Wolk’s Week in Review: CNN to launch on Max, Syndication market in flux

Wolk's Week In Review

1. CNN To Launch On Max

In a move that could have wider-reaching implications, Warner Bros. Discovery announced that they would be launching a version of CNN on their streaming app, Max.

And by “a version,” I mean a parallel 24-hour news service featuring household name anchors that will also contain live feeds of the most popular shows from OG CNN.

And by “most popular shows,” I mean Anderson Cooper 360, The Lead with Jake Tapper, The Situation Room with Wolf Blitzer and Amanpour.

So none of the fuzzy news-adjacent shows that formed the bulk of the ill-fated CNN+’s offering.

This would be a bold move at any time, but coming in the midst of the WGA/SAG-AFTRA strikes, it is particularly bold, especially given the state of Old School Pay TV.

Or maybe not.

Allow me to explain.

Why it matters

It is conventional wisdom that access to news and sports is one of the main reasons people keep their cable subscriptions. 

And while paying an extra $100 each month to keep your options open in case there is a presidential debate, a serious natural disaster or an actual election is not, prima facie, a rational decision, consumers, as you may have noticed, are not always rational.

Neither, for that matter, is a 24-hour cable news network, at least not in 2023.

24-hour cable news made sense when it was first rolled out in the 1980s. There was no internet and so anyone who wanted to know what was going on in the world in real time was pretty much limited to news radio. Newspapers came out once a day. So did network news shows.

Today’s news junkies have a literal smorgasbord of sources from constantly updated local, national and international websites to social media to a full array of news blogs.

Meaning there’s not a whole lot of need for networks like CNN anymore, except during major events and/or times of international crisis.

So on the one hand, there’s that.

On the other, there’s The Strike, and there is a good chance it is going to have a major impact on Old School Pay TV, as there will be no new scripted programming, while streaming offers a whole spate of shows viewers have missed over the past several years that can be binge watched instead.

The result is likely to be an increase in the amount of cord-cutting from a slow trickle to a slightly faster trickle.

This in turn will decrease the number of viewers watching CNN and thus the amount of carriage fees WBD gets from CNN. 

So that’s the first part of the bet WBD is making: that the number of new Max subscribers offsets the loss of Old School Pay TV CNN subscribers.

The second part of the bet is a bit trickier: they seem to be betting that, like everything else these days, the way we watch TV has become something of a culture wars issue, and that there are a sizable number of people who see being pay TV subscribers (or, more accurately, not being streaming-only viewers) as part of their cultural identity and thus that cohort is not going to cut the cord anytime soon, no matter how many “massive wave of cord-cutting” articles the tech trades write.

Meaning, of course, that the availability of CNN on Max is not going to cannibalize CNN on linear, that while there will be some viewers who see this as a reason to finally let cable go, the new CNN Max service will mostly serve to bring in a new group of streaming-only viewers.

There are other advantages as well. 

Max sees Netflix and Disney as its main competitors for Tier 1 streamer status.

Only Netflix has no news service. 

Neither does Disney, although Hulu, which is part of their bundle, carries the ABC News feed, which appears to be less a 24-hour news feed with name anchors than a kludged together offering of B-roll, David Muir and news-adjacent stories.

So having a solid news offering along with high quality entertainment (HBO) and lots of lean-back non-fiction content (Discovery) gives Max a compelling point of differentiation.

The news offering also gives all those pharma advertisers a place to go on streaming, and Lord knows, they have billions.

So there’s all that too.

What you need to do about it

If you are WBD, well done. This seems to be a very smart move as there are indeed a sizable number of people who still love Old School Pay TV, and that most of them are over 65, which is the age of the average cable news viewer. Meaning the risk of cannibalization is minimal.

Kudos too for creating a service that appears to be worthy of Max, with top name anchors and programming aimed at a more sophisticated HBO audience. If you play your cards right, this may even help you make up ground against MSNBC.

Which brings up the first of two things you need to figure out: how are you measuring all this?

In an ideal world, the impressions-based measurement for CNN Max helps offset your rapidly fading numbers on CNN OG, but how to ensure that advertisers actually buy that argument?

The second piece you need to figure out—and I’d play this by ear—is which CNN is the alpha and which is the beta. That’s going to be something you’ll need to figure out though, as both sides will be fighting for resources, budgets and, ultimately, control.

My money is on CNN Max, but viewers will decide soon enough.

2. Syndication Market In Flux

Flying well below the radar of most industry observers is a multibillion dollar market known broadly as “syndication.”

While most people are aware that “syndication” frequently means “reruns of popular network TV series,” the category includes a wide range of originals too, largely, but not exclusively, Judge Judy-esque “court shows,” game shows and talk shows. 

Think of it as the TV industry’s equivalent of straight-to-video movies.

These original series have long formed the backbone of many local broadcast station schedules, giving them original programming to air during non-prime time hours, programming that, while largely dismissed by the coastal types who dominate the industry, had large and loyal followings. What’s more, these syndicated shows, which were inexpensive to produce, often made the studios who created them a whole lot of money. 

But the market is changing these days as the studios that once sold their programming to local broadcasters are now selling them to streaming services—FASTs in particular. FASTs give them access to national rather than local audiences and the promise of revenue from national advertisers.

As a result, local broadcasters have had to get creative about original programming, turning to new suppliers and even themselves.

Why it matters

Local broadcast is in flux, something that we will address in great detail in our new TVREV report on Local TV and Streaming, which is due out next month.

The syndication market is key here because many of the local broadcasters are starting to set up shop on the FASTs, with an eye towards moving expanded versions of their local news broadcasts to streaming, where there is still a paucity of local content.

Syndication gives broadcasters something else to put on their new FAST channels to attract and retain viewers.

At the same time, the studios that used to produce original programming for local broadcasters are shifting their efforts to streaming and getting out of the local TV marketplace.

These are not random studios either, but rather, the usual suspects, everyone from Warner and CBS to Lionsgate, via its Debmar-Mercury unit.

The fallout is two-fold.

FASTs are the natural home for all of the talk shows, court shows and game shows that once ran on local broadcast. I’m talking first-run series too, of the sort that can help draw in audiences, fuel ad campaigns and the like.

These series sometimes even break out and develop national audiences— Oprah, for instance, started out as a local talk show host. With the FASTs, national audiences are the default, though geotargeting could allow for more regional or local programming.

At the same time, local broadcasters are going to have to get more creative about programming. This works to the advantage of the larger local broadcast groups which can use their superior resources to create original programming. (The advantage being they get to keep 100% of the ad revenue versus sharing it with the studios.)

Not everyone has given up on local broadcasters either. Byron Allen, Chairman and CEO of the Allen Media Group, has been very vocal about his support for local broadcasters and in creating programming for them.

So there’s that too.

There is a final reason that this all matters too and that is daytime TV is doing better than other dayparts.

Ratings-wise, as of November 2022, it was only down 2% YOY, putting it in sharp contrast with Prime Time, which was down 17%.

It’s also gaining momentum in terms of the amount of ad impressions. As John Cassillo recently noted in TVREV, “[D]aytime is now 17.7% of linear impressions — up from 17.3% the year before. As audiences continue to fragment to streaming environments and on-demand programming, seeing ANY daypart showing annual growth is a positive sign.” 

Which is why there’s still much interest in developing programming for it.

What you need to do about it

If you are a studio, reconsider totally giving up on local. There may be a way to sell your content to the FASTs via the local broadcasters, letting you plant your feet in both places. Worth a shot.

If you are a local broadcaster, you need these syndicated programs, especially as you move more and more of your audience onto streaming. It’s something to set you apart from all those other FAST channels and, as you will learn in our upcoming report, local viewers and local advertisers love local content.

If you are a content producer, there is a big gap here just waiting to be filled. Your programming does not have to adhere to old formats either—think interactive, shoppable, snackable, live—as local TV moves to streaming, you will have a whole range of options and technology that you can take advantage of. 

Be fearless.

Alan Wolk is co-founder and lead analyst at the consulting firm TV[R]EV. He is the author of the best-selling industry primer, Over The Top: How The Internet Is (Slowly But Surely) Changing The Television Industry. Wolk frequently speaks about changes in the television industry, both at conferences and to anyone who’ll listen.

Wolk's Week in Review is an opinion column. It does not necessarily represent the opinions of StreamTV Insider.