Will Cable's Digital Efforts Hit A Wall?

Commentary

• by Wayne Friedman , Staff Writer, September 22, 2017

Traditional TV companies moving into digital seems like a no-brainer. But even veteran TV-based companies can miss -- a bit.

Take CNN Digital. It pulls in $370 million in revenues a year, according to the company. But despite these numbers, according to BuzzFeed, CNN Digital now has a $20 million budget shortfall.
CNN Digital has a staff of 660 people and is not considering layoffs, per various reports. AT&T has yet to close its $85 billion deal for Time Warner, which will add to the company’s already sky-high debt load.

So the question is: Is there too much optimism when it comes to all things digital -- especially when traditional TV companies can be involved?

CNN Digital’s problem may just be a small wrinkle in a nicely pressed suit.
For CNN, and for other major cable TV news networks, TV viewership and ad sales have soared since the presidential election. This reality comes against viewership declines in almost all other areas of TV -- broadcast and cable networks, local TV station programming and U.S. syndication.

It is even more important when you consider that TV news programming is viewed live -- with little or no time-shifting. TV news is now a “premium” level for advertisers. Big news platforms can potentially charge more for TV inventory.

Still, rumor has it that AT&T may sell the CNN unit to help pay off the debt for the Time Warner acquisition. There will be plenty of interested buyers -- possibly even CBS.

One future issue is the aging of general TV news viewers -- particularly key 25-54 adults.
TV has yet to attract younger viewers in big enough numbers. Viceland is one TV news channel in the hunt -- as well as traditional TV companies pursuing more digital platform efforts.
CNN Digital, and similar business news units, aren’t going away. But they aren't problem-free, either.