Media Matters’ Angelo Carusone: “Because there is a consensus forming around the destructive power of Fox News, it incentivizes the call to action, which is to go to cable companies and say, ‘Do not make me pay more money for Fox News.’”
Published
Media Matters’ Angelo Carusone: Tell your cable company, “Do not make me pay more money for Fox News”
Citation From the December 17, 2021, edition of WNYC’s On the Media
ANGELO CARUSONE (PRESIDENT, MEDIA MATTERS FOR AMERICA): Advertising is no longer what is relevant to Fox News. What Fox did after Glenn Beck, and then Bill O'Reilly, but it started after Glenn Beck, is the same way they built Fox News to make sure what happened to Richard Nixon never happened to another Republican president — and that was literally in the organizing memo that Roger Ailes had drafted for it — what they did after Glenn Beck, is they made sure that they would never be in that position again.
They started to embark on the way of shifting their revenue model. Most TV shows care about commercials, because that's where they get their major revenue stream. And what Fox did was change the revenue equation so that most of their revenue came from cable subscriptions. You know, Fox is the second most expensive channel on everybody's cable box right now — ESPN is number one. Just to show how powerful that is, Fox News could have zero dollars in advertising revenue — not a single commercial; they could run ad-free — and they would still have a 90% profit margin. No other commercial TV channel operates like that.
BROOKE GLADSTONE (HOST): But hold on here, does one subscribe to Fox?
CARUSONE: No.
GLADSTONE: Isn't it a basic cable channel?
CARUSONE: That's right. Everybody that has cable is forced to pay for Fox News and Fox Business. The way it works is, if you have a cable company, you pay a channel a nominal fee to broadcast it. Your subscribers don't subscribe to the channels, you offer them a package. What Fox decided to do, through a series of highly controversial moves over the last decade, is force cable companies to pay them way more than a nominal fee in order to provide it to their customers. That is something that every cable customer then has to pay for by extension.
So, Fox News currently gets about $2.50 from every single person that has cable. Fox Business gets about 30 cents a subscriber that that means about $300 million in revenue a year. Nobody watches Fox Business. They have tens of thousands of viewers on a good day. That's the same amount of revenue that MSNBC gets from cable companies, even though they have a million to 2 million viewers. It has nothing to do with viewership. It has everything to do with how you negotiate, and how rabid your audience can be in pressuring cable companies, ironically, to increase the bill for everyone. Fox News no longer needs commercials. And that's why we're in a period right now where it feels like they're even further removed from any kind of accountability.
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CARUSONE: So, because Fox News has abandoned the commercials as their primary revenue driver, they've gone all in on cable contract renewals. And coming up this year, Fox is going to actually go through a series of major renewals with these cable companies. And in order to offset all of the losses from advertising over the past couple years — in part because of Tucker and the extremism — they not only have to keep their high number, they actually have to go from $2.50 a subscriber to over $3. That's a big jump.
And so there's a campaign, “Un-Fox my cable box,” that's the name of it. And the same way that Fox News organizes their viewers to contact cable companies to say, “Hey, you better keep Fox News,” our simple ask is this — don't raise our bill. Don't make us pay more money for Fox News. And in fact, you shouldn't be forcing us to pay for Fox Business at all. There's really no rational basis for that, so everybody is always mad at their cable companies because their bills are so high. And a big part of the reason why their bill is so high is because Fox News keeps forcing it to go higher.
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CARUSONE: I look at this from a cold business calculus. They lost a few hundred million dollars in revenue from advertising. This is real money. And what they've done is they've created an inflection point, a decision point. Usually, it's spread out. And the decision point for all of us is actually coming up this year. That’s rare. We just don't get that. And the second reason why I have some optimism is that because there is a consensus forming around the destructive power of Fox News, it incentivizes the call to action, which is to go to cable companies and say, “Do not make me pay more money for Fox News.”