Customers continue to flee traditional cable and satellite video bundles for cheaper web-based TV offerings. With the exception of NBCSN, most major cable networks have been able to survive. However, it’s come at a cost as thousands of people have been laid off and programming costs have been slashed at many basic cable networks.
Some have moved out of their traditional analog form and offered enhanced online offerings. However, with few exceptions, the digital revenue generated has not been a significant part of most cable channel’s revenue stream.
For the smaller and mid-sized, networks, however, it’s been a different story. It’s particularly bleak for independently-owned networks, but even channels owned by major media players have had to shut down in recent years following large subscribers declines.
One recent channel to go off air was Fusion, owned by Hispanic media giant Univision. This was their first push into the English speaking market. It was targeting bilingual millennials with a fresh and unique programming strategy, and it had a wide array of content across entertainment, lifestyle, news, pop culture and satire.
One of its first shows to debut was “America with Jorge Ramos,” who interviewed a diverse group of politicians, from President Barack Obama to Senator Ted Cruz. With its partner ABC News, Fusion also simulcast “Good Morning America” as well as Univision’s “Despierta America.” However, it never captured 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 burgeoning market—young bilingual Latinos, with both the channel and a strong digital offering.
The companies quickly burned through almost $100 million from 2013-2016 and ABC News sold its stake in Fusion back to Univision just prior to it breaking even in 2017. Things were not going as well as expected, but at least the channel was finally profitable by 2017.
However, the writing was on the wall that the channel would have to go dark after both DISH Network DISH -0.2% and AT&T’s T -0.4% DIRECTV said in January of 2020 that they were dropping the channel. The network had over 46 million subs at the end of 2019, a number which dipped to just more than 14 million by the end of 2020 after the loss of carriage from the nation’s two satellite operators.
The programming strategy was clearly not working and multichannel operators were taking note. Typically, even if a channel is not Nielsen-rated, when their contract comes up for renewal with a major operator they will pull set-top viewing data and see how many of their customers are viewing a channel. DISH Network & DIRECTV apparently reached the conclusion that not enough people were viewing to justify a license fee of 14 cents per subscriber per month across their entire subscriber base.
The story of Fusion shows how consolidation in the cable and satellite industries has made channels at risk of being dead in the water if a couple of major players like DISH Network and DIRECTV decide they no longer want to carry the channel.
One other mid-sized channel that went dark at the end of the year was ESPN Classic, another channel with an outdated business model in this new world of thousands of choices of content online. It aired reruns of old sporting events, something which there is little consumer demand for. Although ESPN-parent Walt Disney DIS +1.1% probably could have used their leverage to keep the channel on the air, they likely decided it was in everyone’s best interest to shut the network down. Forbes