Name: Analysis: What the Future Holds for TV News Divisions After Bob Iger’s Comments
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Analysis: What the Future Holds for TV News Divisions After Bob Iger’s Comments

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They were once considered the crown jewels within a media empire, but the fate and future of TV News divisions got a lot shakier after Disney CEO Bob Iger’s latest comments regarding his company’s linear television business. During an interview on CNBC’s Squawk Box with David Faber, Iger said that the linear television business comprising ABC, local stations and entertainment-focused cable networks is no longer considered a core business for The Walt Disney Co. “Yeah, there’s clearly creativity and content that they create that is core to Disney, but the distribution model, the business model that forms the underpinning of that business, and that has delivered great profits over the years, is definitely broken,“ he said. “And we have to call it like it is, and that’s part of the transformative work we’re doing.” That means these businesses could be for sale, and a divestiture from linear by a media conglomerate like Disney might make all those who work at ABC News, CBS News, NBC News and CNN nervous about what the future would hold for them.Linear TV’s decline has been well documented as a result of a rapidly shrinking pay TV subscriber base as consumers migrate to other forms of entertainment, including streaming.Pay TV’s penetration within U.S. households has shrunk to 58.5%, its lowest point since 1992, with an expected Pay-TV floor of between 50 million and 60 million U.S. homes, according to MoffettNathanson. But even those estimates are considered conservative, with the final numbers looking even worse than what has been predicted.The linear business’ primary source of revenue is the carriage fees it gets from pay-TV providers who pass on the costs to its subscribers. However, a shrinking subscriber base spells doom for these distributors and the owners of these linear channels.Advertising is another source of revenue for the linear business, but a shrinking subscriber base means lower CPM rates and fewer sales that advertising departments can work with.This is not good news for the news divisions, which recently have had to do more with less. They rely on this revenue for their broadcast and newsgathering functions.Yes, certain programming like the morning shows still bring in a lot of money to cover those costs. For instance, ABC’s Good Morning America brought in $350 million to $375 million in 2021. However, the glory days of unchecked expenditure, mega salaries for its talent and executives, vanity reporting projects, sizeable on-location staffs and bureaus all around the world may be long gone.Without the safety net of Disney’s expenditure chest, ABC and ABC News, should they be bought by a smaller media conglomerate or choose to go at it alone, can expect an even leaner operating structure.Such a scenario would not be good when looking at the role these news divisions fill within the journalism space, especially considering the newspaper industry’s continued collapse and shrinking influence in playing the watchdog role within local communities.The options for free independent media are declining, and Disney’s potential split from its linear business further diminishes consumer options and limits what journalists can cover.Iger’s next moves are certainly being watched by executives at Comcast, Paramount Global and Warner Bros. Discovery, who may emulate his actions and let go of jewels now looking like coal.This is an analysis piece.&lt; Previous ArticleNext Article &gt;Magazine + iPad AppSubscribeBuy IssueMagazine + iPad AppSubscribeBuy Issue

They were once considered the crown jewels within a media empire, but the fate and future of TV News divisions got a lot shakier after Disney CEO Bob Iger’s latest comments regarding his company’s linear television business. During an interview on CNBC’s Squawk Box with David Faber, Iger said that the linear television business comprising ABC, local stations and entertainment-focused cable networks is no longer considered a core business for The Walt Disney Co. “Yeah, there’s clearly creativity and content that they create that is core to Disney, but the distribution model, the business...

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Analysis: What the Future Holds for TV News Divisions After Bob Iger’s Comments

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