MARY LOUISE KELLY, HOST:
Cable TV is struggling to adapt to the age of streaming services. The latest exhibit - the media conglomerate Comcast says it plans to spin off all but one of its cable channels into a new, separate company. Meanwhile, if you've cut the cord, you may have noticed more advertising on Disney+ or Amazon Prime Video or Netflix. Maybe you've even subscribed to a streaming service that serves you more commercials because it's cheaper. All this raises a question as cable TV tries to adapt to the future of streaming. Is streaming looking more and more like cable? Two people who know a little bit about that - NPR media correspondent David Folkenflik and NPR TV critic Eric Deggans. Hi, you two.
DAVID FOLKENFLIK, BYLINE: Hey, Mary Louise.
ERIC DEGGANS, BYLINE: Hey.
KELLY: So this latest thing that I'm trying to wrap my head around - Comcast says it plans to move a bunch of cable channels, including MSNBC and CNBC, into a completely separate company. But NBC, the network, stays where it is. David, what just happened?
FOLKENFLIK: So let's remember Comcast is a telecommunications and entertainment conglomerate, right? It's a huge cable provider, and broadband provider. It owns amusement parks and owns a bunch of TV properties. Well, right now it's just spun off all of its cable channels but Bravo. So, you know, MSNBC CNBC, yes, also the USA network, Golf Channel and some others - these are not part of what Comcast sees as its digital future. It's got this streaming service called Peacock. Together, all the other cable networks, except for Bravo, contributed just 2% of the viewing hours on Peacock. They still make a lot of money. And, you know, Comcast is sending them out into the world debt-free in this separate entity. But, you know, all signs point downward for them, ultimately. In this era of cord cutting, people are just severing those bonds.
KELLY: Eric, jump in because I'm trying to still wrap my hand around it. And specifically, what does it mean for those of us just trying to watch TV?
DEGGANS: Yeah, you're not alone. Well, I don't know what this will mean initially because this deal is going to take a year to finalize. And I think a lot of the work's going to be behind the scenes, and viewers won't necessarily know it. But we're in a situation or they were in a situation where they were kicking a lot of those profits, and we're hearing some reporting that CNBC and MSNBC alone might make $1 billion a year in profits. They were kicking that to a company that was investing in streaming.
So now they're going to have that money to try and figure out perhaps how to stem cord cutting and improve cable TV so that more people might stay with it. It could be research and development for the whole cable industry because people are going to be watching what they do. For viewers who watch MSNBC, once they sever their ties with NBC News, maybe we'll see some anchors disappear. Maybe we'll see more of a focus on liberal ideas because they'll be freed from NBC News standards. There's a lot of possibilities there.
KELLY: Let me stay with you one more second because I want to ask about another news story. This is also about streaming. Disney CEO Bob Iger - I was seeing on a recent earnings call, he talked about how his company is trying to steer new subscribers towards the ad-supported tier of Disney+, which kind of blows your mind 'cause not that long ago, being ad-free was the whole pitch of streaming services. What is the thinking here?
DEGGANS: Well, for the companies, they make more money on people who are on these services because they have two revenue streams. They get the subscription fee, and then they also get the money that they make from charging advertisers to reach these people. It's also easier to raise the costs. If you want to increase revenue, you can maybe show them more ads, or you can maybe charge advertisers more in ways that the subscribers wouldn't notice, so they wouldn't necessarily cancel their subscriptions. We had polling just a couple of years ago NPR did with Ipsos to show that people like the idea of ad-supported plans even when they don't use them.
KELLY: Interesting. Yeah.
DEGGANS: And so it makes sense that a lot of these companies would be trying to funnel people towards these types of plans.
KELLY: Yeah. OK, so a question for you both - David, I'll give you first bite. I'm just thinking long-term how this could play out. Cable trying to adapt - do we expect more moves like Comcast? Do we expect streaming to keep looking more and more like cable TV?
FOLKENFLIK: Yeah. I think that there's every prospect where streaming is going to look as though it's going to try to find a two-revenue system that is from ads and from subscribers. I think you're going to see cable trying to justify itself. The whole point of the cable universe was that you were bundled, and so you weren't able to not pay for ESPN even if you weren't a sports fan, which cost a fair amount of your cable bill, right?
And I think what you're really going to see is a lot of these companies that feel really big to you and me and the average person try to figure out if they can still go it alone. Paramount under new ownership at Skydance, Comcast itself, Warner Bros.-Discovery - all these places are looking at Netflix and Apple and Amazon and Disney and saying, we really don't quite have the size we need to take this on. How are we going to retool ourself? I love Eric's idea of R&D for these guys. But in reality, it could be a challenge of figuring out how to really appeal to viewers or having the slow decline that, for example, newspapers had under private equity as, you know, investors pick them off and try to harvest profits over the years instead of figuring out how to make it a truly viable and sustainable business.
KELLY: Eric, last word.
DEGGANS: Yeah. As a media critic, I've had to become a cynical optimist. So I'm hopeful. I always say new media doesn't kill old media. It just forces it to change. And the question is whether this new company is going to be trying to innovate, if it's the last attempt to try and figure out how to keep people engaged with cable or if they're just going to manage decline. And that's something we're only going to know by watching what they do over the next year and beyond.
KELLY: NPR's cynical optimist Eric Deggans and David Folkenflik. Thanks to you both. Happy Thanksgiving.
DEGGANS: Happy Thanksgiving.
FOLKENFLIK: Thank you. Transcript provided by NPR, Copyright NPR.
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