Mid-sized cable networks suffer from consumer leakage to OTT and vMVPD services



Customers continue to shy away from traditional cable and satellite video packages for cheaper web TV deals. With the exception of NBCSN, most of the major cable networks have been able to survive. However, this comes at a cost, as thousands of people have been made redundant and programming costs have been reduced in many basic cable networks.

Some have moved out of their traditional analog form and come up with improved online offerings. However, with a few exceptions, the digital revenue generated has not been a significant part of the revenue stream for most cable channels.

For small and medium sized networks, however, that was a different story. It’s particularly grim for independent networks, but even channels owned by major media players have had to shut down in recent years following the drop in subscribers.

Fusion, owned by Hispanic media giant Univision, recently aired. This was their first breakthrough in the English speaking market. It targeted bilingual millennials with a new and unique programming strategy, and it offered a wide range of content in the areas of entertainment, lifestyle, news, pop culture and satire.

One of his first shows in his early days was “America with Jorge Ramos,” which interviewed a diverse group of politicians, from President Barack Obama to Senator Ted Cruz. Along with its partner ABC News, Fusion also simultaneously broadcast “Good Morning America” and Univision’s “Despierta America”. However, it never attracted enough viewers to warrant hiring Nielsen Media Research to rate them.

ABC News and Univision Communications partnered on the channel in 2012, each investing $ 25 million and a launch date was set for 10/28/13. The two media conglomerates planned to target a booming market: young bilingual Latinos, with both the channel and a strong digital offering.

The companies quickly spent nearly $ 100 million from 2013 to 2016, and ABC News sold its stake in Fusion to Univision just before breaking even in 2017. Things didn’t go as smoothly as expected, but at least the chain was ultimately profitable in 2017 (see table below).

However, it was written on the wall that the channel should turn off after the two DISH Network

PLATE
and AT&T

T
DIRECTV said in January 2020 that they were abandoning the channel. The network had more than 46 million subscribers at the end of 2019, a number that rose to just over 14 million by the end of 2020 after the loss of distribution from the country’s two satellite operators.

The programming strategy was clearly not working and the multichannel operators were taking note. Typically, even if a channel is not Nielsen rated, when their contract is renewed with a major operator, they will pull the viewing data from the set-top box and see how many of their customers are watching a channel. DISH Network & DIRECTV apparently came to the conclusion that there weren’t enough people watching to justify a license fee of 14 cents per subscriber per month across their entire subscriber base.

Fusion’s story shows how consolidation in the cable and satellite industries has caused channels to be dead in the water if a few major players like DISH Network and DIRECTV decide they no longer want to broadcast the channel. .

Another midsize channel that died out at the end of the year was ESPN Classic, another channel with an outdated business model in this new world of thousands of online content choices. It has aired reruns of old sporting events, something for which there is little consumer demand. Although Walt Disney, ESPN parent

SAY
probably could have used their influence to keep the channel going, they probably decided it was in everyone’s best interests to shut down the network.


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