Move toward streaming sparks uncertainty in TV news business

Broadcast and cable news outlets are struggling to find a sturdy foothold on streaming as the media business goes through a transition from linear that is only expected to accelerate.

Big media conglomerates including Warner Bros. Discovery, Comcast, Disney and Paramount have largely failed to gain sustained profitability on streaming, even as they face a falling advertising market for broadcast TV and widespread cord-cutting.

Part of the struggle, experts and observers say, is a rise of news consumption through social media by younger people, many of whom are more likely than their older peers to subscribe to and use streaming services for entertainment and sports content.

And while some across the industry are not as gloomy about the traditional television advertising outlook, there are signs major TV news companies are steadily inching further into streaming.

“Streaming is a technology, not a business model,” said Michael Biard, a former executive at Fox Corp. who is now the COO of Nexstar Media Group, the largest provider of broadcast news in the country. Nexstar is the parent company of The Hill.

“For news, people typically are not satisfied or devoted to a single news source, so the future of television news will continue to be bundled in some fashion where people can get multiple sources in a single product that they buy,” Biard said.

Cable packages were a major cash cow for media companies over the last several decades, resulting in an explosion of political influence and advertising dollars around cable news.

Cable news ratings peaked during former President Trump’s first run for and term in the White House, when an estimated 70 percent of all households with a TV had a cable or satellite subscription, according to a recent analysis from The Washington Post, citing research from S&P Global.

But cord-cutting was already happening during the Trump presidency, and it has only increased. The number of households with a cable or satellite subscription is down to less than 40 percent today.

Warner Bros. Discovery (WBD), which owns CNN, has plans to launch a new 24-hour paid subscriber streaming news service this fall that will be available on Max.

The company shuttered its first attempt at subscriber-based streamed news in 2022 after it failed to gain traction with consumers at a sunk cost of more than $300 million.

Fox News and MSNBC require cable subscriptions to stream online through third-party apps but have yet to launch direct-to-consumer streamed news apps.

Comcast’s NBC and Paramount’s CBS have made big pushes into free ad-supported streamed news content and are planning more growth in the space.

Meanwhile Netflix, the most profitable streaming service, does not offer any live news content.

Biard said Nexstar, which also operates cable news channel NewsNation, is not planning to launch any direct-to-consumer streaming app for national news “anytime soon.”

How much to invest in streamed news remains an open question for many news companies.

“When you’re in the cable news business already, differentiating what the streaming customer is going to get for paying that extra money for streaming is important,” Mark Lukasiewicz, a former network executive and now dean of the Lawrence Herbert School of Communication at Hofstra University told The Hill as WBD was rolling out CNN+. “I’m not sure anybody has demonstrated in the news space what that is.”

Complicating matters for news providers is Big Tech’s entrance into the broader media ecosystem.

Huge investments by companies like Amazon and Apple on streamed sports and entertainment has put major pressure on legacy brands to compete for audience share and advertising dollars.

Many observers are expecting the trend to result in more mergers and acquisitions among legacy media companies.

How news content fits into this environment, and whether corporations can use news to turn a profit on streaming, remains unclear.

“We know that historically, consolidation in media has not always gone well for journalism,” said Patrick Ferrucci, an associate professor of journalism at the University of Colorado Boulder. “Cable and network news the way it’s currently structured does not seem to be a long-term [return on investment] for these larger media companies.”

If tech companies like Google, Amazon and Apple do make bigger pushes into the news business, it could pose not just financial problems for legacy broadcasters but could also raise major questions of objectivity and editorial control of the media.

“It’s inevitable that more tech giants are going to want to get into the news business,” predicted Anthony Adornato, an associate professor of broadcast and digital journalism at Syracuse University. “They already control so much of the information the public is getting, it presents them with a real opportunity to offer news that is beneficial to them using the influence they’ve already cultivated.”

As with live sports and entertainment offerings, experts and analysts say news broadcasters will need to keep subscription costs low if they want consumers to stream their shows rather than look to platforms like TikTok or X for coverage and commentary on current events.

A recent Deloitte study found the average household in the U.S. pays just more than $60 a month for four streaming services. The same study found a vast majority of Americans under the age of 50 were getting their news from social media and online influencers.

Nearly all major news brands do not publicize specific numbers on streaming, creating more uncertainty across the industry about the technology’s long-term sustainability.

“There’s not been a change in the need for news content, just a struggle on how to get people to pay for it,” said Mi-Ai Parrish, a professor of media innovation at Arizona State University’s Walter Cronkite school. “The tech companies in this space greatly exasperate this problem.”

And while some say ominous warnings about the death of linear news channels are either ahead of schedule or overblown, there is widespread agreement consumer habits are changing faster than ever.

How broadcasters shift audience to streaming and hold on to their influence is, as a result, one of the biggest questions facing the media business writ large.

“What happens to TV news at that point is really anyone’s guess,” Alan Wolk, a media adviser and critic, wrote in a recent blog post on his website that was highlighted in the Post’s analysis. “But it’s more than likely that it will not resemble the cable news ecosystem that ruled for the past three decades, the one that lived and died on Nielsen ratings.”

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