© (Jason Korner/Getty Images) Don't you love Tucker Carlson's racist story? If you're a cable subscriber, you're paying for it anyway. ((Jason Corner/Getty Images))
Let's say you hate Fox News.
You might think that satellite channels are undermining democracy by making unsubstantiated claims that the 2020 presidential election was stolen by Joe Biden.
You're probably sick of Fox star Tucker Carlson's blatant racism, not to mention his anti-masking and anti-vaccination statements that are bad for public health.
Or maybe you think Fox's desire to feed its audience is a lie its executives know about — like emails exposed by Dominion Voting Systems in a $1.6 billion defamation lawsuit against Fox – show that don't offer a channel. However, “news” is the mouthpiece of right-wing ideological myth-making.
From an economic point of view, it's good for us that Donald won this election.
CBS chairman and CEO at the time, Les Moonff, poked fun at Donald Trump's role in the 2016 election.
You won't get caught sponsoring one of Carlson's advertisers, like MyPillow, which fills the ad space between Fox News or the Supplement Bank commercials.
So boycott Fox News, maybe reducing advertising will encourage the station to change its behavior.
Fail. If you're a cable subscriber, you're definitely paying for Fox News whether you like it or not.
This important fact about how cable programming works is very important today for two reasons. One is that the Dominion criminal trial will begin in a Delaware courtroom.
(The trial was scheduled to begin Monday, but the judge postponed the trial a day to give both sides eleventh hour; otherwise, jury selection would end on Tuesday and the opening statement would begin.)
Another reason is that negotiations between Fox and some of the major cable systems are ongoing or will occur in the near future over the monthly fee the system pays to broadcast Fox News.
In the past, cable systems have largely complied with Fox's wishes; It is unclear what legal hurdles the companies will face in future negotiations.
One might be tempted to describe Fox's reliance on so-called freight payments as the dirty little secret behind Fox News' survival despite high-profile advertisers flying.
Over the years, it has become apparent that Fox was earning more than "membership fees" from advertising sponsorships. In its most recent financial report for the quarter ended December 31, Fox said it earned $1 billion in fees from cable programming partners but only $451 million from sponsors.
In its most recent full fiscal year, which ended June 30, Fox earned $4.2 billion in affiliate fees, compared to $1.46 billion from advertising. If Fox Cable advertising drops to zero, the segment will still report about $1.47 billion in operating income.
Fox Corporation. Fox News has not specifically disclosed the fees charged, but estimates can be made. The company reported that the news channel had 75 million subscribers as of June 30.
Industry reports put the fees it charges from cable carriers carrying Fox News at about $2 per month per cable subscriber, which equates to $1.5 billion in annual shipping costs.
Those numbers don't mean the 75 million cable viewers regularly watch Fox News — that's the number of subscribers claimed by the cable systems that carry the channel. A more accurate estimate is that Fox News may have as many as 3 million regular viewers. Another 72 million paid nothing.
In traditional consumer behavior theory, people who don't like or trust a product can simply vote with their feet by choosing not to buy it.
That's not how cable TV works. Fox News released impressive subscription numbers because cable customers typically don't have a choice. Fox News is one of those channels that considers cable a must-have show, so they bundle it into one easy cable subscription. (Including ESPN and CNN.)
It's entirely possible that Fox's declining credibility as a news channel will be reviewed, if not entirely annihilated, by the cable mogul, who will decide to either play hard by offering lower service fees or remove Fox News from the basic subscription tier altogether.
The operative term is "removed". The television industry is a thin stick to lean on when it comes to public interest. Most of its directors are ethical black holes. Consider, for example, how then-CBS President and CEO Les Moonves laughed at the appalling folly of the 2016 Republican nomination and its superstar Donald Trump.
"Man, it's amazing," Moonves told the audience at a media conference. “Who knew this circus would come to town? It might not be great for America, but it was great for CBS. [Laughs] Money comes in… It's fun.”
Moonves continued with a smile, “It's going to be a really good year for us. I'm sorry, it's horrible to say this, but come on Donald, go ahead. Donald's place in this election is good." Moonves left CBS in 2018 after allegations surfaced that he had sexually harassed and intimidated female employees).
Above all, the industry's greed for profit did not only affect political reporting. Sports fans in Southern California may remember the six-year hiatus from Dodgers games on most of the area's pay-TV services that began in 2013.
At that point, the Dodgers' new owners, led by Guggenheim Partners, inked a 25-year, $8.35 billion deal with Time Warner Cable to start the Dodgers channel. Time Warner thought it could pay off by selling the channel to other pay-TV channels in the area.
But Time Warner charged such high prices for the channel that it received a corporate no from all other pay-TV platforms, including Cox, Charter Communications, Verizon FiOS Fiber Services, AT&T U-verse, and satellite companies DirecTV and Dish. Time Warner Cable only serves about 30% of pay-TV homes in Southland, so Dodger games are actually tied for the other 70%.
The Dodgers snapped up the highest price they could get for TV rights and made the team such a jewel in Southern California's sports crown that the sky was the limit. Time Warner figured they could rip off other pay-TV companies for every penny, because really, what television service couldn't afford the Dodgers, no matter the price? The answer: everything.
The impasse was only resolved after Time Warner Cable partnered with Charter to create the Spectrum service. who lost fans that is.
Fox News isn't the only channel satellite subscribers pay for but don't watch. The basic cable layer contains a large portion of the channels that the average subscriber may never see or even know exist.
Consumer advocates have argued for years that giving customers a la carte cable choices instead of a one-size-fits-all would save people money.
Unfortunately, this nirvana turned out to be a dream. Broadcasters have ditched cable and created their own standalone subscription services, so what used to be bundled into one premium is now a separate fee. My combined monthly bill for streaming services is now over $100, and my cable bill is growing faster than inflation.
Blame the lame FCC. The FCC has criticized cable mergers, including the Time Warner charter deal and Comcast's acquisition of NBCUniversal, for reducing consumer choice.
What choices do consumers have when it comes to Fox News? Not much, if anything. Media Matters for America, a progressive media watchdog, is launching a massive "Unfox my Cable Box" initiative, but it's too early to tell if it will have any impact.
Consumers can cancel their cable subscriptions and turn to outside antennas to catch local broadcast channels, but the point here is that it will be a long time before the drop in cable subscribers becomes significant enough to force cable operators to reconsider their core offering. The FCC can regulate and force consumers to choose cable systems, but even under the best of circumstances, it's a slow process and the industry is sure to face years of court battles.
However, consumers should not remain silent. Cable executives have bowed to Fox News in the past because its audience tends to speak in a voice supported by far-right politicians. Losing access to the channels will lead to protests from people using the speakers.
When DirecTV (part of AT&T) announced earlier this year that it was discontinuing its right-wing channel OAN, six law enforcement officers accused the satellite service of promoting "strong left-wing voices." DirecTV publishes anyway.
But OAN is a relatively young player. Fox News doesn't. Additionally, it was founded in 1996 and has been a staple of cable television for a quarter of a century. This makes cutting difficult.
But it's not impossible. Anyone who hates having Fox News on their cable list should report it to their cable operator. If Dominion's lawsuit continues Tuesday, more evidence could surface that the cable channel irresponsibly peddled false anti-democracy allegations. Another lawsuit against Fox, a $2.7 billion lawsuit brought by New York-based voting machine maker Smartmatic, is looming and more charges could be filed.
At some point, cable managers might find that the disadvantages of keeping Fox News over plain cable outweigh the benefits of keeping it. If that can result in lost dollars due to customer disruption, cable companies may act in the public interest rather than harm Fox News.
This story originally appeared in the Los Angeles Times.