Fake News

Another strange week in the mediasphere. Comic Louis C.K. followed Kevin Spacey onto the celebrity scrap heap in a nearly shot-for-shot repeat of last week’s house of cards. Odder still, news leaked that the DOJ’s Antitrust Division had asked AT&T to divest CNN as a condition of its $85 billion acquisition of Time Warner. AT&T CEO Randall Stephenson (correctly) dismissed this notion as ridiculous and expressed his willingness to go to court to get the deal done. What really caught my attention about this story, however, was the antitrust angle. The idea that in 2017 CNN has market power (in the antitrust sense) with respect to the delivery of news is incredible, and it got me thinking about the news market and the future of TV.

Two thoughts here…

1. In The World of Video, Supply Has Overwhelmed Demand
In the old days, media companies were built around a single mode of distribution. Newspapers printed newspapers; radio stations delivered radio shows; and television stations broadcast TV shows. News existed across all of these media types but in very different forms, which largely complemented as much as they competed with one another. Growing up in the 1970s and 80s, I distinctly remember my dad reading the daily newspaper while listening to NPR or watching the local news on TV in the background. (In fact, I’m pretty sure he still does this).

As most readers know, this is no longer the case, especially when it comes to younger viewers, for whom the barriers between media types have largely collapsed (every news brand has an app), resulting in an explosion of news sources that all provide content online. Today, I can and do get news online from the New York Times (national newspaper), the Seattle Times (local newspaper), El Pais (Spanish newspaper), NPR (national public radio), KUOW (local public radio), CBS (broadcast TV), Kiro7 (local CBS affiliate in Seattle), CNN (cable news channel), Yahoo (online portal), Politico (niche site), Weather Channel (weather), ESPN (cable sports channel), Bleacher Report (sports website), Apple News (smartphone), Pod Save America (podcast), Facebook, or Twitter (social networks).

My news needs have honestly not changed that much. I’m still just one person and there’s only so much news I can or want to ingest on a daily basis. In other words, my demand for news (the ‘demand side’ of the equation) is largely static, while my supply of news (the ‘supply side’) has gone absolutely nuts.

It doesn’t take a PhD in economics to understand that the result is a collapse in the market value of news, as well as the pricing power of news outlets. The clearing price for news online today is zero. It’s possible that even that price is not low enough. At some point, news outlets may need to adopt negative pricing and actually pay consumers to view it (along with ads, presumably).

It is this context that makes the CNN story so amazing. The news market has never been more competitive. It’s so competitive, in fact, that the value of the ‘product’ has declined to pretty much zero, with many (many) traditional news outlets closing shop, other surviving exclusively on advertising. And yet someone at DOJ (or at the White House) thinks CNN raises antitrust concerns? The mind reels.

2. The Danger To Content Providers In A World Of Infinite Content Is Content Fatigue
Choice is a good thing. That being said, too much choice (i.e., an abundance of supply) can paradoxically lead to less content consumption rather than more. I think news may be the canary in the coalmine with respect to this problem. Growing up, my family watched the local news at 6pm and again at 10pm. Each of these shows was 30 minutes long, representing an hour of news consumption per day. In retrospect, I believe one of the reasons people did this was because of lack of choice. The news itself, not just the number of sources, was scarce and therefore highly valued.

Today I am exposed to news via notifications on my phone throughout the day. As a result, I honestly cannot remember the last time I sat down and watched 30 minutes of news on TV from any source. To be blunt, what’s the point? I’m already drowning in news as it is, without ever turning on the TV.

Contrary to the conventional wisdom of just a few years ago, I believe sports are beginning to succumb to the same kind of fatigue. Take the typical sports fan on a run-of-the-mill fall Sunday. You almost have to hide under a rock to escape the deluge of NFL scores and highlights. The games themselves are neither scarce nor all that special. The same can be said for all the major sports. Given a choice of 50 different college basketball games to watch, my tendency increasingly is to watch none of them.

Last but not least, entertainment programming (scripted or unscripted) is hardly immune from this phenomenon. There’s just a ton of TV out there and no way to keep up with it all. The choice and quality are the best they’ve ever been. So why, then, am I watching less TV than ever?

My concern about CNN and other content companies is not that they have too much power, but too little. We are living in a world of radical abundance when it comes to video content, and it appears viewers just cannot keep up.

Stick with TDG and stay ahead of the curve.

Joel Espeilein is a Senior Advisor for TDG and serves as an advisor and Board Member to the video ecosystem and technology companies. He lives near Seattle, WA.