The future of cable companies amid the demise of CNN+

Yahoo Finance's Allie Canal joins the Live show to discuss the future of cable companies amid the demise of streaming platform CNN+.

Video Transcript

AKIKO FUJITA: Well, the untimely demise of CNN+ is leading to further speculation about the future of cable companies in the new streaming era. Let's bring in Yahoo Finance's Allie Canal, who's been following this for us. And Allie, this is a project that didn't even last a month. We've already seen the shows all end. I mean, number one, it says about the challenges of news brands being able to stream, but also these legacy media companies who've tried to dive into the space.

ALEXANDRA CANAL: Yeah, Akiko, it's definitely a big challenge. And Saturday, tomorrow, CNN+ is officially shutting down after he said just one month. And I did want to dig into more about why it's so difficult for these cable companies to stream. I talked to two professors at UV's Darden School of Business, and they told me it really boils down to two things-- content and contracts. So on the content side, cable channels, cable networks, they're really limited in what they can show because they are at the mercy of advertisers.

So that's why we see a lot of sexier, more nuanced programming on streaming. And on cable, it's a lot of the same-- the reality TV series, the sci-fi shows, the sitcoms, et cetera. So that's one issue. And then we have to take a look at the contracts. So a lot of these cable networks have these longstanding contracts with legacy cable operators, like a Comcast or a Charter. And within those contracts, there has to be some sort of expectation of exclusivity. Because if I'm a user and I'm subscribed to cable through Comcast, but I can access that same program elsewhere, there's no reason for me to subscribe.

And that's really what happened with CNN and CNN+. CNN as a network is known as a really hard breaking news type of network. But if they had that same type of programming on CNN+, they would have been in breach of contract. And that's why we saw a lot of those shows on CNN+ were a lot more lifestyle types of programming and Anderson Cooper, parenting show, for example. But that was a little bit off-brand. And I think that muddled messaging confused viewers. And I think ultimately, it's one of the big reasons why we saw CNN+ fail, along with those management woes, bad timing with Warner Brothers, Discovery.

But at the end of the day, although streaming is, quote unquote, "the future" for some of these companies, they are going to side with cable over streaming, because that's where the money is. It's a tried and true business. It's business to business, versus direct to consumer. And that's a whole different ballgame for these types of corporations that either want to go full throttle into streaming or try and double dip. And that is where the crux of the issue is right now.

AKIKO FUJITA: Well, you would think that something like sports especially, those contracts are so big, especially on the cable side. And Charter and Comcast, two giant cable TV operators, announced a new joint venture earlier this week to develop-- offer a next gen streaming site. It sounds like another company attempting it. Is the fate going to be the same?

ALEXANDRA CANAL: Right, and I think this venture represents a point that these companies can still have a stake in the streaming wars without the content conflict. So this is more focused on the product side, going after the Rokus, your Amazon Fire Sticks, your YouTube TVs of the world, and that could help with two things. One, when it comes to search and discovery, we know that users want to find their favorite shows, their favorite platforms very easily. This could potentially solve some of those problems.

And on the other end-- and you and I have talked about this extensively-- is data. Data has become the new golden goose in the streaming era. And now these legacy cable operators are going to have a lot of access to user information, how people are interacting with these streaming platforms, what type of user is gravitating towards which type of service. They could potentially use that data for themselves. They could sell it to advertisers.

So that's a really big thing there, but these cable operators, they're having a bit of an identity crisis themselves, right? They're trying to figure out, how do I fit in to this new landscape? Because for the longest time, it was one way. Now things are completely different. And they want a seat at the table. This could be a good way for them to get in on it.

AKIKO FUJITA: It makes me wonder what my viewing habits and my data says about what kind of--

ALEXANDRA CANAL: Right? I'm like, they're watching us all the time.

AKIKO FUJITA: There's some reality TV mixed in with some really serious documentqaries.

ALEXANDRA CANAL: I know. My viewing habits is very ADD, all over the place for sure.

AKIKO FUJITA: Yeah, yeah, and I never finish the show, so there you go. Allie, thanks so much for that. And of course, you can read all about it on our site.