KUHN CAPITAL Saturday, February 24, 2018
Dispatches from the front

Old Media’s Wasting Disease

Last year we wrote of the steady deterioration of broadcast TV network viewership and speculated on the causes for it, most prominent among them -- we think -- a squandering of viewer trust.

The market share decline is well documented: 34% fewer people watch broadcast programming today compared to 10 years ago, with the trend accelerating. In a particularly rapid descent, broadcast network news viewership fell 26% in 2001 alone.

Altogether, the market share of the seven broadcast networks declined from 34% of total television households in 2000 to 29% this year. What we have here is a failure to communicate.

Sure, other factors are bedeviling the broadcast network model as well:

Channel proliferation courtesy of cable, a development that’s been underway for over 20 years now, and so is old news. This channel specialization permits the viewer more freedom to select content of interest, escaping the mass media’s one-size-fits-all programming.

Source proliferation too, e.g., blogging, just one of many disparate news source types newly emerging also as a result of ever cheaper and customizable media technologies. No longer can traditional broadcasters rely on high fixed costs and FCC-licensed airwave monopolies to protect their franchises: now nearly anyone can communicate to millions of others instantaneously. Of course, for viewers it’s caveat emptor: one extends trust to any one of these thousands of bedroom office sources carefully and on a case-by-case basis, but -- given recent big media assaults on news integrity -- even this distinction is eroding.

Threats to mass advertising revenue from various direct-to-end-user channels (again, the Internet) and from time-shifting and digital technologies that either skip annoying ads or facilitate pay-for-content schemes. This last threat, like the others, shows no sign of abating, only growing as technology advances.

• Finally, lackluster, copy-cat broadcast programming. In contrast again to cable, network content looks sclerotic and committee-hatched.

But as if all these horsemen of the apocalypse weren’t enough, amazingly the TV broadcasters seem intent on hastening their own decline by pressing an increasingly ideological agenda on their viewers, most clearly in the persons of their aging news anchors. As most viewers already intuitively know, CBS’ Dan Rather is but the most recent and specific example.

Viewer and reader goodwill, trust, is perhaps any media’s most precious asset, and directly tied to financial performance, so any competent network executive would fight to preserve and grow it. But what we’ve seen lately are actions that in fact result in the selling off of viewership assets apparently to advance a higher goal – the grinding of political axes.

We should note that this argument isn’t meant to be anti-left, though we admit to being pro-business. It’s simply an observation that political agendas of any stripe have no place in newsrooms, and for good reason – they hurt business and depress shareholder returns by alienating at least some viewers who leave and don’t come back.

Of course the TV broadcasters aren’t alone in indulging this growing habit. In fact, the last year has seen a remarkable parade of ideologically-driven media ethical scandals featuring the most prominent newspapers and radio broadcasters of the Western world -- the New York Times, Newsday (twice), the BBC (spectacularly), and to a lesser degree, the Los Angeles Times and the San Francisco Chronicle related to their activities in opposition to the Schwarzenegger campaign.

Even the movie business, already having earned a wide reputation for ideological meddling, took a giant further step into ethically-challenged territory this year with Michael Moore’s “documentary,” in this case an obvious degradation of the term. And cable channels aren’t immune to the disease: CNN now has James Carville and Paul Bugala hosting “Cross Fire” while at the same time they advise the Kerry campaign. So on this program, where does content stop and political advertising begin?

In sum, all these instances share a common pathology: the abandonment of traditional reporting and truth-in-labeling standards in favor of increasingly strident ideological postures. But broadcast TV remains uniquely threatened, in part due to its heightened vulnerability to technological changes and in part due to its own actions.

What fascinates us is the answer to this question: are the network’s managers deliberately selling off market share to advance ideological goals, or are their political blinders strapped on so tight they can’t see the slippery slope under their feet? In either case, short broadcast TV and find an industry that respects the rights of its shareholders.

Ryan Kuhn

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