At the dawn of the Cable News Network, back in 1980, founder Ted Turner had his team film a military band’s rendition of Nearer, My God, to Thee. The hymn, also played as the Titanic was swallowed up by the Atlantic Ocean, was to be the last thing CNN aired in the event of the end of the world.
Some insiders sounded about ready to dig the doomsday tape out of the vault this week as Chris Licht’s run as the network’s chief executive came to an abrupt end. Since the publication of a withering profile in The Atlantic, CNN has been portrayed as a network consumed by a crisis of morale, with little clue about its future.
CNN’s travails have been debated with an intensity reminiscent of the dissection of Fox News’ recent firing of star host Tucker Carlson. Did it tack too far to the left during Donald Trump’s presidency? Had it stood too riskily in the middle of the road since then?
These questions miss a bigger commercial point. The cable news era that Turner launched is drawing to a close. And while the cultural and political consequences of that fact consume public attention, this is also a story about the demise of one of media’s great business models.
The most troubling feature of Licht’s 13-month reign was not his decision to interview Trump in front of an audience of jeering supporters. It was that CNN’s average prime-time audience fell to just 535,000 in the first quarter, down from 1.7mn in 2020. CNN trails long-time rivals Fox and MSNBC and sometimes even Newsmax, a scrappy partisan challenger with a fraction of its budget.
Shrinking audiences are not unique to CNN, nor to the US. Pay-TV audiences are getting smaller, and older. This has been true for a while, but in commercial terms it barely mattered: through the magic of retransmission fees, in which distributors pay content owners to air their channels, revenues and profits held up.
CNN’s annual revenues doubled to $2bn in the decade to the 2020 US election, and it made roughly $1bn in profits every year of the Trump presidency, according to the New York Times.
That tide has turned, with revenues falling below $1.8bn. With annual profits still a reported $750mn last year, the business is not falling off a cliff but, as Warner Bros’ Wile E Coyote could tell you, gravity exerts itself eventually.
News and sports channels were supposed to be the features that persuaded viewers to keep their cable subscriptions, giving their owners negotiating power with distributors. But more subscriptions are being cancelled and media owners have failed to replicate that model online or on streaming platforms.
The old model has been so lucrative that cable news operators have had little incentive to establish themselves as big brands in digital news, allowing others from legacy newspapers to brash podcast hosts to take the lead. It may be too late for them to catch up now.
When the first 24-hour channels launched, they filled a clear gap in the news market. Whatever Licht’s successors do, they are unlikely to repeat that trick.
Journalistically, it’s not the end of the world. But the end is in sight for a news media business model that will not be replaced by anything nearly as lucrative.
