Kick Fox News While They're Down
Here's a fun fact:
If you have basic cable TV service, chances are you're paying roughly two dollars a month for your access to Fox News. Whether you ever watch it or not.
And Fox wants a raise. They want to break the three-dollar barrier. They're in negotiations right now with three of the major cable companies — mine, for sure, and probably yours — over what they call 'carriage fees,' and what we call extortion.
The dirty secret about Fox News is that it is one of the only commercial TV channels that doesn’t need a single advertisement to be profitable, if not the only one. In fact, Fox could have zero dollars in ad revenue and still have at least a 35% profit margin. This is the result of carriage fees and the guaranteed revenue they provide Fox.
One dollar more per subscriber would add around a billion dollars to Fox's bottom line. In the past, they've always managed to strong-arm the cable companies into raising these fees, but this time around, it might not be a sure thing. Cable TV itself is in decline, losing market share to the online wire-cutter services, and that extra dollar could be the last straw for customers who were thinking of dropping cable anyway. The cable providers can either pass the added cost on to us — sort of a "Fox tax" — or eat it themselves.
Or, they can drive a harder bargain with Fox. And there's never been a better time to do that.