Too Much TV: Your TV Talking Points For Friday, June 2nd, 2023

Understanding the economics of streaming

Here's everything you need to know about the world of television for Friday, June 2nd, 2023.

A QUICK PROGRAMMING NOTE
Despite my best efforts, I wasn't able to get a newsletter out yesterday. The 24-hour back-and-forth trip to L.A. along with all of the stuff I had scheduled didn't leave me much time for anything else.

I was out there to be interviewed for a documentary that is coming out this fall and while I'll talk about the experience more once the project is announced, it was a fascinating look at the television documentary process for me. I don't have a problem talking and I frequently do radio and podcasts. But this was the first time I had been interviewed on camera this way and I definitely have a new perspective on those talking head segments I see in various true crime documentaries.

UNDERSTANDING THE ECONOMICS OF STREAMING
Even among journalists and experienced media industry insiders, there is conventional wisdom that argues many of the current financial challenges in the streaming industry are due to what is essentially looking at Netflix's stock price, deciding they have a pretty sweet approach and then deciding to blow up the profitable linear TV/Syndication/Physical Media market in a pivot to streaming.

There are some inconvenient facts about this theory, such as the reason why streaming seemed so attractive to media executives a decade ago was they were already seeing early signs the traditional linear TV & physical media markets were weakening. A pivot to streaming wasn't the cause of the collapse of the old model. It was a reflection of the problem.

But I want to focus on an often unstated part of "the streaming business model sucks" argument. That the revenue model for streaming is built around nothing but unfocused dreams and unrealistic economic projections. The implication is that there's very little money to be made in streaming and those dumb executives would realize that if they would only look at the underlying numbers of their business.

So let me introduce you to the LTV formula. The Lifetime Value model is used by every major streamer and media company and it is a concept to estimate the net present value of the profit stream of a subscriber. It's an effort to determine the costs of acquiring a subscriber balanced against the amount of cash flow that individual subscriber will generate over their subscription. Companies will use an LTV equation to help shape everything from marketing spend to content costs. The problem is that it's also an idea that is nowhere near being foolproof. And even more dangerous, the equation can be pretty easily manipulated to get the outcome you desire.

Here is a simplified look at a Lifetime Value Model:

I am going to break this formula down and show how it is being used (and often mis-used) in the streaming business in a piece that will post this weekend.

It will go out only to paid subscribers in a standalone post on Sunday and will be the first of a series of regular paid subscriber posts that dive deeper into some of the important stories of the media business. The goal is to post every other Sunday initially and slowly increase the frequency to every Sunday morning. The pieces will eventually be available for free on AllYourScreens.com. But this is another effort to encourage people to upgrade to a paid subscription while still keeping the core M-F TooMuchTV newsletter free to everyone.

If you'd like to subscribe or upgrade your free subscription, click here.

INSIDE THE MELTDOWN AT CNN
I have written a few times in this newsletter about my distaste for the changes that have happened at CNN under the leadership of CEO Chris Licht. He was hired by Warner Bros. Discovery CEO David Zaslav to turn around the cable news channel. Both Zaslav and major WBD shareholder John Malone argued CNN needed to be more "non-partisan," although it has never quite been clear what that means. Based on previous comments from both men, their mental image of non-partisan is a network whose editorial stance features a lot more conservative voices and a lot less criticism of former President Donald Trump.

The Atlantic's Tim Alberta has an absolutely scathing piece about Licht and this paragraph quite nicely encapsulates everything that has gone wrong with CNN since he was hired following the Warner Media/Discovery merger:

“You have a certain segment of society that has had an unfettered megaphone to the leading journalistic organization in the world,” he said. “And at the slightest hint that that organization may not be just taking things that are fed to them from that segment of the population, it must be that a fascist is running the network and he wants to move it to the right … The fact that I want to give space to the [argument] that this thing everyone agrees with might be not right doesn’t make me a fascist right-winger who’s trying to steal Fox viewers.”

And that has been the core of the problem at CNN. Licht, led by Zaslav and Malone, went into this reboot of the network from the perspective of seeing CNN as essentially a strongly liberal network. It's not a surprise that when CNN media reporter Brian Stelter was let go early in Licht's reign, the reason given on background by network executives was that Stelter's frequent recountings of Trump's legal difficulties illustrated his partisanship. They weren't arguing that Stelter's reporting was wrong. But that the pieces made many Republicans unhappy and the network wanted to give voice to their point of view.

But difficult reporting is not inherently partisan because it makes one side unhappy. If you are indeed wanting a news network to be the middle ground, then cutting back on tough coverage of Republicans while also frequently telling the press you hope the network to grab some viewers from Fox News is perhaps not the way to go.

But aside from the editorial decisions, it's also clear that Licht has some problems doing the glad-handing required in any executive job in which you are dealing with a group of highly educated, status obsessed journalists:

Among the first things he did, after taking over, was turn Zucker’s old office on the 17th floor—across from the bullpen, right near key studios and control rooms—into a conference room. Then he decamped to the 22nd floor, setting up in a secluded space that most staffers didn’t know how to find. It became symbolic of Licht’s relationship to his workforce: He was detached, aloof, inaccessible in every way.

The comparisons with Zucker were inevitable, and Licht hated them. Whereas the old boss was gregarious and warm, giving nicknames to employees and remembering their kids’ birthdays, Licht came across as taciturn, seemingly going out of his way to avoid human relationships. At a holiday dinner for his D.C.-based talent, Licht went around the private room at Café Milano, shook hands and spoke briefly with each of the journalists, then sat down and spent much of the dinner looking at his phone. Not only did he say nothing to address the group—as they all expected he would—but Licht barely interacted with the people seated near him. It became so awkward that guests began texting one another, wondering if there was some crisis unfolding with an international bureau. When a pair of them caught a glimpse of Licht’s phone, they could see that he was reading a critical story about him in Puck.

One ironic side note is this paragraph in the story, given that Dylan Byers has just posted another Licht piece which argues David Zaslav might be close to pushing Licht out of his position:

Licht told friends he was convinced that Zucker—whose legacy he was undermining daily with rhetorical recriminations about past damage to CNN’s brand—was retaliating by pushing hit pieces on him. In particular, Licht felt certain that Zucker was using Puck’s Dylan Byers, an ex-CNN employee who was pummeling Licht multiple times each week in his newsletter, to foment narratives of a mutiny at the network.

The weird thing about this public obsession with being perceived as non-partisan is that Licht stumbles upon the same solution I have been advocating for over the past several years. That the problem with cable news (and CNN is particular) is that it focuses too much on the stories that matter to the Beltway and to both coasts. It's not an elitist point of view. It's a cultural, big city lens. And while what matters in Congress or at the White House matters, recent history has shown the stories that matter now in the heartland now will bubble up to the national stage in the coming months:

Licht insisted that his media critiques were not ideological; that he was rebuking not a liberal slant on the news, per se, but rather a bias toward elite cultural sensibility, a reporting covenant in which affluent urban-dwelling journalists avoid speaking hard truths that would alienate members of their tribe. When we returned to the question of covering transgender issues—specifically, the science around prepubescent hormone treatments and life-altering surgeries—he suggested that the media was less interested in finding answers and more worried about not offending perceived allies.

Licht argued that the media’s blind spots owe to a lack of diversity—and not the lack of diversity that he sees newsrooms obsessing over. He wants to recruit reporters who are deeply religious and reporters who grew up on food stamps and reporters who own guns. Licht recalled a recent dustup with his own diversity, equity, and inclusion staff after making some spicy remarks at a conference. “I said, ‘A Black person, a brown person, and an Asian woman that all graduated the same year from Harvard is not diversity,’” he told me.

I agree with a lot of this. But this isn't a partisan issue. Even though Licht seems to conflate people on the coasts with liberal elites. CNN has massive resources throughout the country and can access hundreds of local news stories a day as well as experienced local journalists. If you are truly concerned about expanding the culture of CNN's news coverage, then lean into those stories and resources instead of getting caught up in this rabbit-hole of being "non-partisan."

And one upside to that is most viewers already realize CNN has these extensive local assets. Retargeting the network to use those resources reinforces the CNN brand and gives it something unique to sell. Rather than being "CNN: We're Non-Partisan, But Fox News Viewers Like Us Too."

TWEET OF THE DAY

WHAT'S NEW FOR THIS WEEKEND:
FRIDAY, JUNE 2ND:
* An Unforgettable Year - Summer (Um Ano Inesquecível - Verão) (Prime Video)
* Deadloch Series Premiere (Prime Video)
* Guy's All-American Road Trip Season Premiere (Food)
* Love Allways (Paramount+)
* Manifest (Netflix)
* Medellin (Prime Video)
* Missed Connections (Netflix)
* Painting With John Season Two Premiere (Max)
* Queen Of The Universe (Paramount+)
* Rich In Love 2 (Netflix)
* Scoop Series Premiere (Netflix)
* Searching For Soul Food Series Premiere (Hulu)
* Shiny Happy People: Duggar Family Secrets (Prime Video) 
* Shooting Stars (Peacock)
* The Dancing Detective: A Deadly Tango (Hallmark Movies And Mysteries)
* The Greatest @Home Videos (CBS)
* Valeria Season Three Premiere (Netflix)
* Vortex (Netflix)
* Well Designed Series Premiere (Max/Discovery+)
* With Love Season Two Premiere (Prime Video)

SATURDAY, JUNE 3RD:
* Act Your Age (Bounce)
* Sex & Murder Season Premiere (Investigation Discovery)
* TLC Forever (A&E/Lifetime)
* Vacation House Rules Season Premiere (HGTV)
* Wedding Season (Hallmark)

SUNDAY, JUNE 4TH:
* Ancient Armageddon (Science)
* Autopsy: The Last Hours of Eazy-E (Reelz)
* Battle On The Beach Season Premiere (Food)
* Ciao House Season One Finale (Food)
* Danger Below Deck (Lifetime)
* Joe Pickett Season Two Premiere (Paramount+)
* 90 Day Fiancé: Before The 90 Days Season Premiere (TLC)
* The Eric Andre Show Season Six Premiere (Adult Swim)
* The Idol (Max)
* The Lazarus Project Series Premiere (TNT)
* TLC Forever (A&E/Lifetime)

MONDAY, JUNE 5TH:
* Alma's Way: Alma Goes To Puerto Rico (PBS)
* America's National Parks Season Premiere (NatGeo)
* American Ninja Warrior Season Premiere (NBC)
* Barracuda Queens Series Premiere (Netflix)
* Crime Scene Kitchen Season Premiere (Fox)
* Cruel Summer (Freeform)
* Stars On Mars Series Premiere (Fox)
* Stronger (Netflix)
* The Age Of Influence Series Premiere (Hulu)
* The Reptile Cult Murder (Investigation Discovery)

Click Here to see the list of all of the upcoming premiere dates for the next few months.

SEE YOU MONDAY!

If you have any feedback, send it along to Rick@AllYourScreens.com and follow me on Twitter @aysrick.