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Walter Cronkite broadcasting for CBS at the GOP Convention in Miami Beach Convention Center in Miami Beach, Florida, 1968.
Ben Martin | Archive Photos | Getty Images

There has been an enormous amount of focus in the media world over the last 18 months about how TV and movie entertainment are moving to streaming services. While Netflix has become a staple of television service in some 70 million American households, the addition of Disney+, Hulu, HBO Max, Peacock, Apple TV+, Paramount+, and Amazon Prime has created a veritable buffet of entertainment choice for consumers. The recent merger announcement of Discovery with Time Warner, bringing together Discovery+ with HBO Max, has further underscored that the future of TV lies in streaming entertainment services.

Sports programming has gotten into the game. ESPN, which has been slow out of the gates into streaming, has recently signed renewal deals for substantial amounts of professional sports programming that give it flexibility to air those offerings on the ESPN+ streaming service. In addition, Amazon recently agreed to pay the NFL $10 billion just to air Thursday Night Football on its streaming service over the next ten years.

As entertainment and sports programming migrate to the streaming world, the cable and satellite bundles of channels are losing subscribers at an accelerating rate with viewers cutting the cord — or in the case of younger viewers, never subscribing to cable or satellite to begin with. So, while the streaming wars heat up, and legacy television channels lose both viewing audience and subscribers, no one is really focused on what this means for television news.

To understand the impending crisis for television news, one needs to understand the economics of the current television system. Television channels today not only derive advertising revenue from attracting an audience, but crucially important to their economics are the fees paid by cable and satellite operators for carrying those channels. For instance, CNN, CNBC, MSNBC, and Fox News get paid very substantial fees across every cable and satellite household in the United States of which today. Today, that means subscriber fees are paid to news channels covering over 75 million, down from close to 100 million at one point not long ago. The news channels get paid across every single one of those households even though only a small minority of households watch each of those channels. That creates a very substantial revenue base supporting the big TV news franchises — regardless of how many viewers the channel actually has, it is getting paid across all cable and satellite homes.

Similarly, local television stations, which are the backbone of local TV news are paid what are called “retransmission consent fees” from cable and satellite operators, which are very substantial payments for the right to carry those stations. Those stations also are paid across all the cable and satellite homes in a given local market, regardless of what percentage of those homes actually watch any given channel. Because of this unique payment system for legacy broadcast and cable channels, many consider this payment system to be the best possible economic model the television industry could have.

As we move away from consumers getting a bundle of cable or channels to an environment where consumers take a few streaming services that they pay directly for, the whole concept of collecting money across all homes goes away.

Entertainment content is making this transition, even though many industry analysts doubt that all entertainment streaming services will make it. Sports programming is beginning to make this transition as well. But there is a huge question mark about how news will be supported in this new streaming world. Any one news channel transitioning to a live streaming service would have to charge a very substantial fee to each home to make up for the cable and satellite carriage it is losing. News viewers may be the last ones to abandon the pay-TV bundle, but inevitably as the reach of that bundle shrinks, those fees will shrink along with it.

Complicating the picture further, there is substantial additional competition for television news, with Roku and Amazon both providing ample streaming news services. They do not have the star power or depth of content of the better-known TV brands, but do provide a reasonable news menu for those who are not political junkies or news channel brand loyalists.

TV news began as public service programming that broadcasters had to carry as a condition of getting a license from the FCC. The television news business eventually turned profitable, but it will soon face an existential crisis as to how to remain so.

There are some possibilities for preserving the economics of news channels and local news, beyond sending each channel out on its own to try to get sufficient direct-to-consumer streaming revenue from loyal viewers.

One possibility is to create a large bundle of national and local news, made available through a single packager. This is what Apple is doing with magazines and newspapers, offering scores of popular magazines and newspapers digitally for a monthly fee at $9.99 with Apple News+, but so far it has been underwhelming in terms of its adoption. And traditional media companies are going to be extremely wary of enhancing Apple’s power in the media marketplace as they increasingly compete in streaming entertainment.

Another possibility would be to find a more Switzerland-like player to act as a neutral distributor. News channels and stations are all in this predicament together — if they can’t get subscription fees from all cable and satellite households, they’d at least like to get fees from all news households, even those that don’t represent loyal viewership of their particular brand.

Certain companies may be able to go it alone better than others. Comcast and NBCUniversal have a broad array of assets including CNBC, the leading business news channel; MSNBC, the leading source of progressive-oriented political news; Sky News, the leading international news channel; NBC News Now, a streaming service; news offerings from digital streaming service Peacock; and a multitude of local stations and regional news channels. Providing a separate news bundle to households who otherwise subscribe to Peacock could drive broad uptake of news content while also driving enhanced distribution of the broader entertainment streaming service.

Fox is putting a lot of shoulder behind Fox Nation, a subscription news channel intended to satisfy the insatiable appetite among that news audience for right-wing, often extreme commentary. There may be a model here for Fox, but my guess is it is not a sufficient one to make up for the substantial financial decline the Fox News Channel will suffer with significantly diminished cable/satellite subscriber fee support.

The center of any democracy is a well-informed citizenry and a robust marketplace of ideas where quality news content can survive and thrive. Right now, there is no obvious answer to saving TV news as pay-TV subscribership declines, but let’s not allow quality television news to become collateral damage in the entertainment streaming wars.

Tom Rogers is Executive Chairman of WinView. He was the first President of NBC Cable.

Disclosure: Comcast-owned NBCUniversal is the parent company of CNBC.

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Amazon’s ditching the plastic air pillows in its boxes

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Amazon's ditching the plastic air pillows in its boxes

Amazon replaces plastic packaging: Here's what to know

Amazon said Thursday it has removed 95% of the plastic air pillows from its packaging in North America and will replace them with paper fillers made from 100% recycled content.

It marks Amazon’s largest plastic-packaging reduction effort and will help it remove nearly 15 billion plastic pillows annually.

“We are working towards full removal in North America by end of year and will continue to innovate, test, and scale in order to prioritize curbside recyclable materials,” VP of Mechatronics and Sustainable Packaging Pat Lindner said in the announcement.

The e-commerce company began transitioning away from plastic filler in October 2023 when it announced its first U.S. automated fulfillment center to eliminate plastic-delivery packaging. Amazon collaborated with suppliers to instead source paper fillers that are also curbside recyclable.

This is not the first step that Amazon has taken to reduce its packaging waste. In 2015, the company launched the Ships in Product Packaging program, an initiative designed to reduce the use of Amazon’s signature brown box and instead ship products in their original packaging.

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Startup Kinetic rolls out robots to fix electric cars, and someday robotaxis

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Startup Kinetic rolls out robots to fix electric cars, and someday robotaxis

Kinetic cofounders: CEO Nikhil Naikal, CTO Sander Marques, COO Chris Weber

Courtesy: Kinetic Automation

While electric vehicle demand is still increasing in the U.S., the sales growth rate for cars that pollute less has cooled down in 2024 due partly to the high cost of insurance and repairs for tech-laden new models.

A 2024 study by J.D. Power found that, despite the climate benefits, only 26% of car buyers in the U.S. were “very likely to consider purchasing” an EV in the next year, and more than 20% were “very unlikely to consider an EV purchase” at all.

That’s where Santa Ana, California startup Kinetic Automation comes in. By providing diagnostics and recalibration of the high-tech systems in modern vehicles, the company hopes to decrease costs associated with EV ownership and repairs.

The startup, which employs about 40 people full-time, has developed a robotic system that uses computer vision and machine-learning software to quickly diagnose issues with a vehicle’s digital systems.

Kinetic CEO and co-founder Nikhil Naikal explained that a lot of new models, especially battery electrics, are loaded with bells and whistles such as touchscreens and robust infotainment software, along with a variety of cameras and sensors that enable everything from rapid charging to driver safety features including forward collision avoidance, lane-keeping and adaptive cruise control.

The existing collision repair industry is well-equipped to handle most physical fixes like replacing a bumper, a busted windshield, brakes and paint or adjusting alignment. But for many collision repair centers and auto dealerships, ensuring all sensors, software and computers are working properly can prove time-consuming and expensive.

Kinetic puts its robotic systems and technicians to work helping these shops and dealerships fix the finicky, “digital” aspects of customers’ cars.

Here’s how it works: A customer’s car rolls up to one of Kinetic’s service bays, where it is scanned from bumper to fender with machine vision sensors, some on a robotic arm that peers over the top of the vehicle.

The scan determines which systems need to be precisely programmed or need a recalibration. Then Kinetic’s software, which is connected to the vehicle’s systems, will initiate and track the completion of those fixes.

Kinetic uses robotics and AI to recalibrate the software and sensors in electric vehicles.

Courtesy: Kinetic Automation

The company built its first four service hubs in Las Vegas, and Orange County, San Bernardino and Riverside counties in California.

To fuel its growth, Kinetic has raised $21 million in a Series B round of venture funding led by Menlo Ventures, joined by Allstate Strategic Ventures, Liberty Mutual Strategic Ventures and the company’s earliest investors Lux Capital, Construct Capital and Haystack Ventures.

Menlo Ventures’ Partner Shawn Carolan, who invested in Uber and Jump Bikes, said collision companies and auto dealerships that had worked with Kinetic as pilot customers helped convince his firm to lead the deal.

“They were saying, ‘This reduced our cycle time by days.’ Or ‘We got cars back to customers faster and cheaper,’ and ‘This made my life way easier,'” he explained. “So we knew this was already solving a tremendous pain point.”

Before starting Kinetic with his co-founders, COO Chris Weber and CTO Sander Marques, Naikal worked as the vice president of software engineering at Velodyne, a company that made lidar sensors that enable robots, drones and autonomous vehicles to detect and avoid objects in their surrounding environment. Velodyne merged with Ouster in 2023.

Weber previously worked as an operations leader at Uber, while Marques is a repeat tech entrepreneur whose prior company developed engine control modules for high-performance vehicles.

Kinetic will one day provide its services to robotaxi fleets, Naikal said, and to the owners of other autonomous vehicles. But for now, the startup is focused on hiring, training technicians and building out its service hubs across the U.S. to handle a higher volume of auto repairs, especially the electric vehicles that are growing to comprise a larger portion of cars on U.S. roads each year.

So far, Kinetic has most commonly worked on Ford Mach-E, GM Chevy Bolt, Hyundai Ioniq EVs, and some Teslas at its existing service hubs, the CEO said.

Market research firm Canalys forecasts that sales of battery and plug-in hybrid electric vehicles combined will reach 2.2 million units in 2024 in North America, representing about 12.5% of all new vehicle sales in the region.

“Motor vehicle insurance for EVs, and across the board, has been a major contributor to inflation rising something like 20% when you look at the Consumer Price Index over the last 12 months,” Naikal said. “I’d like to hope we can shave a few points off of that while making people more comfortable switching to electrics.”

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OpenAI competitor Anthropic announces its most powerful AI yet

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OpenAI competitor Anthropic announces its most powerful AI yet

Jakub Porzycki | Nurphoto | Getty Images

OpenAI competitor Anthropic on Thursday announced Claude 3.5 Sonnet, its most powerful artificial intelligence model yet.

Claude is one of the chatbots that, like OpenAI’s ChatGPT and Google‘s Gemini, has exploded in popularity in the past year. Anthropic, which was founded by ex-OpenAI research executives, has backers including Google, Salesforce and Amazon. In the past year, it’s closed five different funding deals totaling about $7.3 billion.

The news follows Anthropic’s debut of its Claude 3 family of models in March and OpenAI’s GPT-4o in May. The company said Claude 3.5 Sonnet is faster than its previous leading model, Claude 3 Opus, and is the first model from Anthropic’s new Claude 3.5 family.

Claude 3.5 Sonnet

Claude 3.5 Sonnet is free from the company’s website, Claude.ai, and in the Claude iPhone app. Claude Pro and Team subscribers can access the latest model with higher rate limits.

“It shows marked improvement in grasping nuance, humor, and complex instructions, and is exceptional at writing high-quality content with a natural, relatable tone,” the company said in a blog post. It can also write, edit and execute code.

Anthropic also announced “Artifacts,” which it said allows a user to ask its Claude chatbot to, for example, generate a text document or code and then opens the result in a dedicated window. “This creates a dynamic workspace where they can see, edit, and build upon Claude’s creations in real-time,” the company said, adding that it expects Artifacts will be useful for code development, legal contract drafting and analysis, business report writing and more.

Claude Artifacts

As startups like Anthropic and OpenAI gain steam in the generative AI business, they — alongside tech giants like Google, Amazon, Microsoft and Meta — have been part of an AI arms race to integrate the technology to ensure they don’t fall behind in a market that’s predicted to top $1 trillion in revenue within a decade.

News of Anthropic’s new model follows the company’s debut in May of its first-ever enterprise offering.

The plan for businesses, dubbed Team, had been in development over the last few quarters and involved beta-testing with between 30 and 50 customers in industries such as technology, financial services, legal services and health care, Anthropic co-founder Daniela Amodei told CNBC in an interview last month. The idea for the service was partially borne out of many of those same customers asking for a dedicated enterprise product, Amodei added.

“So much of what we were hearing from enterprise businesses is people are kind of using Claude at the office already,” Amodei said at the time.

Last month, shortly after Anthropic’s new product debut, Instagram co-founder Mike Krieger joined the company as chief product officer. Krieger, the former chief technology officer of Meta-owned Instagram, grew the platform to 1 billion users and increased its engineering team to more than 450 people during his time there, per a release. OpenAI’s former safety leader Jan Leike also joined the company in May.

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