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Cable News Discovers Profits and Pitfalls of Red and Blue Strategies

Cable News Discovers Profits and Pitfalls of Red and Blue Strategies

It’s hard to imagine Fox News fixture Tucker Carlson on CNN. Yet that’s where he spent five years of his career between 2000 and 2005. He then switched to MSNBC, the network Sean Hannity refers to as “MSDNC.” Likewise, Laura Ingraham started out on MSNBC and only later moved to Fox News. 

In every case, these talent movements reflect proactive business calculations by the networks designed to drive growth. How any business aligns with conservatives, liberals, or both significantly impacts business outcomes. News networks are proactive - every move is intentional based on which audience they want to profit from. Customers are viewers, viewers drive advertising dollars, and advertising dollars are the source of revenue. 

In the early 2000s, news viewership skewed slightly conservative, attracting both conservative and liberal viewers. As a result, you heard unemotional reporting with minimal opinion. Moreover, it was considered scandalous if a news anchor appeared to favor liberals or conservatives overtly.

What drove these changes was the digital transformation of modern media. Digital signal processors developed in the 1990s with binary technology enabled today’s current cable TV system, spawning hundreds of channels and far more news programming. The result was intense competition for viewers and advertising dollars. Competition changed the news landscape overnight. 

The answer for sustaining growth in the face of competition was to make news delivery binary, with cable news networks focusing on serving either liberals or conservatives as markets. Growing an audience and advertising revenue meant going all-in on one side with more and more opinions to enrage, engage, and drive repeat viewers. It was a purely economic calculation.

CNN and MSNBC shifted dramatically toward liberal viewers after 2000. And of course, Fox News was launched specifically to address the conservative market for news. Over the first two decades of the 21st century, news reporting told viewers more and more what they wanted to hear, reflecting their particular liberal or conservative worldview, and it worked. While non-news cable channels saw declines in viewership and advertising dollars, the news networks held their own or eked out small amounts of growth. 

The key to success was to wage war, complete with associated colors for each side. Declaring Democrats as blue and Republicans as red was entirely fabricated by news media.  Until 2000, news outlets used a wide variety of ways to portray the country's political division on maps. For example, until 1996, NBC represented Republican states as blue while CBS used the opposite scheme. However, by 2000 with the Bush-Gore presidential race, all news outlets settled on the same system, using red for Republicans and blue for Democrats.

For two decades, the news networks waged war, lobbing bomb after bomb in the form of alarmist political reporting to gin up anxiety and anger, which sustained viewership and shareholder value. The strategy was so focused you’d think the only news of the day was political, and the world, as described by the anchors, was perpetually coming to an end.

After two decades of alarming the country, the news networks are again at a crossroads. The battlefield changed overnight when Trump lost the 2020 election. The war lost its energy and effectiveness. Eventually, viewership declined across the board, signaling that the business strategy no longer worked. Amping up the enragement even more didn’t work.

CNN is now the first news network to change course - to drive growth with a different business strategy, albeit somewhat similar to pre-2000. With the merger of Discovery and WarnerMedia, CNN came under the control of Discovery - and a new boss, Chris Licht. He’s a veteran producer of “CBS This Morning,” MSNBC’s “Morning Joe,” and “The Late Show with Stephen Colbert.” He’s also sparing no time in making changes. The focus is on being less partisan; if talent doesn’t follow, they will be gone. Already there are more conservative voices in the programming, including Chris Wallace from Fox. The alarmist reporting on political news through a liberal worldview lens is fading fast. 

This decision wasn’t made as part of some benevolent action designed to unite the country. Taking CNN back to more hard reporting and less partisanship is the only strategy left to increase viewers and advertising dollars. It’s risky, but what else can they do? There is no third worldview group to enrage. Parent organizations will only have so much patience. 

If CNN succeeds with this strategy - with the viewership numbers to prove it - you can bet others will follow. It’s like racing in Formula 1, where one car changes tires, and every other team watches to see if the car goes faster. If it does, all cars come into the pits to make the same change. If it doesn't, that car fades to the back of the pack fast. 

These changes in business strategy for news organizations demonstrate how big a decision it is to go after customers with one worldview or another. For news organizations, alignment is evident. But, for most businesses, it’s not - yet it’s reflected in the customer database and how an organization projects itself onto the market. Every company has its own alignment with the two worldviews, conservative and liberal, although few understand it. 

Every business has to run its own evaluation of worldview market opportunity. Aligning with liberals or conservatives may make the most sense - or not. The critical action is to put it on the table, see where a business stands, and make intentional decisions. Many businesses have a stronger alignment with one worldview and don’t realize it. It has nothing to do with politics but how customers see the world and the business. See this article for examples of companies that align with one worldview or both. 

If a business wants to grow, evaluating how the business, market, and customer worldview align is one of the most significant - and least expensive - exercises a company can run. It’s about understanding better how customers think. The results almost always point to opportunities that are very low cost to execute. This article provides an example of evaluating companies from a worldview perspective.

Originally published in the newsletter, Red and Blue Customers.

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