow to be an actual menace: The quantity of pay-TV households peaked in 2010 at 105 million; now it’s right down to roughly 82.9 million. And a research final yr by eMarketer forecast that quantity to dip to 72.7 million by 2023. Now, it’s cable that’s on the ropes — and struggling for survival.

“I feel it’s 10 years, and there’ll be a complete change of the guard,” says former DirecTV/AT&T Viewers Community programming chief Chris Lengthy, who’s now a producer. “In some unspecified time in the future, folks will make that call of ‘I can get all the things I need [in streaming]. I not must have 180 channels that I solely watch 12 of.”

Whereas a handful of life-style and older-skewing networks have managed to buck industry-wide declines, most basic leisure channels have suffered double-digit drops in scores lately. Based on Selection’s tally of the most-watched networks in 2019, Nick at Nite was down 24% amongst complete viewers; AMC, down 22%; FX, down 21%; USA, down 19%; TBS, down 16%; and TNT, down 14%.

Till not too long ago, it was cable that drove a lot of the leisure {industry}’s backside line. These networks printed money for the conglomerates, which is why the father or mother corporations had been so keen to construct up their suite of channels. When Disney purchased ABC in 1995, ESPN was the huge prize. By 2001, cable distribution was so precious that Disney paid a whopping $5.three billion for the Fox Household Channel — rebranded first as ABC Household and now generally known as Freeform. When Viacom and CBS cut up in 2006, Viacom was seen as the higher guess as a result of of its channels.

Cable paid high greenback for film packages and off-network broadcast reveals, additional enriching the ecosystem. As the money grew, cable might afford dear sports activities rights and authentic collection, giving channels causes to extend their subscriber charges. It was a development cycle with no restrict. Or so it appeared.

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Lola Dupre for Selection

However even earlier than the disruption of streaming, indicators of hassle emerged. Distribution hit a wall as the home buyer base was tapped out. That led to extra clashes between multichannel video programming distributors (aka cable and satellite tv for pc suppliers) and media conglomerates determined to make up for losses by jacking up (and even holding regular on) these subscriber charges.

As the MVPDs and leisure corporations battled, they had been distracted from arising with a plan to combat the imminent OTT menace: First from Netflix, then from Amazon and now even from Apple. And so the declines proceed — to what stage, nobody is kind of positive.

“The place’s the future? The place are we going?” asks Mark Stern, the former president of authentic content material at Syfy. “I feel that the place we’re headed is clearly into this on-demand, nonlinear area.”

Provides Henry Schleiff, group president of Discovery’s Journey Channel, Investigation Discovery, American Heroes Channel and Vacation spot America: “I feel [cable pioneer] John Malone’s preliminary dream again in the ’80s of a 500-channel universe, which we’ve lengthy surpassed, has already come and gone. It was an important dream and an exquisite place to reside in. I feel the consolidation you’re seeing now’s what you’ll see in the future.

The decline of cable isn’t a brand new story, however what has began to take maintain is a change in narrative inside the {industry}. Fairly than attempt to prop up what all of them know to be a decaying linear enterprise, cable executives are as an alternative specializing in their still-healthy mental properties and the manufacturers behind them.

Some of these cable manufacturers are even aiming to carve out an area in the streaming world, like FX on Hulu, Nationwide Geographic on Disney Plus and the Turner staff’s involvement in HBO Max.

“You’re simply doing all the things you may to run in place as a primary cable community,” says FX Networks CEO John Landgraf, explaining why creating an FX on Hulu portal, which incorporates authentic programming not aired on the linear channel, is critical to develop the FX model. “It permits us to keep up — even enhance slightly bit — our funding in our programming for our linear channels … however the place all the development from funding in the tv {industry} is, is in streaming.”

Then there’s ViacomCBS, which has mainly been telling folks to cease pondering of it as a group of channels and as an alternative deal with the firm as the steward of a large 123 of packages and IP. “I feel increasingly more we have a look at every of these manufacturers as content material factories, as makers of content material for a selected group or demographic or psychographic group that exists past the cable channel,” says CBS chief artistic officer/Showtime Networks chairman and CEO David Nevins.

For all this hand-wringing over the loss of life of cable, former Fox and WGN exec Peter Liguori says there’s not any such factor as a typical linear cable channel — and that’s positive: The enterprise has already developed. “As OTT takes over, you see how the nice cable networks, the FXs and HBOs of the world, nonetheless preserve their manufacturers, however are very a lot content material creators greater than they’re essentially simply the outdated networks.”

That leads us again to MTV and “Ridiculousness.” When requested about the program’s wall-to-wall scheduling, execs there say we’re lacking the level: The linear community is only a single sliver of their enterprise, as MTV fare is perhaps discovered on Fb Watch (like a “Actual World” reboot), or Quibi (“Punk’d” and “Singled Out” reboots), or Pluto TV (which options a number of MTV-branded channels). Most not too long ago, ViacomCBS introduced a revival of MTV’s “Beavis and Butt-Head” that may run on Comedy Central.

“We proceed to suppose of cable as only one piece of our ecosystem,” says Tanya Giles, the basic supervisor of ViacomCBS’ leisure & youth group. In relation to discovering an viewers for old-school MTV, significantly throughout the pandemic, Giles says “Ridiculousness” grew the community’s frequency and time spent viewing the extra it was added to the schedule. “We went from folks coming one to 2 instances per week to just about six instances per week to look at ‘Ridiculousness’.… Significantly when COVID hit, now there’s lots of folks at dwelling. We knew that this was a present that many generations might watch. It minimize throughout totally different genders; it’s snigger out loud; it’s escapist.”

Though to not the excessive of “Ridiculousness,” MTV isn’t the solely community to now depend on a gradual binge of a handful of repeatable reveals to maintain the lights on. That’s led some to marvel if cable TV has already changed into a group of “barker networks” — like these channels you discover in a lodge room, selling their choices on a loop.

At its top throughout the 2000s, primary cable is the place the leisure giants had been pouring their cash, and the buzziest successes got here from broad leisure networks — USA, TNT, FX and AMC — which provided scripted originals that in high quality bested most reveals on the broadcast networks and rivaled these on HBO and Showtime.

Certainly, it wasn’t that way back that AMC’s “The Strolling Useless” blew away something on broadcast or cable, in 2015 averaging a whopping 13.2 ranking amongst adults 18-49. And even now, Jerry Leo, who oversaw programming technique at Bravo and Oxygen till final yr, cites the scores success of ESPN’s “The Final Dance” and Paramount Community’s “Yellowstone” and TLC’s 2020 scores dominance (due to “90 Day Fiancé” and its a number of spinoffs) as proof that cable TV can nonetheless draw audiences.

Lauren Zalaznick, the former NBC Common chairman who ran a number of of the firm’s cable channels and its digital networks, says, “Somebody needs to be defending this lovely, money-making, not-growing space of the enterprise.”

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Legislation & Order: Particular Victims Unit: Virgina Sherwood/NBC; Fits: Watson/USA Community; TV Plugs: Maxim Sergeenkov/Alamy Inventory Picture

Zalaznick thinks it could be silly for the content material corporations to desert their once-vaunted cable channels solely in pursuit of the elusive streaming dragon.

“It appears ugly and messy and never totally baked to chase one thing a lot smaller with just one income stream,” she says. “Advertisers nonetheless must promote! Do you need to put your self in the place that newspapers discovered themselves, with no promoting and hardly any subscribers? What sign do you need to ship your clients if you happen to utterly defund and make unattractive the place you get half your cash?”

Van Toffler — who ran MTV for years, and till 2015 was the president of Viacom Media Networks — is conversant in cable channels being counted out. “Individuals stated MTV was useless each three years. After which we’d have ‘Beavis and Butt-Head’ or ‘The Osbournes’ or ‘Jackass’ or ‘Punk’d,’” Toffler says.

However lots has modified since then. And now comes COVID-19 and additional uncertainty about the place that places linear TV. Leo thinks the coronavirus-triggered manufacturing shutdown, in addition to the financial affect of the recession, will probably be profound. “The entire playbook has utterly modified since the pandemic,” he says.

These monetary pressures will, Leo posits, put the cable networks that had been capable of produce new reveals throughout quarantine — TLC, Meals Community — in even stronger positions. “They’ve this machine that appears fairly unstoppable proper now; to be surging this a lot on this cluttered surroundings is outstanding,” he says.

Paradoxically, throughout cable’s top, area of interest channels with out scripted reveals — corresponding to Meals Community and HGTV — had been out of favor. However now, the extra particular, the higher, Stern says: “I feel an enormous piece of that is, do you may have a model that’s distinct?”

Meals Community, for example, noticed scores spike throughout the coronavirus quarantines and has been drawing its largest audiences in years. “We’re in higher form than scripted,” says community president Courtney White, “and I additionally suppose we’re in higher form having such a well-defined model and a really particular swim lane of meals.”

Stern sees primary cable as retrenching and returning to its ’80s origins — “type of area of interest, combating for viewers and attempting to determine the place it matches,” he says. “Lots of primary cable goes to mainly return to the place it began, which is lower-cost programming — unscripted programming.”

Actually, that has already occurred: In a last-ditch effort to extend their subscription charges in the mid-2010s, a number of networks entered the scripted world, solely to depart it once more at the finish of the decade: MTV, Discovery, Bravo, WGN America, A&E and E! Leisure had been amongst the networks that spent closely on drama and comedy collection earlier than figuring out the funding wasn’t value it. In the case of WGN and Pop TV, one other community that’s exiting the originals sport, each earned raves for his or her transient dip into the waters of status TV — however mockingly their reveals weren’t seen till viewers discovered them on streaming platforms.

“Clearly, the rise of the streamers is a big issue on this,” Stern continues, “however even earlier than that, there was a lot content material on the market that combating to get eyeballs to your content material was already beginning to be a wrestle.”

The studios’ enterprise mannequin, during which they’d revenue not solely from home license charges however from DVD gross sales, worldwide gross sales and, ultimately, syndication — the complete of which added as much as an extremely profitable enterprise — has principally evaporated, compounding the financial pressures of scripted programming on cable.

As soon as upon a time cable channels had been so essential to media corporations’ portfolios that corporations would spend vital advertising and marketing {dollars} not solely to advertise reveals but in addition to carve out clear-cut branding for every community. TNT’s tagline was “We all know drama”; TBS’ was “Very humorous” — viewers, in addition to advertisers, obtained the distinction between their two philosophies instantly. Executives inside bigger company constructions had been groups of rivals, competing with each other for the finest scripted fare.

These days seem like gone. At WarnerMedia, “Snowpiercer” was developed for TNT, then moved to TBS earlier than heading again to TNT; over at Viacom, “Youthful” hopped from TV Land to Paramount Community, then again to TV Land. “Killing Eve,” a BBC America present, has aired its premiere episodes each there and on AMC for the previous two seasons. It’s a method that definitely has elevated the present’s scores and publicity — however at the expense of eroding each channels’ manufacturers, as soon as constructed to be distinct.

Nonetheless, some consider that is only a precursor to additional consolidation: As soon as cable and satellite tv for pc operators balk at so many alternative channels in the market, they usually all share programming anyway, maybe extra channels will probably be trimmed till every conglomerate has only a handful.

Zalaznick wonders how a lot “poor customer support” at the cable and satellite tv for pc corporations have contributed to cable TV’s issues over the years. “What I additionally wish to always remember is that cable suppliers are regional monopolies, and monopolies can have crappy customer support,” she says.

Even Stern, the former Syfy government who now runs Echoverse, a scripted podcasting studio, usually considers chopping the twine. “I’ve obtained a DirecTV subscription,” he says. “However each month I have a look at that $150 invoice, and if my spouse wasn’t nonetheless watching reside Bravo reveals or no matter she’s watching, I don’t understand how lengthy I might grasp on to that.”

Younger viewers, and youngsters particularly, don’t suppose in phrases of channels anymore, and the super cratering of linear scores at Nickelodeon, Disney Channel and Cartoon Community bears that out. Viewers are nonetheless watching these networks’ reveals on streaming — after they’re not on YouTube or gaming platforms, of course. However the proven fact that Gen Z has no loyalty to cable in anyway — and has no endurance for commercials on TV — ought to sound a lot of alarm bells for anybody interested by the enterprise long run.

“They’re not even turning to their TV as the focus after they go wandering,” Toffler says. “They choose the content material, the present they need, after which they binge-watch it. So I don’t see life getting any simpler for linear cable networks.”

There’s a large portion of the viewers (albeit, growing older) that may maintain on to cable as a result of they nonetheless see it as a utility. Some pundits consider that cable penetration will backside out at round 30 million households — nonetheless a enterprise, however not one with sufficient attain to justify dear expenditures like sports activities.

“Increasingly we have a look at manufacturers as content material factories for a selected group or demographic or psychographic group.”
David Nevins, CBS chief artistic officer; chairman & CEO, Showtime Networks

Finally, the conglomerates with sports activities rights will both have to incorporate a streaming part (including NBA to HBO Max or NFL to Disney Plus, for instance), or danger shedding exclusivity as main leagues look to promote these streaming rights to a 3rd celebration corresponding to Google or Fb.

In the meantime, as they place their bets on their new OTT platforms — together with the latest launches of Disney Plus, HBO Max and Peacock — the leisure companies are hoping to straddle a rising precipice over the subsequent a number of years, preserving one foot in the outdated media whereas inserting extra of their funding in the new.

Based on media analysis analysts LightShed Companions, WarnerMedia is spending between $four billion and $5 billion on content material this yr for HBO Max (a minimum of half of that on originals), whereas Disney has a $2 billion to $three billion focused for Disney Plus, with half of that going to new reveals. Comcast is believed to be committing $2 billion to Peacock in its first two years as nicely. (These are all pre-COVID projections; the pandemic will possible change some of these plans.)

Disney Plus launched with spectacular subscriber numbers — having, as of Could, racked up 54.5 million subs, in response to the conglom. However the jury’s nonetheless out on the long-term well being of the streaming behemoths.

Netflix has began usually canceling reveals because it begins to pay extra consideration to economics after years of seemingly limitless budgets. In addition to an ever-increasing debt load (not unusual for media corporations), it has billions in off-balance-sheet content-spending obligations, most of that are due quickly. Whether or not the firm, which has financed its ascent to dominance by accruing billions in debt, is overly leveraged is a query. However at the finish of March, Netflix introduced it had an astounding 182.9 million paid international subscribers for its first quarter, and added 10 million extra in the second quarter.

But though audiences have embraced the streaming age, it doesn’t imply they’re hungry to eat all that new content material: Based on a latest YouGov survey supplied to Selection Intelligence Platform, solely 15% of respondents stated they’d be keen on watching a brand new present on HBO Max, and simply 6% stated they’d watch one on Peacock.

However Netflix’s rise has pressured all of its rivals to vary radically. Toffler cites the instance of “Mates” as a present that traveled from NBC, to broadcast and cable syndication, to Netflix and now to HBO Max as the cornerstone of the WarnerMedia service: “When you have a frictionless shopper expertise supplied by expertise that means that you can watch as many episodes as you need of ‘Mates’ — whichever season or episode, with none commercials — after which you may have ‘Mates’ in syndication, what’s the preferable expertise?”

One other former top-level cable exec admits he doesn’t see how the enterprise can extricate itself from this predicament. “It’s going away in some unspecified time in the future,” he says. “Not tomorrow, as a result of they’re managing it very nicely. They now have lots of nice, good bean-counter-y varieties operating all these corporations. They’re managing their decline, however make no mistake about it, it’s a decline. It feels irreversible.”


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