In short
The collapse of the old “cable bundle” TV model and what major media companies are doing next—Paramount’s future under David Ellison, ESPN and Fox’s new direct-to-consumer streaming launches, cable-network asset sales, and whether buyers (private equity, YouTube, Netflix) will step in.
Guests
Rich Greenfield, analyst at Lightshed Partners; longtime media/TV industry watcher who has appeared on prior Peter Kafka/Business Insider/Vox Media shows.
Key claims
Cable’s bundle paid programmers regardless of viewership, enabling “kicking the can” while consumer behavior shifted to streaming. Today streaming services must earn daily “time spent,” and bundling flexibility reduces the value of standalone cable networks. Paramount can’t reverse linear-TV trends but can reinvest to grow Paramount+. ESPN’s $30/month standalone is mainly flexibility and packaging, not a huge subscriber driver. Fox One is framed as a Fox News–leaning bundle, not just sports.
Notable examples
South Park moving to Paramount+; ESPN standalone launch ahead of NFL season; DirecTV/TPG case; Sinclair/Diamond Sports bankruptcy after losing distribution; Netflix licensing deals (e.g., TF1) and long-term sports partnerships (e.g., WWE).
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOShifting Landscape of Television
0:04 to 1:22
A discussion on the decline of traditional TV models and the rise of streaming.
“Stock up on Welch's Fruit Snacks, made with whole fruit and now made with no artificial dyes.”
Shifting Landscape of Television
2:44 to 3:38
A discussion on the decline of traditional TV models and the rise of streaming.
“We've had you many, many times in the Recode Media days.”
Consumer Behavior Changes in TV
3:41 to 4:32
Exploration of how consumer habits have shifted and the implications for TV.
“Well, all of these things take time, right?”
The State of the TV Industry
4:33 to 10:01
In-depth analysis of the current challenges facing major TV companies.
“Within a couple of years, consumer behavior radically changed and the record labels who pretended it hadn't still had to sort of face reality.”
Paramount's Future and Ownership Change
10:01 to 14:00
Discussion on Paramount's new ownership and potential future strategies.
“is they're not used to being in services where they have to prove their daily value to the consumer every single day.”
The Future of Paramount and Streaming
14:00 to 17:50
Discussing the shifting strategies of Paramount in the streaming landscape.
“What do you think the contours of that look like?”
The Future of Paramount and Streaming
17:54 to 19:12
Discussing the shifting strategies of Paramount in the streaming landscape.
“but choosing a snack you and your kids can both get behind doesn't have to be.”
ESPN's DTC Streaming Launch and Its Implications
19:59 to 28:00
Analyzing ESPN's new direct-to-consumer streaming model and its impacts.
“service you could buy as a standalone streaming service.”
The Fox News Streaming Dilemma
28:00 to 34:23
Explores the evolving audience of Fox News and the potential for streaming integration.
“The idea that people in their 60s, 70s are going to get a streaming solution, that doesn't make any sense.”
The Fox News Streaming Dilemma
34:27 to 35:46
Explores the evolving audience of Fox News and the potential for streaming integration.
“Back-to-school season can be tough on parents.”
Show all 15 chapters
The Fox News Streaming Dilemma
35:52 to 36:18
Explores the evolving audience of Fox News and the potential for streaming integration.
“When you're 7-Eleven's hottest fire chicken sandwich, people think you're intense.”
Challenges in Cable Network Valuation
36:25 to 42:03
Discusses the complexities and challenges in valuing cable networks amidst industry decline.
“The answer to my question that I sometimes hear in terms of who's a buyer is, well, private equity.”
The Challenges of Media Engagement
42:03 to 46:00
Explore the dynamics of media engagement and acquisition strategies amid challenges.
“They, you know, it is a test and learn company, but I would be surprised if you think about how much content they've had over the last decade.”
Navigating Media's Future Amidst Uncertainty
46:00 to 48:06
Discuss the uncertain future of media companies and their strategies for survival.
“There's a lot of people who want deals to happen and maybe not a lot of incentive for those deals to go through.”
Streaming vs. Legacy Business Models
48:06 to 48:24
Understand the stark differences between streaming and traditional media models.
“I mean, maybe that's not the wrong answer, right?”
Transcript
Automatic transcript. May contain errors.0:00This episode is brought to you by Welch's Fruit Snacks. Back to school season can be tough on parents, but choosing a snack you and your kids can both get behind doesn't have to be. Stock up on Welch's Fruit Snacks, made with whole fruit and now made with no artificial dyes. It's a snack kids already love and one you can feel good about giving them. Go back to school with Welch's Fruit Snacks, now made with no artificial dyes. I get so many headaches every month. It could be chronic migraine, 15 or more headache days a month, each lasting four hours or more. Botox, Autobotulinum Toxin A, prevents headaches in adults with chronic migraine.
0:40It's not for those who have 14 or fewer headache days a month. Prescription Botox is injected by your doctor. Effects of Botox may spread hours to weeks after injection, causing serious symptoms. Alert your doctor right away as difficulty swallowing, speaking, breathing, eye problems, or muscle weakness can be signs of a life-threatening condition. Patients with these conditions before injection are at highest risk. Side effects may include allergic reactions, neck and injection site pain, fatigue, and headache. Allergic reactions can include rash, welts, asthma symptoms, and dizziness. Don't receive Botox if there's a skin infection.
1:09Tell your doctor your medical history, muscle or nerve conditions, including ALS Lou Gehrig's disease, myasthenia gravis or Lambert-Eaton syndrome, and medications, including botulinum toxins, as these may increase the risk of serious side effects. Why wait? Ask your doctor. Visit BotoxChronicMigraine.com or call 1-800-44-BOTOX to learn more. From the Vox Media Podcast Network, this is Channels with Peter Kafka. That is me. I'm also the chief correspondent at Business Insider. And today we are talking about the end of TV. At least TV as people knew it like a decade ago. The kind of TV where you paid one company a bunch of money and got a bunch of TV channels in return.
1:51And that was that. As you know, that model is going, going, gone. We are watching everyone who still makes money from that model scramble to figure out the next thing. And for this episode, I wanted to focus in on some of the particular challenges facing the big TV guys. So I brought in Rich Greenfield. He's the analyst at Lightshed Partners, who's been consistently smart about this stuff. If you are a longtime listener, you have heard him chat with me before. And today we are talking about Paramount's future, once Larry and David Ellison owned it, Fox and ESPN streaming plans, which are showing up in the next few weeks, the great cable channel garage sale that's supposed to be happening right now, if the sellers can find some buyers, and what YouTube and Netflix will do to capitalize on this chaos.
2:36It's a good media chat, if I do say so myself. You're going to like it. I'll put your money back. Here's me talking to Rich Greenfield. Rich Greenfield, welcome to the show. Welcome back to the show. We've had you many, many times in the Recode Media days. I think this is your first channel appearance. It is. Thank you for joining us. We've got a lot to talk about. We could talk for hours. I'm going to focus a little bit and let us talk about primarily about TV landscape, what's left of the TV landscape.
3:03Rich Greenfield:We have to talk about channels, Peter. I mean, can't we talk about something other than channels that are going away? It was funny. I was talking to an old media person last week, and he said, you know, someone like you or Rich Greenfield who's been around this forever, which I took as an insult, meaning we're both very old. But it did also meant that we had been tracking the evolution, devolution of TV into the internet for a long time. And it kind of seems like we've been here for a bit now. Like there's not a lot new. Do you get that sort of sense of like ennui, like we're just kind of covering the end of a thing instead of the beginning of a new thing?
3:41Rich Greenfield:Well, all of these things take time, right? I mean, you know, if you think about, It's been over a decade since House of Cards and sort of the internet era is now undeniable in terms of where the consumer is at. I think what's funny now is you've got all of these cable companies now rushing to bundle in streaming services because they recognize that people don't really care all that much about a lot of these linear channels. and then at the same time you've got all of these media companies you know rushing to get out of linear tv it was like the they hit the red panic button like all at the same time and they're all trying to exit the business and you know we'll see i think 2026 is going to be an interesting year as you get a lot of these standalone companies and we'll talk about all those companies in a second but just back to the big big idea i mean it felt like when the music business collapsed back in Napster.
4:40That was 99, 2000, 2001. It happened basically overnight, right? Within a couple of years, consumer behavior radically changed and the record labels who pretended it hadn't still had to sort of face reality. And it just, the entire business changed overnight and then took a while to sort of recreate itself. TV seems like it is hung on for much longer, that even though consumer behavior changed pretty significantly over the last decade, It took a while for the companies to catch up. It took a while for Wall Street to force those companies to catch up. Is there some lesson we can draw from that?
5:16Or is there something specific about the TV industry that's allowed these guys to move in relative slow motion?
5:22Rich Greenfield:there's very few businesses where you can raise price on a product that consumers are using less and less every day i mean if you think about the brilliance of the tv business model that was put together the quote-unquote bundle the big you know we can call it the big fat bundle the multi-channel video bundle whatever you want to call it peter but there was probably no if you think about all of media. Like that's a pretty incredible business to put all of these channels together, even if people don't want most of them, no access to any sub parts of it. Like you can't just pick ESPN or ABC, you pay for everything.
6:01Rich Greenfield:And there's basically one price. You have lots of choices of where to get it from, but one price. And that price keeps going up. If you think about the other forms of media, it is very hard to raise price if your service is not being used. Certainly if your service is being used less and less and less, good luck raising price where it's easy to cancel and switch to something else. But this had everything you wanted and no alternatives, which is very different than where we are today. But I think that's if you ask, why did we get into this situation? It's because it was the ultimate business model.
6:36Rich Greenfield:It was so yes, it was good for consumers to have access to lots of stuff, but the fundamental business model of you got paid as a programmer, whether or not your content was watched in any meaningful way. So if you're the programmer, you keep that intact as long as you can. You kick the can down the road, whether or not you believe the future is coming. On that same note, one of my soap boxes I get on is when I see people, usually it's people on the internet, but sometimes grown up saying, oh, I wish we could go back to the cable days. Those were great. You just paid one service, and you got all the stuff, and can't we go back to that?
7:13And I keep saying, that was terrible. You guys forget. Everyone hated that setup, that you had to get everything, that you had to pay for sports if you didn't want sports, that you couldn't just get sports. Am I missing something, or are people right in saying they would prefer a solution, they'd prefer to pay even for stuff they're not getting, or are they just forgetting, or they didn't even know what they were getting.
7:36Rich Greenfield:When you say this, Peter, are you saying this like you've talked to actual friends and family who say this? Or do you hear this from media executives who wish for that world? Both. Both. And sometimes you'll hear WAG saying, oh, the industry shot itself in the foot by getting rid of the cable model and moving to streaming. I'm like, what are you talking about? They got dragged into streaming because the consumers were there. They didn't want to give up on cable. I think consumers are pretty adept at managing their services. And I don't hear a lot of complaints. You know, sometimes it's like, oh, where is this game or how do I find this thing?
8:15Rich Greenfield:It can be a little confusing. But, you know, the beauty of the Internet, you know, you think about your cell phone. You know, you've had a mobile phone for quite a while now. Managing the apps and, you know, deleting something if you're not using it and adding something is these are all pretty easy functions. I think, you know, I would say we don't give consumers enough credit for they're pretty adept at figuring out cheaper solutions, ways to manage. And I think that's the key here. This system, while not perfect, and certainly it's gotten confusing when companies are taking certain rights off of linear TV to sort of stimulate their streaming service, like we're putting a playoff game on Peacock instead of on NBC.
8:56Rich Greenfield:So they get you to subscribe to Peacock. Like there's lots of quote unquote games being played, but I think the consumer has far more control today over their entertainment life than they've had for decades. And I think that long-term is good for the business. Like let consumers choose what they want versus forcing them to take everything with no choice. And you and I are in the same boat. And I always point out, I say, by the way, consumers have figured this out. They churn out of these subscription systems all the time. It's a huge problem for the industry. Sure. But consumers certainly know how to turn off YouTube TV when the NFL season is over.
9:35We can see it in the numbers and they come back in the fall. People get it. And that really empowers people.
9:39Rich Greenfield:Like you think about like, does that give you free up budget to go spend? Maybe you go out and you do subscribe to Paramount Plus or Apple TV Plus. Like it gives you the ability to play and try things. These are very different services than a Spotify where I think that's like an everyday usage. not all of these services do you need for the entire year. And I think that's the challenge they're all having is they're not used to being in services where they have to prove their daily value to the consumer every single day. And that's hard because in the cable world, it didn't work like that. Let me walk you through a few companies I want to talk to you about.
10:16Let's start with Paramount because that is in the news. I've heard of that company. That deal closed. Well, it got the official go-ahead to close last week. It'll close basically any day now, leaving aside the politics of the deal for now. We'll come back to it. When that deal closes, the existing owners have shut down Colbert. You said, look, this is we're going to see lots more of this of people getting rid of general entertainment. What do you think the new owner, David Ellison, and his father, Larry Ellison, will do once they have control of this? Will it change overnight or is this sort of a slow rolling thing?
10:52Rich Greenfield:Well, I think it will certainly change. You've got one of the sort of the juxtaposition is sort of amazing, right? Financially strapped company sort of challenged financial ownership, right? Like in terms of like issues around the Redstone family and national amusements, like challenged not just at the, you know, at the parent company level, but also just daily operations, massive cost cutting, you know, turn on. Turn on MTV, you know, the network and look at how much the programming has been cut back over the last, you know, six or seven years. This is a challenge company. And you're moving to a company or an ownership team that effectively on paper, you know, Peter, because I think that's what's important here.
11:39Rich Greenfield:But on paper, you have one of the wealthiest families on planet Earth. Larry Ellison is the second richest man in the world. Correct. Now, David Allison is probably going to be running this company for 30, 40 years. Like there's no, you know, I think this is a passion. He's wanted to move from, you know, basically starting a co-financing and smaller studio and skydance and animation business. This is a guy who started out trying to be an actor in Hollywood, then moved into producing and now is a mogul. He obviously has a passion for entertainment. You're moving to a much bigger stage. The question is, this is a financially struggling company.
12:17Rich Greenfield:I don't think David Ellison, nor Jeff Schell, nor anyone on the team can reverse the fortunes of linear television. Like, I think the, you know, it's funny, we're having this conversation in, it's basically the end of July. I don't know when the podcast is going to hit, but we're at the end of July, 2025. And Peter, you probably remember, because you were doing this, you were probably at all things, or you were probably at all things D. So in 2015, I don't know if you were Recode or wherever, but in 2015, in August, I think August 5th, to be specific, one of the most thoughtful people in the industry, Bob Iger, came out and sort of warned that cord cutting was starting.
12:56He finally acknowledged it. We knew that it was happening, but the industry wasn't acknowledging it publicly. He said, actually, ESPN, we're losing some subscribers. Everyone freaked the fuck out.
13:05Rich Greenfield:That was 10 years ago, basically this week. That's like a pretty seminal, if you think about sort of where we are. But 10 years ago, we went into this era. So I don't think Skydance or Paramount, they can't fix the trends of what consumer behavior is changing. What they can do, Peter, though, is invest and really build. And that's the question. And you saw the South Park deal they just cut, where they're spending hundreds of millions of dollars to move South Park over from what was Max, now called HBO Max, thank God. moving it back over to or moving it to for the first time, Paramount Plus. I think it's a small sign of the post merger strategy, which is David Ellison is not just doing this to cut cost and squeeze more juice out of this existing company.
13:56Rich Greenfield:His goal is to build something significant with a very long term perspective, which is going to require a lot of investment. What do you think the contours of that look like? Is it something where he's primarily interested, kind of like David Zaslav at Warner's now, where it's like, look, the thing that's going to work for us is owning a film studio and owning a streaming service. Everything after that is after the fact. I mean, they have CBS, which is a very big NFL carrier, so that's a big business, but that's kind of it. Do you think he sells off everything that's not those things? I think it's harder in this case because so much of the cash flow, they don't have that cash cow that even HBO's core business still is today, or even the TV business is built up enough at Warner Brothers that I think you can sort of sustain.
14:47Rich Greenfield:I'd be very surprised if you spun off these networks. I mean, look, who knows over a five-year timeframe what's possible, but I think the initial is, hey, we need that cash flow and we're going to use that cash flow to reinvest, build out. I would be shocked if you didn't see more sports on CBS. I mean, I think as Brandon Ross, my partner has talked about, like, I think there'll be a contender for UFC rights. You know, David Ellison, you've seen him multiple times in the past year, sitting in the front row cage side with Ari Emanuel, with Dana White. So and Donald Trump. I look, I don't disagree there on politics, but I also think he likes the content.
15:28Rich Greenfield:And so I wouldn't be surprised whether it's a UFC deal. You saw the South Park. I think he's going to spend a lot of money. He recognizes David understands tech, right? Like he understands what and the tech North Star, whether we're talking about TikTok or Meta, Facebook, whether we're talking Netflix or Spotify, it's all about time spent. I think David gets that Paramount Plus needs a heck of a lot more time spent. The only way you're going to get there is a better product and more content. So you got to my last note, which is he, his advisors, and now he himself, you know, last year when they officially announced this deal, said, oh, I have a tech background.
16:06My dad's Larry Ellison. I worked with Steve Jobs, although I think he was a teenager at the time. And so I understand tech and media and how they meld together. But this is not a tech play. This is a make your service better by adding more stuff play.
16:22Rich Greenfield:I disagree. I mean, I think if you were to look at the actual interfaces, go on to Disney Plus right now. Like literally, if you were on your phone. No, no, no. But you and I actually agree. You've said the same thing. You can improve the interface, but unless you have stuff for people to watch, it doesn't matter. Unless you have data for them to crunch, it doesn't matter. Correct. I'm just saying when I go on to like, I'm literally going to do it as we're talking. But I go on to the Disney Plus app on my phone. I open it up and what is still shocking is how much of the real estate like I literally am being shown the wonderful real world of gumball on the hero image.
17:01Rich Greenfield:And then I see seven boxes for Disney, Pixar, Marvel, Star Wars, Nacho, Hulu and ESPN all as boxes like it is so not a it's not targeted to me at all. It's not content forward. There's no video like this is not as easy. Everyone just thinks, oh, throw up a streaming service. They're not all the same. This is like when Hulu launched and everyone said, everyone who wasn't, everyone who was running their own streaming services, the CBSs and NBCs of the world were like, look, anyone can run a streaming service. And if you give away all this stuff for free, it's no big deal. But Hulu had a much better interface as well.
17:39When we come back with Rich Greenfield, a look at ESPN's long overdue streaming launch.
17:50This episode is brought to you by Welch's Fruit Snacks. Back to school season can be tough on parents, but choosing a snack you and your kids can both get behind doesn't have to be. Stock up on Welch's Fruit Snacks, made with whole fruit, and now made with no artificial dyes. It's a snack kids already love, and one you can feel good about giving them. Go back to school with Welch's Fruit Snacks, now made with no artificial dyes. I get so many headaches every month. It could be chronic migraine, 15 or more headache days a month, each lasting four hours or more. Botox, on a botulinum toxin A, prevents headaches in adults with chronic migraine.
18:30It's not for those who have 14 or fewer headache days a month. Prescription Botox is injected by your doctor. Effects of Botox may spread hours to weeks after injection, causing serious symptoms. Alert your doctor right away as difficulty swallowing, speaking, breathing, eye problems, or muscle weakness can be signs of a life-threatening condition. Patients with these conditions before injection are at highest risk. Side effects may include allergic reactions, neck and injection site pain, fatigue, and headache. Allergic reactions can include rash, welts, asthma symptoms, and dizziness. Don't receive Botox if there's a skin infection.
18:59Tell your doctor your medical history, muscle or nerve conditions, including ALS Lou Gehrig's disease, myasthenia gravis or Lambert-Eaton syndrome, and medications, including botulinum toxins, as these may increase the risk of serious side effects. Why wait? Ask your doctor. Visit BotoxChronicMigraine.com or call 1-800-44-BOTOX to learn more. When you're 7-Eleven's hottest fire chicken sandwich, people think you're intense. Well, yeah, I'm hot! So, yeah, intense. Want to see if you can handle the heat? Then try me. With pickles or spicy mayo and jalapenos. Oh, and it's all just$4.99. That's a deal almost as hot as I am.
19:37Almost? Sweets? No. Spicy? See for yourself. $4.99 and only at 7-Eleven. Followed through 825-46. Participating stores only while supplies last. Visit store for full terms. And we're back. You mentioned Disney. Let's talk about Disney. In the next few weeks, before college football and the NFL starts, ESPN will finally be a service you could buy as a standalone streaming service. Again, something we've been talking about for a decade. If they'd rolled this out in 2015, we would have said, holy shit, this is a really big deal. Is it a big deal in 2025?
20:12Rich Greenfield:You know, at$30 a month, I don't think this is a huge deal. My guess is it gives them flexibility to start packaging this with other services. I mean, you know, the reality is, you know, the$30 a month just for ESPN. Look, I am sure there are, you know, if you talk to anyone at Peacock or anyone at Paramount Plus, they'll tell you they get subscribers just to sign up for football to access their services. Like, just like you said, they sign up and then cancel at the end. And there are definitely people signing up and canceling. So is Disney missing out by not having any DTC offering? And Fox One is launching at the same time.
20:55Rich Greenfield:So I think that's worth mentioning that. I'm going to ask you about that next. But the two holdouts are finally entering the DTC arena. And I think that's because they recognize, hey, this is happening. We can either participate and get some subscribers. Not a lot. It's probably, you know, low to mid single digit millions. It is not millions and millions. And they don't want their existing cable TV subscribers to swap over. They want to keep those folks there. They want to give them incentive, which is why one of the reasons it's priced at 30 bucks. It's not cheap. Correct. They do not want massive churn.
21:28Rich Greenfield:Now, if you end up taking the Disney Plus, Hulu and ESPN bundle, do they really care if you give up on your core linear TV subscription? Probably not. But like the reality is, remember, they're giving everybody who already subscribes to the multi-channel ecosystem. So 65 million plus ESPN subscribers are going to get this new ESPN app at no additional cost. And so you're really talking about who are the people you're not subscribing to the big bundle. You are a pretty passionate sports fan. You're willing to spend$30 a month for sports. My guess is it's just a small number. So there's nothing wrong about it.
22:07Rich Greenfield:It actually makes sense to do it, but I don't think at the end of the day it is a huge needle mover. Again, what's going to matter to Disney stock is their theme park business and their cruise ship business. Like that being better than expected because of the state of the economy and what's happened with tariffs not being as problematic as feared a few months ago. That is far more important to Disney than what happens with the ESPN streaming rollout. And I think I know the answer to this, but Disney is likely to do a deal with the NFL again any day now. The NFL would take a stake in Disney, right?
22:43They get an ownership stake in ESPN. Well, that's a big question.
Read the full transcript
22:48Rich Greenfield:Is it in – I mean I think there's three choices. Is it a stake in ESPN? Is it a stake in ESPN and ABC, the broader media networks business? Or is it in Disney, the parent company? There's been varied reporting. We'll see what ultimately plays out. And, you know, I can't help but wonder, you know, as you think about the transition from Iger to somebody else, whether we're setting the stage for a spin out of their linear TV assets, much like we're seeing from all the other companies in the space. But my assumption is this can't be that important because the NFL has been trying to get someone to take the NFL media assets that it has for years.
23:31And it's tried to tie it with other deals, hasn't been able to make it happen. The NFL, as you know, is the most popular thing on TV, hands down. Nothing is remotely close, sports or anything else. Um, thus I can't imagine this, that ESPN NFL deal, however it gets structured. Is that meaningful to ESPN? Am I missing something? When you say meaningful, um, you know, the NFL was, at least from what I know from talking
24:01Rich Greenfield:to their senior team, they never wanted to sell NFL media, which is what they're doing now. They, they really wanted a partner. They really wanted to joint venture it. They have a joint venture with NFL content creation with Skydance Sports actually going back to Paramount. But they wanted to recreate some form of partnership. I'm guessing they couldn't, to your point, Peter, after four years of looking, I'm guessing they just couldn't find the partnership they wanted. And they were, in their minds, probably seeing the same things that you and I were talking about at the beginning of this podcast episode, which is the ecosystem is finally collapsing.
24:39Rich Greenfield:Like there is no there's no debating. People used to call me. I think you actually brought up once during an interview of me, like people called me a heretic for talking about good luck bundle. No one dismisses the idea that the bundle is fading away now. And so. So any deal is better than no deal. You take it. Look, my guess is this is probably the only deal that probably was possible. It's with an important partner. I think they clearly want ESPN's direct-to-consumer to be successful. This hopefully helps that. The only thing I'm confused about is what is the long-term? How do you get liquidity if you're the NFL?
25:18Rich Greenfield:If you build value by taking ownership of ESPN today, and this is why we wrote the concept of will this be a spinoff in a post-Igur world? because I just can't imagine that the NFL wants to be a minority investor in a Disney subsidiary for the next decade. Fair enough. We'll see. Fox, like you mentioned, they're launching Fox One. I think people might be a little confused because it's everything Fox. It's not like the ESPN streamer where it's just ESPN. It's everything Fox. It's like a YouTube TV and it only comes with Fox cable networks. It's the skinniest bundle. So the main assets, there are Fox Sports, which is really the NFL, and Fox News.
26:03I'm sure there is a lot of overlap between people who watch Fox News and people who watch football on Fox, but it's not complete. Do you think Fox thinks this is primarily a product for people who want to watch football, or do you think it's primarily for Fox News super fans or Fox News fans? My belief, going back to what we just talked
26:24Rich Greenfield:about it at ESPN. I think this is a pretty limited offering for a sports fan. Now, sure, you know, if you were to bundle ESPN and, you know, the Fox one app together, do you, you know, and you actually, if you, the ultimate bundle that I actually believe is if Paramount plus and Fox one bundle together, that would be the most interesting bundle of all of them, because then you basically get all of Sunday afternoon football between the two services. So, yes, you have to switch back and forth. But like those two together would be an interesting combination that I wouldn't rule out. So does that lead you to believe that Fox thinks that this is if it's not really a sports solution, that it really is a Fox News solution?
27:07A hundred.
27:08Rich Greenfield:Like, I just think like there are passionate Fox News viewers who probably don't like a lot of what else is on television. organization this is a fascinating way to get fox news sure you get fox sports like you'll get some incremental content too you'll get your fox local news too right because you're getting your local tv station i assume as part of this like you know in terms of what content is in there i actually think this is definitely i think you'll see more uptake from fox news viewers and then And there'll be some people at Fox. Like, again, if there's people who take Paramount Plus for CBS, there are certain people that'll take Fox One to get access to Fox Sports.
27:51Rich Greenfield:It's even more comprehensive than what we were just talking about at Paramount Plus for CBS. And in the old days, you would have said Fox News, all TV news, has a very old audience, only gets older. The idea that people in their 60s, 70s are going to get a streaming solution, that doesn't make any sense. But maybe that's not true in 25. Maybe it's actually, you know, I think Roger Ellis is laughing somewhere. Somewhere Roger Ellis is looking down and laughing at all of us going, I told you, you know, look, if you think about this asset that they've built politics, you know, I don't care what your politics are.
28:29Rich Greenfield:It is nothing short of stunning what has happened at Fox News in terms of the amount of consumers that are flocking to it. The fact that it's regularly beating two of the four broadcast networks in prime time, that tells you everything you need to know. This is not Fox News looks more like a broadcast network, but gets a fraction of the ad dollars. And you're seeing the brands like if you just turn on Fox News for you watch Fox News for several hours now, you'll see brands and advertisers that were definitely not there a year ago. Sure, but you think their audience will be comfortable streaming.
29:03They already are streaming or they're going to be – someone will walk them through how to attach a box to their TV or how to turn their smart TV into something they can get Fox News.
29:11Rich Greenfield:I think streaming has become pretty normalized across a pretty, you know, when you look at how many subscribers Netflix now has, I don't think streaming is any more some elitist thing. I think it's pretty normalized. And to be honest, though, I think the part you may be missing, Peter, is I think the Fox News audience is also widening out. Like as they expand, it is not just the over 60. It's still old. I'm not going to deny that it's not old, but it is certainly widening out. And I think as you make it available to people on streaming, you may pick up some younger people that weren't otherwise going to be.
29:45Rich Greenfield:And again, you don't have to do it for an entire year. Maybe it's more interesting during election years. Like it creates flexibility. And I don't think there's a whole lot of downside. I mean, the downside for both go back to your ESPN comment earlier with both ESPN and Fox One going direct to consumer. The last two holdouts on D2C streaming. A few years ago, we might have said, oh, my God, this is going to accelerate the demise. Scary to do it. Like, you know, Iger would say, like, we're going to do this, but we're not sure when. If you think about Iger kind of his first tour of duty, not his second.
30:16Rich Greenfield:There was a lot of squeamishness about when to do this. now we're looking at this ecosystem, linear TV viewership is, you know, especially cable networks are in free fall. Broadcast is certainly under pressure. I think the idea that you're going to quote unquote, make it worse. I think we're just past that now. And especially now that you're bundling these into the linear cable bundles, the streaming services. I think if anything, like this just makes sense. And there's really, I don't think you create more harm by doing this. I think it's just, hey, if we can pick up some incremental subscribers, that's good and we'll have more information.
30:54Rich Greenfield:We'll learn some more. We'll do better advertising. There's really not a lot of reason not to do it at this point, even if it's not massive subscriber-wise. Like you said, cable is in free fall. All the basic cable networks are in free fall. Everyone who owns them is trying to sell them either directly to another buyer or they're trying to, in the case of Comcast, trying to bundle it up as a publicly traded stock. who is a buyer for cable networks again we have comcast warners a &e which is disney and hearse they're all come come buy our stuff they're for sale um paramount you don't think they're going to sell but other people do i love the question you ask peter i think it's really important because i don't think that there's enough people talking about this topic so many of the investors i deal with or even industry executives i talk to go oh you're going to see paramount just buy the studio and streaming from Warner Brothers, you're going to see, maybe you'll see Versant merge with some of the paramount cable networks.
31:53Rich Greenfield:Like everyone just keeps throwing out like, hey, let's just merge all this stuff together. Let's just step back. I think David Ellison and Larry Ellison have a much bigger plan than aggregating more linear cable networks. Like I would be surprised if that was the strategy. Like Larry's certainly part of the investor group trying to buy TikTok. Like there's like 3D chess and 4D chess. Like I just think there's a much bigger plan that Larry and the Ellison family is probably thinking about that goes well beyond just aggregating more legacy media assets. Comcast, I don't know. Like there's, if you think about like - The messaging, the public messaging is once, you know, We're going to get rid of all these cable nets, but then those cable nets can go acquire other cable nets and they'll have some sort of – they'll be – through scale, they'll be a standalone business and that'll be a good idea.
32:48Hard to believe, but –
32:50Rich Greenfield:Well, just step back. You've seen Time Warner. If you think about Warner Media merged with Discovery, hasn't created value. If you think about CBS and Viacom, which became Paramount, hasn't created value. If you think about Disney, which bought Fox, mostly their cable networks, hasn't created value. Like, show me the transaction. We're putting legacy assets that are in secular decline. Sure. Maybe, you know, my partner, Brandon, would scold me and say, well, it might have been worse. Like, imagine Discovery. It might have been worse. Sure. I mean, that is a possible reaction. But that's not compelling for a buyer.
33:29Rich Greenfield:I hear you. It's a reason to be a seller. I get the seller piece. But as a buyer, there's lots of things you could buy and lots of places you could go. And the idea that buying more of these assets so that you have more cost to cut doesn't seem really compelling. And I could see certain like could Versant, you know, the new NBC spin out could, you know, Versant could could they go after something like Food Network owned by one of like individual networks? Sure. I think there's possibly a story of like individual networks might find more better homes. But the idea of large-scale mergers, when every single large-scale merger hasn't created value, that's a lot harder to digest.
34:11When we come back with Rich Greenfield, anyone who owns a cable TV network is trying to sell it. So where are the buyers?
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36:11Almost? Sweets? No. Spicy? See for yourself. $4.99 and only at 7-Eleven. Follow up through 825-26. Participating stores only while supplies last. Visit store for full terms. And we're back. The answer to my question that I sometimes hear in terms of who's a buyer is, well, private equity. They're good. You take the things private. They can manage decline. They can strip out costs. They can just basically turn these things into money-making husks, which they kind of already are, but they can just do it efficiently and brutally, and they can engineer it in a way that makes sense for them.
36:43Rich Greenfield:So let's attack that head on. Let's attack that, because I hear the same thing a lot, Peter. And they point to DirecTV, and they go, oh, my God, look at DirecTV. Well, DirecTV is really different. DirecTV is a subscription business that benefits from all of the flexibility of the bundling that we're talking about, like being allowed to make smaller bundles. This is the reason that DirecTV is relevant is because they basically are owned by TPG now. Correct. Yeah. And it's been a fantastic transaction. TPG has made their money. Like this has been a fan. I mean, I think it's looked at as like an incredible transaction for TPG.
37:18Rich Greenfield:And everyone goes, oh, well, just do that for cable networks. But the problem is the reason why TPG has been so successful with DirecTV is the exact reason why nobody would want to do this with cable networks. I mean, look, just we have a case study, right? This company called Sinclair that bought Diamond Sports RSNs and then those RSNs lost distribution. And for your listeners, Diamond Sports went from two billion of EBITDA when it was owned by Fox and then through the Disney transaction was sold to Sinclair. and within four years went bankrupt from$2 billion of positive EBITDA because they lost distribution.
37:57Rich Greenfield:And so the problem with all of these cable network companies, TV companies, being owned by private equity is you have to be really comfortable about what carriage looks like in the future. The content is king, distribution is king, debate, which rages on as long as I've been doing this, kind of the pendulum shifts. But you're saying in this case, you'd rather be a distributor than a content owner, at least a cable network TV content owner that needs a YouTube or a charter or a Comcast to get to people? I think it's scary to be these standalone cable networks trying to have just enough sports so they don't get dropped.
38:37You know, consumers having far more
38:40Rich Greenfield:choice. You know, we're talking about ESPN direct to consumer and Fox and sure, maybe the price points are high today, but you'll probably see some bundling that brings the price down. And it just seems very scary to be in a world where you're 100 percent tied to effectively your distribution, because, sure, you have advertising. But if you have less distribution and you're on less wide and wide in terms of total number of subscribers, your advertising goes down, too. And advertising for the whole linear television business is already in secular decline. And so you're not just managing secular decline.
39:14Rich Greenfield:You're literally trying to stave off being, I don't want to say dropped because I think dropped has such like a negative connotation. I'm not saying any of this stuff gets dropped, but bundles are certainly changing. And I think that's the single greatest thing that isn't being talked about is you're seeing a lot of bundling flexibility in all of these deals. Look at the packages that DirecTV has rolled out. Look at what Charter is doing. Like there's a lot more flexibility being offered by or being forced, I shouldn't say. So we're not going to drop a channel, but we're certainly going to make it so you don't have to take this channel and that that gets rid of its value or diminishes its value.
39:55Correct.
39:55Rich Greenfield:You can take smaller bundles of packaging and that if you're thinking about, you know, levering up and buying these cable networks makes it very hard. I mean, that's a scary proposition for a private equity firm. We've been – we're not spending a lot of time on YouTube and Netflix who have won the streaming wars, right, by far. They have one thing in common. Which is? Lots of content. Massive amounts of content. Lots of content. And they're not buyers. Netflix has made a handful of acquisitions over its lifetime. YouTube essentially zero. They're quite clear they don't want to buy linear TV networks.
40:35They're crushing them. Why would they want to own that? Is there anything that in this consolidation that you do see either one of them buying as their power increases and as the pricing gets lower and lower for them to pick something up? I mean, I would never say never.
40:49Rich Greenfield:But unlikely. Well, I think for YouTube, I would put it at zero. Like I just – I actually think you can say YouTube. They've tried content. You know, they just did this joint venture with Range Media. I'm not – you know, I think I need to learn more about exactly what the plan is. But they are not, I think they've been very clear that they are not in the content creation business themselves. There is a world of creators and with AI, they're empowering. And you see the strength of YouTube even in the results last week. You look, Netflix, look, I think Netflix will always be opportunistic about IP.
41:24Rich Greenfield:You know, they obviously didn't bid, at least didn't bid aggressively on something like F1. Right. There's always, you know, I think there was a lot of people when Drive to Survive was successful. I can't tell you how many people were like, they should just buy F1. Not the licensing the rights. They should just buy F1. They looked at it for a second. They did. And, you know, look, they didn't buy WWE, but they did a 10-year deal with a 10-year option. You know, like that's not an acquisition, but that's a large scale 20-year potential partnership that looks very different than a lot of things.
41:59Rich Greenfield:They just did this deal with TF1 to license live channels. Like they test a lot of things. They, you know, it is a test and learn company, but I would be surprised if you think about how much content they've had over the last decade. And sure, engagement and they were they owned up to it. I think what they do will very few companies, which is owning up to sort of challenges on the engagement side. If engagement doesn't improve organically from all of their investment over the course of the next 12 to 18 months, maybe your question actually change or my answer to your question will change. I think they feel confident enough about their lineup.
42:36Rich Greenfield:And you saw it with Happy Gilmore just this past weekend in terms of just the scale of the success. I don't think they feel the need to make an acquisition. But look, if they can't get engagement up, I don't think there's religion of they would never make an acquisition of IP. Last question here. Politics, we've been dancing around it a little bit. I don't want to relitigate the Colbert deal. But – and I've seen you write about this. You're a fan of the economics of late-night television? Yeah. I think the answer is that they cut it because it's a bad business for them. They didn't want to spend any more time dealing with it.
43:15Let's leave that aside. But when we're talking about these deals that aren't being made, these merger deals, you'll note this all the time. You'll say, well, I don't know how this deal between any basically two companies happens in this antitrust environment. And then specifically for a lot of the media companies, they'll say, well, Donald Trump is very angry at Comcast or Disney. And basically most media companies, the one exception used to be Fox when Rupert Murdoch wanted to sell most of his stuff to Disney during Trump's first term. Trump said, oh, it's a great deal. It's great for America.
43:47Trump is obviously now suing Rupert Murdoch. Is there a world where any deal – I mean can anyone sell or buy a meaningful media asset while Donald Trump is president?
43:58Rich Greenfield:I think it's going to be challenging. I think it's going to be very challenging. I mean, you saw him lash out at The View last week, which is owned or created by Disney ABC. You know, Murdoch, I'd be shocked to see Murdoch cave and write Trump a check anytime soon. He doesn't seem the type to settle. So I don't know. I mean, look, right now, there seems to be a pretty substantial ideological focus of reforming media, especially broadcast TV media that the government is pursuing. I think that will make it harder. Now, again, not all transactions require FCC approval, but your question is sort of broader than just FCC.
44:46Rich Greenfield:You know, with the DOJ or FTC, a, you know, Warner Media doesn't have broadcast TV assets. Could a Warner, you know, media, you know, could a global linear networks merge with somebody or be acquired by private equity? Now that wouldn't be an FCC transaction, but would the government to prove it? Those are great questions. I mean, look, I think there's some clear and obvious companies that would be very challenged. Comcast being sort of front and center. You've already got the FCC saying we're investigating Comcast and Disney for DEI reasons. So basically they're saying, this is a sword we're going to hang over your head if we want to use it, is the way I interpret it.
45:24Look, I think it's challenging for all. Everyone, when businesses are under pressure and in facing secular decline, I think every banker in the world will point to, well,
45:38Rich Greenfield:scale up, right? Scale fixes, you know, scale gives you the opportunity to cut costs and sort of stay alive, kick the can down the road and stay alive a little bit longer. I don't think that's going to be. First of all, I'm not sure it really helps in this case, going back to where we started before. But even getting these deals approved is certainly not going to be easy. It can be very challenging over the next few years. What did we learn today, Rich? There's a lot of people who want deals to happen and maybe not a lot of incentive for those deals to go through. Is that what we've concluded at the end of this hour?
46:09Rich Greenfield:Well, look, in the meantime, you may have to just sort of, you know, pursue a strategic reshuffling of your assets. You know, think about where can you actually find growth? You know, are you managing your existing assets to harvest cash? Can you find new things to invest in? I, you know, I think the one question everyone needs to ask, Peter, is what's the North Star? What are you actually trying to achieve? Are we trying to compete to be a winner in streaming? Are we trying to just maximize the value of our legacy business as it shrinks? Like, what is the I would love every single media CEO to come out and say, like, over the next five years, like, this is what we're trying to do.
46:54Rich Greenfield:Like, companies like Netflix and Spotify are very clear. They are trying to win your time spent like they want more customers, happier customers at higher pricing. Like, it is very clear. And they are still can position themselves, especially Netflix, as a disruptor. We are taking share away from existing businesses. Correct. I want to know when you look at all these pieces and how many different businesses they're sitting in the new world and the old world and they're balancing. What are they actually like? What is winning? I hope to get a very clear answer from David Ellison as he sort of unveils the plan after I think it's August 7th or whatnot.
47:30Rich Greenfield:But the other companies also like it would be great to actually know what is the long term plan. I think we don't really get a sense of that. Fox, actually, I'll give them credit Fox by not sort of pursuing the Netflix like because even Fox one is not Netflix like it is a very limited scale endeavor. Fox is very clear. It's a lot less clear than a lot of the other companies. Well, no one's – I mean, I never say never. I'd be very surprised if any publicly traded media company, their CEO comes out and says, we're just trying to manage decline. That's what we're doing. I mean, maybe that's not the wrong answer, right?
48:11Rich Greenfield:I mean, sometimes doing things that you're not good at, you know, we had a funny graphic that we've used for years of like, you know, media companies trying to be streaming companies. And, you know, we have an image that we created of a guy walking into a bicycle shop and asking the person behind the desk, could you build me a rocket ship? And, you know, it's like you're not trained to do this. Like these are very this is a very different business. Streaming D to C is completely different than that legacy business model that we spent, you know, 15 minutes at the beginning discussing why it was so unique and special.
48:47Rich Greenfield:This is a completely different world. It's a great world for us to talk about. We'll have you back. Disruption is good. It's ridiculous it has taken this long. Thank you, Rich Greenfield. See you soon. Thank you, Peter.
49:02Thanks again to Rich Greenfield. Thanks again to Zach Mack for stepping in to edit and produce this episode. Nice to have you back, Zach, for a minute. Thanks to our advertisers for supporting this free show. And thanks to you guys for listening. Stay cool. See you soon.
49:23Thank you.
From the publisher
A decade ago, Disney CEO Bob Iger freaked out the media industry by acknowledging something many of us saw coming — his previously unassailable TV business was starting to erode.
But even with a 10-year warning, today’s moguls seem unable to copewith 2025’s reality: The pay TV business is permanently eroding, and there’s nothing in its place that’s likely to generate the same kind of revenue and profit.
But the people who run Big TV are trying to find answers, anyway. So I asked Lightshed analyst Rich Greenfield to talk through some of their moves. What will David and Larry Ellison do once they finally buy Paramount? What are the prospects for ESPN’s soon-to-launch streamer? What about Fox’s soon-to-launch streamer? Who’s going to buy all of these ailing cable TV networks that are coming on the market? And what kind of deals - if any - can get done in the Trump 2.0 era?
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