The Daily Beast Podcast - The Only Thing That Will Save OAN from Extinction w/ Angelo Carusone

Episode Date: January 22, 2022

Angelo Carusone, president and CEO of Media Matters for America, joins this bonus episode of The New Abnormal to break down the fall of One America News Network, also known as OAN, and how the channel is trying to save itself. Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Hello and welcome to another special bonus episode of the new abnormal, and we thank you so much for being here. Today we have an extra special guest with Media Matter CEO, Angelo Kurosone, who's going to talk to us about the wonderful news that OAN will probably not be in as many households soon. Welcome, Angelo, to New Abnormal. Back to the New Abnormal. Thank you for having me. Yeah, I always happen to join.

Well, we had to have you because we had to talk about what was happening at one America. news network. Yeah. Which is not much, right? Now. No, look, I mean, it is, it's incredible. The last year for them has been, I don't think there's been a faster rise and fall than One American News, because if you went back to November of 2020, like the, maybe the second week, the business buzz, put aside the politics and everything else. Like, the general, like, brewing, emerging consensus was that One American News, which has basically been reliant on DirecTV for the last, like, in AT&T for like the last 10 years in order to even exist. It seemed like they were going to actually get and convince cable companies to pick them up at scale.

What does that mean? Well, right now, they're not on a lot of cable providers. I mean, they're on Verizon, but they're not on Comcast, which is the big, you know, they're sort of the big dog. They have about 23 to 27% of the cable market. And, you know, they're not on dish network even. So, you know, they're not, they just don't have a lot of character. They don't have a lot of cable companies that picker that carry them.

And the reason that matters isn't just for audience. I think a lot of people sometimes think, well, that means that gets you viewers, which is totally true. But it's much more important than that. It gets you money. Even if nobody watches, if you have carriage, you get money. Right. That's CNN's secret, right?

I mean, that's Fox News is a secret. And CNN, obviously, everybody, every TV channel gets carriage. But, for example, if CNN didn't have advertising, they would not be profitable with just their carriage fees alone. whereas Fox News would. And one American news... Why is that? Fox gets large carriage fees.

Well, yeah. I mean, look, I mean, basically that was Roger Lales' plan, starting about 12 years ago, is that, you know, after Glenn Beck got fired, and he got fired because of all these advertiser losses, basically they hatched this strategy of like, look, we cannot, we cannot do what we're going to do politically and commercially make money

if we are susceptible to the market, forces of advertising along. Like, if we are reliant on what's acceptable in order to get advertisers, we're not going to be able to do the things we need to do. And he really strategically, about 12 years ago, started going through systematically the carriage renewals in order to leverage Fox Sports and other parts of the Fox, you know, massive conglomerate at the time to jack up the rates.

I mean, you know, at one point they turned off Glee season, like toward the end of the season finale, is when Glee was at like its peak, like maybe third or fourth season. And all over a Fox News carriage dispute had nothing to do with Glee. Like, I mean, they played hardball to jack these rates up. And one American News did the same thing to a smaller degree. They really cozed it up with AT&T and direct TV. They were getting paid about 12 cents a subscriber. For context, you know, people will have different opinions about this, but that's about, I would say, generously, six times market value for them. They probably should have been about one or two cents a

market, a subscriber. So they were basically reliant on this direct TV deal. So but after November 2020, you know, when they started getting that attention because of what Trump represented, obviously he could move audiences because people were mad. Fox's own viewers were mad at them. So they were looking for alternatives. There was this idea for a moment where it seemed within the industry that cable companies were going to have to pick up One American News. And they were beginning the process of coming to terms with that. And One American News, parlayed that pretty aggressively moving into 2021 to start campaigns to get cable companies to pick their network up. That's why I say rise. They had a real strong bright spot that they were

working toward. And then the fall was losing direct TV. And obviously a lot of stuff happened between over that year to make that possible. But it really is incredible. And it's a bright spot. We should be happy about this. It's not just the shatden for it. It will make things better. I just want to draw you back for a second. And debunk me if I'm wrong because I don't, I may be wrong. There's some connection between AT&T and OAN that has to do with AT&T executives having the AT&T CEO. Am I wrong about this? That's right. The genesis of it is that when One American News was born, which is about, you know, 12 years ago, it was AT&T and their executives that had worked with Robert Herring, who's the head of the sort of the company that owns One American News.

And they were the ones that, you know, sort of gave him this idea. what they said was, if you created a channel that was like Fox News, but even more intense, we would not just give you cable carriage, but we would pick it up. We would promise to pick it up and give you access to about 85% of our audience, which would give you an enormous amount of revenue. And so that's kind of how it started. If back in the day, AT&T executives did not promise Robert Herring that they would pick up the channel and subsidize it at that incredibly high rate. And that's part of the reason why they have such a high rate. One American News probably would have never existed. And if they didn't continue doing that for the last 10 years,

one American news would not have existed because they literally would not have had enough money. And so that's the genesis. And that was the part of what happened last summer with that Big Word is reporting. It sort of released a little bit of that sequence and that TikTok. And to me, the funny part about all of that is that part of the reason that even became known was because of a fight between One American News and DirecTV that goes all the way back to 2016. And it was Robert Herring and One American News that actually spilled the beans. Because what happened is AT&T ultimately ended up buying Direc TV. So when One American News was started and it was just AT&T, they didn't have full control and full ownership of Direc TV in the,

You know, 2015, 2016, they acquired DirecTV. And DirecTV was not giving One American News originally the same deal. They were giving them the same carriage deal, 12 cents a subscriber, but they weren't giving them access to at least 85% of their audience. And they said, but that's not fair. You promised us. And so they spilled the beans on this. And everyone kind of ignored it until that Reuters reporting.

But in a weird way, it was actually One American News' own. inability to, and lashing out that did help create some of that explosive reporting years later. So I have a couple of questions. One, I know, you know, as you said, OAN sort of skyrocketed last year because people were mad at Fox for, you know, calling Arizona correctly. They didn't really sustain that. Did they? Didn't it sort of start to go away? And then my second question is, what's their future? Like, are they just dead now? On the Fox thing, you're exactly right. And I think that your question actually really does illustrate why what happened with Director, Directive, and One American News matters so much. Because to your point, Fox did this thing for like

48 hours where they called the election and they simultaneously did not undermine the election. The One American News at that point started to attack them. Their own audience said, okay, that's nonsense. We're going to start going after Fox News. And they were looking for alternatives, one American News being that alternative. And then if you go back and look in that two weeks, period right after that happened. So it's now talking just in those two weeks periods alone. Fox News then proceeded to attack, undermine, and call the election illegitimate in 774 individual instances. And that was just in that too. So they basically did something, got blowback, and then they radically shifted their coverage so that it wasn't, it wasn't just that it was

worse than one American news, but it was more influential because they obviously at that point were more politically powerful and politically relevant. So if you fast forward that, What that demonstrates is that One American News had finally reached a point where they could actually influence Fox News and the way that Fox News has influenced the rest of the media by pulling Fox News to the right, by attacking them from the right, and by actually getting the ability by way of Trump to take their One American News narrative, emphasize it, highlight it, and move Fox's audience away or to cannibalize them. So if One American News continued to roll along and grow, Fox News would have needed, just like they did in that two-week period after the election. they would have necessarily needed to get worse in order to hold on to their audience. So part of the reason that matters so much is because it actually slows down the radicalization of Fox News. In terms of the significance, they need this. There is no path for One American News without this.

Now, what they'll do, there'll be a short-term period where they're going to go right for DISH Network. They're going to try to get DISH network to pick them up. So I think, you know, this does prove that the kinds of campaigning and organizing and pressure on cable companies can matter. It mattered with One American News. Direct TV would have easily renewed if it wasn't such that both

One American News became so toxic, not just as brand-wise, but to DirecTV's own audience. More people who had DirecTV were complaining about One American News than were demanding it. And that matters because that's the whole theory of change behind ultimately holding Fox accountable too.

And so if they're not able to get successful carriage pickup from Dish Network or another major provider, Comcast, then they will not be able to operate. They'll go the way of like the bill. Bill O'Reilly's still on TV. He's on this channel called The First. No one ever hears about it. You know, I mean, they may have a stream somewhere that nobody watches. Who do? Right. No, I mean, that's the thing, right? I mean, it is actually a competitor to One America News, which is premised on the idea that One American News isn't just that One American News is too

dumb. That their, I'm actually serious. Their actual marketing is like, One American News is conservative enough, they're just dumb. You should watch us. And it's like, but they have not, they have no business. And I think, you know, they may still have a brand or have some channels, you know, I have some programming, but if they don't have carriage, they don't have money and they don't have enough money to operate, that is going to be a difference maker, both in terms of slowing down the acceleration of right-wing extremism and disinformation, especially as it relates to Fox. but also in preventing One American News uniquely from becoming very influential. I mean, I can draw a pretty straight line between some significant narratives that incubated on One American News and ultimately got forcibly picked up by Fox News.

One of them is the false flag conspiracy theories about January 6th. You know, they were promoting a lot of that. You know, Marjorie Taylor Green, even though she had been, you know, sort of online, she'd gotten some traction. She was not considered an acceptable guest, even on Fox News. But One American News was hosting her pretty consistently. And eventually that then got pickup on Fox News and now it's acceptable for Marjorie Taylor Green to be a guest on Fox. And my point is that they were beginning, they really were shaping Fox and by extension

the rest of the media. And that's before they had full carriage. So I really do think the next few months are going to be significant. If they're not able to get DISH network, then they're done. And I do think that we should just keep in mind that it does demonstrate that this matters, that going at the cable companies and using the consumer power, not just to have a tantrum, but to make a real case, ultimately led to a business decision by DirecTV, which is that we're not going to pay six times market rate for something that is also going to cost us a bunch of

money on the back end, too. Couldn't you make the argument that, you know, the damage to a large extent has already done? As you said, OAN has pushed Fox into these positions, and we see it now, even with, you know, how the Fox lineup has changed since that whole incident with, you know, more and more of the sort of, you know, the pro-Trump, pro-election garbage people are still there and, in fact, are, you know, getting better positions on the network. And a bunch of the people who were, you know, sort of the last of the scene over there are gone now. Yeah, no, you're totally right. That there is, that there actually is, in just this short period of time, even before one American news was able to capitalize on all the gains from 2020, they actually were able to create a lot of

real harmful consequences and make Fox News worse. That's true. I look at it in terms of preventing them from accelerating that process. And I think that's, you can't undo the damage that's done, but that's the one thing that's significant, that they're not accelerating that anymore, because Fox News would have competed and ultimately won. But they also did something I think that was really important, too, that is bad for Fox News. And that's the big thing, which is that this is one of the first times, seriously, where the idea that a product is being overpaid for and that consumers were able to out rank an outnumber right-wingers demanding something. I mean, the simple math was there.

They were already overpaying for One American News. And more people were, more Direct TV customers were complaining about it than not. And that's the same ingredients that's needed for Fox News accountability. The assumption is that Fox News can never be held accountable. But the reality is this. More people watched One American News than watched Fox Business. And Fox Business has three times. And Fox Business has three times the subscriber fee that One American News did.

Why would DirecTV or any other cable provider pay Fox Business 36 cents for something that had less market share than One American News? Right? You see what I'm saying? So from a business perspective, this individual overreach by One American News and the Direct TV accountability action starts to then create a real business question of why are we wasting what could be shareholder dividends on something that is both. toxic and also overpriced. I just have one question for people listening to this podcast who are frustrated. What should they do to help with this? So the one thing that did happen with DirecTV and what American news is people called DirecTV. And they emailed, they called, customers called. And this is something that all cable providers take very seriously. It's called the demand score. And they track it, they log it, they have, they have entire systems designed to put a metric on

this based off the incoming calls and complaints that they get, both the requests for channels, as well as the complaints about channels. And they have a score called demand score. It's a real market value thing. Starting in the summer and moving into the fall, Direct TV got more complaints and calls from customers that ultimately outnumber the demand score. When Fox Business and Fox News is beginning cable negotiations, they always tell their viewers to call their cable company. Neil Kavuto, every time he does a show and a lot of other personalities, they always say things, if you don't get it, demand it. And they make people call their cable providers because they even use the word demand because they understand that they're trying to influence that demand score. So what people can do

is, one, call their cable providers to complain about Fox News and Fox News. It matters. It does. It has to add up enough people, just like voting, you have to ultimately have more numbers, but that's your vote. And even if they're not going to respond by taking Fox News off your channel that moment, I promise you it's being logged. And it will matter when renegotiations happen. and Fox News is renegotiating 40% of all their contracts over the next six months. This matters a lot. And then if they need a little facilitation for that, they can go to unfoxmediccabox.com. There's a mechanism in a process for doing that.

But if they just want to call their cable company complain, that'll work much. And the last thing I'll leave on that is that just keep this in mind. There are 90 million cable subscribers in the country. On average, Fox has a core base of 3 million viewers. That means there are 87 million other people, where Fox News is the second most expensive channel on their cable bill. ESPN's the first. And that never watch it, that never turn it on. If even a fraction of those people called and complained, Fox News would not be able to maintain itself as a viable business unless they became more appealing to advertisers. And that means

no more Tucker. And you know I'm a pessimist. So I'm not even, I'm not trying to be pie in the sky here. I'm just getting, this is business. This is about money. This is a straight money argument. This isn't about political power or civic. This is like when it comes to business, and stuff. Ultimately, the money is a very important driving force. And in this case, the right has leveraged that more effectively for the past longer than a decade, but as it relates to Fox. And I think that in this case, they really overstretched themselves to the point where just a tiny bit of consumer organizing and pressure, as you saw with One American News, can have major, major significance. Fantastic. Thank you so much, Angelo. Thank you. Thanks, Angela.

On that note, we'll wrap this episode of the new abnormal from The Daily Beast. In future episodes, we'll be talking to smart folks from The Daily Beast and beyond from media, culture, politics and science. We'll help us understand what's happening to our country and the world. We hope you'll subscribe to us on your favorite podcast app and share the show on social media. Thanks so much for listening, and we'll see you again on the next episode. Want more great listens? Check out our comedy podcast, The Last Laugh, and our star-studded The Daily Beast podcast at the DailyBeast.com slash podcasts.

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