At the dawn of the Cable News Network, back in 1980, founder Ted Turner filmed a military band performance with his crew Closer, God, to You. The anthem, which was also played when the Titanic sank into the Atlantic Ocean, will be the last to be broadcast by CNN in the event of the end of the world.
Some insiders seemed ready to dig the doomsday tape out of the vault this week as Chris Licht’s run as the network’s CEO came to an abrupt end. Ever since a withering profile appeared in The Atlantic, CNN has been portrayed as a network consumed by a moral crisis with little idea of its future.
CNN’s travails have been discussed with the same intensity as Fox News’ recent dissection of the firing of star host Tucker Carlson. Has it drifted too far left under Donald Trump’s presidency? Since then has it been too risky to stand in the middle of the road?
These questions miss a larger commercial point. The era of cable news that Turner ushered in is coming to an end. And while the cultural and political implications of this fact consume the public’s attention, this story is also about the downfall of one of media’s great business models.
The most troubling feature of Licht’s 13-month reign wasn’t that he interviewed 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 1.7 million in 2020. CNN is behind old 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 and the United States. The pay TV audience is getting smaller and older. This has been true for some time, but commercially it hardly mattered: through the magic of retransmission fees, where distributors pay content owners to broadcast their channels, revenues and profits have remained.
CNN’s annual revenue has doubled to $2 billion in the decade leading up to the 2020 U.S. election, and according to the New York Times, it has made roughly $1 billion in profits in each year of Trump’s presidency.
That reversed, with revenues falling below $1.8 billion. With annual profits still at $750 million last year, the business isn’t falling off a cliff, but as Warner Bros’ Wile E Coyote might say, gravity eventually takes its toll.
News and sports channels were supposed to be the services that enticed viewers to keep their cable subscriptions, giving their owners negotiating power with distributors. But more and more subscriptions are being canceled and media owners can’t replicate that model on online or streaming platforms.
The old model was so profitable that there was little incentive for cable news providers to become big brands in digital news, allowing others to take over, from old newspapers to cheesy podcast hosts. It might be too late to catch up now.
When the first 24-hour channels started, they filled a clear gap in the news market. Whatever Licht’s successors do, they are unlikely to repeat this trick.
Journalistically, this is not the end of the world. But the end looks like a news media business model that will not be replaced by anything nearly as profitable.