Media Companies Are Ready to Sell. Does Anyone Want to Buy?

[Don CT]

What I got from that article is that the streaming model is already broken

So if that model is broken, and the old fashion model is broken, what works?

 

[Loverofradio]

So if that model is broken, and the old fashion model is broken, what works?

Nothing is working. We’ve created fragmented audiences (think alternative rock), by having so many streaming platforms and shows, both sides are cannibalizing each other. There’s nothing that can be done until something merges. But who will merge? No one wants to buy tv, and streaming isn’t making money. There are no winners. All losers

 

[michael hagerty]

Nothing is working. We’ve created fragmented audiences (think alternative rock), by having so many streaming platforms and shows, both sides are cannibalizing each other. There’s nothing that can be done until something merges. But who will merge? No one wants to buy tv, and streaming isn’t making money. There are no winners. All losers

One more time:

Netflix is profitable. Has been since 2003.

Hulu is profitable. Has been since 2008.

Those are the big dogs of streaming.

Streaming is not broken. New competitors spent big—-perhaps overspent—-to achieve scale rapidly. That’s why they are not profitable.

There’s nothing broken about the streaming model. It’s spending billions so you can be mentioned in the same breath as Netflix and Hulu instantaneously that has caused problems for Max, Disney+, Peacock and Paramount+.

This is SO not hard, you two.

 

[Kelly A]

This is SO not hard, you two.

I agree. What part of being profitable is considered a failure to some folks? Talk about alternate reality.

 

[inari]

Are there enough religious operators out there to do such a thing

As station values continue to fall it will make it much easier for even small groups or churches to buy stations. I've seen small churches rally their members and raise millions of dollars to build a church building. Wouldn't be that much different to rally them to buy a station. The operating cost, if ran as non-commercial, can be minimalized. Their big expenses will include tower rents, electricity, music licenses, and a contractual on-call engineer. If a church has 300 families and they, on average, pledge $33/month that's almost $10,000/month to cover the operating expenses.

 

[Loverofradio]

I agree. What part of being profitable is considered a failure to some folks? Talk about alternate reality.

Call me in 10 years. You’ll see what I’m talking about

 

[michael hagerty]

Call me in 10 years. You’ll see what I’m talking about

So you have a crystal ball.

Cool.

I’m gonna go out on a limb here and say that in ten years, there are three or four profitable streaming platforms—-the two we have now and one or two more created by consolidation.

That’s not based on a crystal ball, just an understanding of fundamental business principles.

 

[radiofan2023]

I’m ready to see the playlist when TBN completes their purchase of kroq 😂

”Everyday is Like Sunday”, “You’re A God”, etc

 

[Don CT]

So you have a crystal ball.

Cool.

I’m gonna go out on a limb here and say that in ten years, there are three or four profitable streaming platforms—-the two we have now and one or two more created by consolidation.

That’s not based on a crystal ball, just an understanding of fundamental business principles.

I will go even further and say in 10 years the cable industry as we know it will be all but dead.

 

[Loverofradio]

One more time:

Netflix is profitable. Has been since 2003.

Hulu is profitable. Has been since 2008.

Those are the big dogs of streaming.

Streaming is not broken. New competitors spent big—-perhaps overspent—-to achieve scale rapidly. That’s why they are not profitable.

There’s nothing broken about the streaming model. It’s spending billions so you can be mentioned in the same breath as Netflix and Hulu instantaneously that has caused problems for Max, Disney+, Peacock and Paramount+.

This is SO not hard, you two.

So streaming is overall doing well because two companies are doing well? Netflix has seen a decline too in profit (Netflix Gross Profit 2010-2023 | NFLX), although not much. Just like you say things could go well in the next few years, there’s also a chance it can go wrong. So, the streaming model is working? But, you mention how companies are struggling to make profit after overspending. you just provided an example of something being broken. If McDonald’s and Burger King are only profitable. But the other major burger chains are struggling, that’s a problem. If something is forced to merge as a result of another company’s failures, in this case, more than a couple, this is an issue. Yes, it’s great that you provided two companies that are doing well, what about the rest? The model of local radio, tv and news paper is broken. Sure, Gray and Nexstar are doing fine. But when other companies are forced to eliminate jobs and cut costs and shutter local news departments, the overall business is broken. Not to mention, how can anyone not realize how much Hulu is eating away at Disney plus? Why do you think Fox hasn’t launched their own streaming service outside of Fox nation?

 

[Loverofradio]

As station values continue to fall it will make it much easier for even small groups or churches to buy stations. I've seen small churches rally their members and raise millions of dollars to build a church building. Wouldn't be that much different to rally them to buy a station. The operating cost, if ran as non-commercial, can be minimalized. Their big expenses will include tower rents, electricity, music licenses, and a contractual on-call engineer. If a church has 300 families and they, on average, pledge $33/month that's almost $10,000/month to cover the operating expenses.

I just don’t see today’s population of the country rallying to purchase every station in the country or almost

 

[Mark Roberts]

”Everyday is Like Sunday”

Now, that's evil!

 

[Loverofradio]

I will go even further and say in 10 years the cable industry as we know it will be all but dead.

So an industry that has survived DVDs, VCRs, will just die? Has anyone looked at how many streaming subscriptions there are? Will people constantly put up with the rising costs of streaming monthly subscriptions?

 

[Loverofradio]

So you have a crystal ball.

Cool.

I’m gonna go out on a limb here and say that in ten years, there are three or four profitable streaming platforms—-the two we have now and one or two more created by consolidation.

That’s not based on a crystal ball, just an understanding of fundamental business principles.

Please share these fundamental business principles with the streaming companies that are struggling now. They need your help

 

[michael hagerty]

I will go even further and say in 10 years the cable industry as we know it will be all but dead.

Cable, yes.

 

[Mark Roberts]

I'm not saying you're wrong about the observation, but I suspect a couple of factors play into appearing to favor religious broadcasters over commercial:

1. When modern religious broadcasters acquire a station(s), it a simple, straightforward cash deal. The paperwork required for review by the Commission is substantially less. Not to mention, considering an organization like EMF has been making lots of station purchases, their organizational and financial documents are already on record at the FCC. No need for additional passing-around for approval with the SEC, or other government branches.
2. Because EMF is a non-commercial entity, it's assumed they already operate within well-established rules, including the lack of ownership limits, so no review there either.

Agreed that all those are factors, particularly in the generic case. In the Los Alamos situation, the Albuquerque Board of Education (a/k/a APS) is also noncommercial, not subject to ownership limits, and is, arguably, more in the education business than the religious broadcasters are - though the latter would disagree, of course. Aside: whenever APS has had to demonstrate its legal authority to operate as an educational institution, it relies upon a territorial statute from the 19th century which, in New Mexico, can get interesting in the event of a dispute.

APS also has been active in expanding its network in recent years, so it also has familiarity with processes. I think they must have known that the Los Alamos petition was a long shot. But, even now that they've failed, there won't be a resulting email campaign that lasts for years. There might be other regulatory or legal processes involved.

In any event, it's not going to be the big guys that have compliance issues, whether commercial or noncommercial. It's the mom-and-pop operators, or the individual churches, or the third-tier liberal-arts colleges that run into issues because they can't dedicate staff to legal and regulatory compliance. The big guys can dedicate that staff, and usually can avoid pitfalls and pratfalls. (Though EMF doesn't seem to properly announce legal IDs for its Bay Area translators, but that's another story.)

A good point actually. It's pretty well known that the number of younger radio listeners has been on the decline for years. Older demos are more likely to be radio listeners than streaming. Given older folks are more likely to be religious and listen to the radio, the two end up hand in hand. Want a look into the future, especially for AM? Listen to SW bands. I doubt FM will become all religious in our lifetime, but I bet at some point 50% of major market stations will feature some sect of Christianity, whether it's Evangelical or Catholic.

The one encouraging sign might be that it won't be limited to Christianity. Sooner or later, other religious organizations will figure this out, too. The shortwave comparison is useful; notably, that its decline started after World War II and really has culminated only in the past decade or so. Whether Christian or something else, it's largely going to end up "preaching to the choir".

What freaks me out more than anything else is the possibility that one form of a religion becomes dominant and fuses with the state. (Look at Iran.) Then it's over for the republic and over for liberty. We seem to be getting nearer to that point, and what's been happening with broadcasting, particularly radio, is one indicator (among many, including a corrupt Supreme Court).

Don't worry, I'm not always this cheerful.

 

[Mark Roberts]

So an industry that has survived DVDs, VCRs, will just die? Has anyone looked at how many streaming subscriptions there are? Will people constantly put up with the rising costs of streaming monthly subscriptions?

Have you seen the fees that cable companies have been loading up on their customers? I posted about this last week: https://www.radiodiscussions.com/threads/iger-does-espn-deal.766033/page-3#post-6640021

Those fees are pushing a lot of folks into cutting the cord. Why should I pay a "regional sports fee" that I derive little benefit from? That's just one example.

For what I've been paying for the value-free add-on cable fees ($83.22), I could pay for at least eight streaming subscriptions.

 

[michael hagerty]

So streaming is overall doing well because two companies are doing well? Netflix has seen a decline too in profit (Netflix Gross Profit 2010-2023 | NFLX), although not much. Just like you say things could go well in the next few years, there’s also a chance it can go wrong.

I'm trying to figure out if you're intentionally making a bad faith argument or if this is how your brain actually works.

So, the streaming model is working? But, you mention how companies are struggling to make profit after overspending. you just provided an example of something being broken.

So, for a model to be not broken, in your view, it should provide profits for businesses regardless of how fiscally prudent they are?

If McDonald’s and Burger King are only profitable. But the other major burger chains are struggling, that’s a problem.

Which isn't the case and has no relevance to what we're discussing.

Here's an analogy: You decide that there's money in being a car dealer. There are two successful, profitable dealers in your town. One's been there for 20 years, the other for 15. Both have grown in that time to have 150 employees each, a 25,000 square foot showroom and keep 450 cars in inventory at all times.

You decide that you want to make as much money as they do right away, so you take every penny you have and borrow more on top of that to buy land, build a 25,000 square foot showroom, hire 150 employees and buy 450 cars from the manufacturer, plus pay the flooring costs and other expenses those competitors do.

You're in a hole they're not because they've had 15 to 20 years to retire any debt service from their startup, which was smaller and their growth more gradual than yours.

Now imagine that four other guys have the same idea you do and do exactly the same thing at the same time.

The established dealers are Netflix and Hulu. You and the four other new, overextended dealers are Max, Disney+, Paramount+, Apple+ and Peacock.

The model of being a car dealer isn't broken. The five of you were late to the game and burned cash to start big.

If something is forced to merge as a result of another company’s failures, in this case, more than a couple, this is an issue. Yes, it’s great that you provided two companies that are doing well, what about the rest?

Here's your takeaway: Four new competitors flooded the streaming market. They spent big to gain scale quickly. They put themselves underwater, but haven't taken Netflix and Hulu down with them.

The model of local radio, tv and news paper is broken. Sure, Gray and Nexstar are doing fine. But when other companies are forced to eliminate jobs and cut costs and shutter local news departments, the overall business is broken.

Now you're talking about linear TV.

Not to mention, how can anyone not realize how much Hulu is eating away at Disney plus?

I mean, Hulu was there first, so that's really backwards, but beyond that, you can probably expect Disney to roll Hulu into Disney+ sooner rather than later.

Why do you think Fox hasn’t launched their own streaming service outside of Fox nation?

You DO realize that this was you, yesterday, before I told you that ABC got Hulu when it bought 20th Century Fox, right?

"Fox (the company not the news network) did the right thing at the right time. They have their piece of the pie with Hulu. The Murdochs should be lighting their cigars constantly over the smart moves they made."

 

[KeithE4]

Sooner or later, other religious organizations will figure this out, too. The shortwave comparison is useful; notably, that its decline started after World War II and really has culminated only in the past decade or so.

I have to disagree as to the timing. Shortwave broadcasting thrived through the '80s, although I believe it started to decline in Latin America at least a decade before that (David, is this right?). But when the Cold War ended with the collapse of the USSR and its satellite (Iron Curtain) countries and the advent of the Internet, that was the beginning of the end for the major international broadcasters. Since 1991, it's been a rather rapid decline.

 

[Mark Roberts]

I have to disagree as to the timing. Shortwave broadcasting thrived through the '80s, although I believe it started to decline in Latin America at least a decade before that (David, is this right?). But when the Cold War ended with the collapse of the USSR and its satellite (Iron Curtain) countries and the advent of the Internet, that was the beginning of the end for the major international broadcasters. Since 1991, it's been a rather rapid decline.

Could be. I never had much interest in shortwave and haven't followed it that closely.