Wolk’s Week in Review: Licht is Nicht, Amazon may be launching an ad-supported tier

Wolk's Week In Review

1. Licht Is Nicht

Developments that surprise no one have been a theme in the TV industry this year and the ouster of CNN’s Chris Licht this week only continues the narrative.

Licht, who had been charged with changing CNN from the partisan Home of the Resistance back to Your Source for Impartial News, had seemingly veered from one misstep to the next, ending with a much-buzzed about article by former Politico writer Tim Alberta that portrayed him as a stock character from the HBO series Silicon Valley, high on self-confidence, low on self-awareness or people skills.  

With the cringey bit about the personal trainer.

Given the massive fallout from that article, his departure was not much of a surprise. More of a “when” rather than “if” kind of thing.

But that is not the real story.

The real story is that cable news is still trying to be relevant, still trying to find a magic switch they can flip to stop the falling ratings, aging audiences and general perception of unseriousness. 

And I’ve come to the conclusion that they cannot do so.

Why it matters

Cable news came about in the 1980s, in the era before the internet made it possible to immediately access all the information in the world.

Meaning that before 24- hour cable news, the only way a news junkie or a wannabe news junkie could get their fix was to tune into the networks’ nightly news shows and their local broadcast station’s evening news show. And to read the daily edition of various national and local newspapers along with the weekly or monthly editions of a host of magazines. None of which was of the moment. 

(Yes, there was news radio, but it mostly focused on traffic jams.)

So along came cable news, and it was as if a whole world had opened up.

But it’s now 2023, and the reason for the existence of cable news is no longer a factor. Not when anyone who wants to dive deeper into the news in real time has hundreds of places in which to do so. Ditto someone who just wants to skim.

And that’s before you even begin to factor in the impact of social media.

Meaning the need for an impartial, balanced purveyor of national news, a real time Walter Cronkite, no longer exists. That ship has sailed and is already way out in the middle of the ocean where no one can see it.

It is why Fox and MSNBC have turned to partisan opinion shows, the televised equivalent of talk radio for the internet era.

But here’s the thing—even if none of that were true, it would not be enough to save cable news. Cable news is dying because cable TV is dying. And because the monoculture that gave birth to cable news is dying too. Or maybe it’s dead already. 

So why is the media so obsessed with cable news? Probably for the same reason Succession got talked about way more than it should: the media loves to talk about the media. 

Even when (or maybe especially when) that medium is dying.

What you need to do about it

If you are CNN, you need to find a new reason for being. Yes, people will still tune in when there’s an election, a hurricane or when Russia invades Ukraine. But that is not a viable strategy. You need to find another reason for people to watch, and Fox and MSNBC seem to have the Hyperpartisan Opinion Show lane all sewn up.

If you are concerned about the state of the news in this hyperpartisan era, focus on the continued demise of local media, not just big city newspapers, but small town and suburban papers too, the kind of outfits that covered Little League games.

Because all politics is local, right?

If you are any of the players in this drama, this too shall pass. Time and money heal all wounds. Oddly enough Tim Alberta may be the one with the most ground to make up. Because I can only but imagine that being known as The Guy Who Wrote The Interview That Got Chris Licht Fired (fair or unfair as that characterization might be) is going to make it a lot harder to get your next interview subject to sit down with you. 

I know I’d be leery AF.

2. Amazon May Be Launching An Ad-Supported Tier

There’s a rumor floating about that Amazon is planning to launch an ad-supported tier of its Amazon Prime video service.

It’s an interesting play given that most users probably could not tell you whether they subscribed to Amazon Prime for the video or for the free two-day delivery.

My guess is that it is mostly the latter, which means that an ad-supported Prime would do gangbusters. Especially since the one rumor to emerge is that the current price point would be for the ad-supported tier while the ad free product would become an upsell, and users would have to pay a higher monthly subscription fee for it.

Meaning that between this and the upcoming password crackdowns and bundling packages, streaming is about to get a lot more complicated.

Why it matters

Amazon has the most valuable advertising data. Period. As the saying goes, Facebook knows who you want to be, Google knows who you’re trying to be, but Amazon knows who you really are.

Meaning you may follow Starbucks on Facebook, search for indie coffee shops on Google, but Amazon knows you have a monthly subscription for Green Mountain coffee pods.

Which means there are a lot of advertisers, DTC advertisers in particular, who would love to be able to use Amazon data to target their TV commercials, which explains why Amazon would be smart to create an even larger platform for them to do so.

What’s not so clear is what consumer reaction will be. 

Especially to the “hey, you’re getting ads in your TV shows unless you pay us more” piece.

On the one hand, Amazon’s interface has always been confusing, purposely so, I suspect. The line between what shows and movies are included in Prime and which ones require you to either rent or buy them has never been clear. That is why when Freevee shows are included in Prime search results with a “watch for free with ads on Freevee” banner, most viewers just assume that is just another flavor of Prime, not an entirely distinct and separate service, the line between the two being rather blurry.

This then raises the question as to what would be the difference between the ad-supported tier and Freevee? I would say it would be access to Amazon originals, but for the fact that Freevee also has its own originals, one of which, Jury Duty, seems to be getting some buzz right now. 

The second question is how consumers will feel about being upsold. Disney did it with ad-free Disney+, but there was always the knowledge that the initial price was a “low introductory price” whereas Amazon has been selling Prime + ad-free video for at least a full decade.

So there’s that too. 

Despite all that, I still think Amazon is in a very good place here, mostly because people will continue to subscribe for the free delivery. That’s a habit that got even more ingrained during the pandemic. Whereas, with a few exceptions like Lord of the Rings and Mrs. Maisel, their TV product has not really been top of mind for most people as of late.

Meaning that if they had to watch a few ads the way they currently do when watching NFL football on Amazon, but could continue to rent first-run movies and watch them ad-free, they’d be fine with it.

Or pretty much fine, anyway.

Just don’t mess with the free two-day delivery.

What you need to do about it

If you’re Amazon, and this ad-supported thing is indeed real, you need to figure out why and how the new tier is different from Freevee and then explain it to people. 

Be prepared for some pushback and negative press on the upsell piece (again, if that is indeed the road you are going down) and then make sure your upsellees feel they are getting real value for their extra dollars. Not sure what that would look like but it’s something.

But mostly be prepared for massive uptake on the ad-supported product, as my gut says most people won’t bother to upgrade, at least not until there’s a show they really want to watch without ads.

And if you are Google and Meta, be afraid. 

Be very afraid.

Next week at the StreamTV Show in Denver join us as TVREV presents “The Future of FASTs Workshop” on June 12, 2023. TVREV’s “FASTs Are The New Cable” reports helped define the state of FASTs today. In this session, brought to you by TVREV and the StreamTV team, we’re going to take things to the next level. Come participate as we talk to key thinkers and decision-makers in the field to explore where the FAST ecosystem is heading in the years to come with an eye towards the ways it will impact programming, advertising, the interface and local TV. View full StreamTV Show Agenda.

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 Fierce Video.