The prospects for Trump Media & Technology Group: A realistic assessment

Yesterday, I posted a satiric take on the deck for Trump’s just-announced new media venture. Today, I deliver a serious assessment of what’s actually likely to happen with it.

Let’s start with the credentials that let me make this assessment.

Those of you who know me as a commentator on writing may not know that for a decade, I was the primary analyst covering media and television at Forrester Research, and eventually, the most frequently quoted analyst in the country. Mike Wallace of “60 Minutes” introduced me as “the top TV industry analyst at Forrester Research, the authority on where TV is going.” I worked closely with senior management at companies including Comcast, ABC, NBC, Discovery, Hearst, Lifetime, and Viacom. I’ve also been closely following Trump’s moves for the last six years, and I have extensively analyzed — and cowrote a bestselling book on — social media.

This doesn’t make me right (if only analysts could always be right!), but it does make what you are about to read an informed opinion based on industry trends.

As I write this, the SPAC (special purpose acquisition company) that will become Trump Media & Technology Group has a market valuation of $2.9 billion after raising $300 million from investors. So, clearly, the market is bullish on the new company.

Start with the recognition that the new company’s main asset is its audience. It’s likely that at least one-third of U.S. adults would be interested in Trump-themed content. From the perspective of any media company, that is a massive audience eager to watch, read, and listen. Audience translates into viewers, and viewership generates revenues (and not just from advertising).

How will Trump media company compete in the four main elements of its business? Here’s my assesssment.

Trump’s news organization will thrive

The central and most successful part of the new venture will be a television news network. There is certainly an appetite for a Trump-themed news and entertainment network (like Fox News, which for legal purposes defines itself as entertainment).

While Trump could build his own network from scratch, his easiest path would be to use the capital generated from the public stock in TMTG to buy a network. OAN is the most likely candidate, although the price would likely be in excess of $250 million, which is the amount OAN was offered for a buyout in 2019. If he cannot reach terms with OAN, he would most likely buy NewsMax.

To succeed, a new network needs carriage — that is, it must be a channel available from cable, satellite, and telco TV providers. (You may not get your entertainment that way, but Trump’s audience skews pretty old, and older people tend to get TV from cable or satellite.)

OAN is already available in 30 million TV households, according to Reuters.

Households matter for two reasons. One is availability: you can’t easily watch what you can’t get on your cable box. But the second is money. Every network gets carriage fees from the cable and satellite companies that carry it. Those fees are a big reason that your cable bill is so high.

If Reuters’ estimates are accurate, OAN is getting roughly 10 million dollars a year in carriage fees from cable operators. That would put those fees at about 30 cents a year per subscriber, or 2.5 cents per month of your cable bill. I could easily see a Trump-backed network getting five or ten cents a month per subscriber.

Add advertising to that, and you likely have a financially viable network.

It’s easy to point to Trump’s corporate failures. But in this case, I’d expect him to choose seasoned network executives from Fox News — or existing executives at OAN — and let them run the business side of the network. With the capital he is amassing, he can bring on talent like Bill O’Reilly or even Tucker Carlson and add other popular Trump loyalists with their own shows.

Regardless of what else happens, I expect a Trump news network to not only get off the ground, but be a major media force in 2022 and beyond.

Trump’s “Truth Social” network will struggle

In March, I analyzed the prospects for a Trump social network. I was dubious of its potential. I still am.

Such a network needs to follow a bunch of mutually contradictory principles.

• Allow “completely free” speech, but defend itself from attacks by Trump detractors.
• Generate enough debate to be interesting, but block people who are too dedicated to pointing out the actual truth when it contradicts Trump’s statements.
• Allow MAGA types to congregate, but block posts inciting violence.

Twitter and Facebook succeed because of their diversity, which creates universal appeal. They also spend heavily on moderation and block people who incite violence, including public figures.

A Trump social network is unlikely to attract a diverse audience away from Twitter, Facebook, Instagram, YouTube, and Pinterest. Instead, it will attract a narrow group, including the nastiest and most angry of the trolls kicked off of other networks. Mark Zuckerberg has tried to create a family-friendly environment, but has instead created a space where anger generates enthusiasm, interaction, and traffic. But at least he’s trying. Without anything pulling in the other direction, a Trump social network will be very angry indeed. And that’s just not that appealing to most people.

I would also expect such a social network to have difficult policing its most violent members. This will mean that it’s constantly under investigation as a home for far-right groups like the ones that breached the Capitol on January 6.

That sounds like a recipe for trouble, not a successful, well-trafficked, popular, and profitable social network.

Trump’s streaming ambitions are a pipe dream

Streaming media is boiling down to a competition among a small number of players: Netflix, Hulu, Disney, Paramount, HBO/Warner, NBC/Peacock, and a few others. These companies are investing many billions of dollars in content in an attempt to win — or at least survive — the streaming wars. Netflix is spending a mind-boggling $17 billion on content in 2021.

Streamers competing in this environment need a variety of programming. That includes news, sports, family entertainment, drama, comedy, movies, and a huge back catalog. Hell, Disney, which is no slouch on content, bought the Fox studio’s entire entertainment catalogue for $70 billion just to bulk up for streaming.

It’s no coincidence that all the major players except Netflix have decades of entertainment content built up already, and that Netflix has spend huge amounts on creating and buying rights to compete with them.

Trump’s bitty little TMTG is nowhere near competing on this level. And consider the diversity of content for a moment. Netflix shows everything. Hulu, Disney, Paramount, and HBO show everything. A streamer limiting itself to content of interest to right-leaning viewers would be too small to attract much of audience — how many hit movies and TV series do you know that fit that description?

The supposed TMNT+ streaming network is going to have too little content to attract a paying audience. TMNT+ will never succeed.

Trump’s infrastructure platform plans are iffy

Trump clearly learned from the deplatforming wars that not only kicked him off Twitter, Facebook, and YouTube, but kicked the entire conservative social network Parler off of the Apple and Google Play stores, and caused it to lose some of its essential tech providers.

The solution seems simple: build your own tech that you control.

But that’s a lot harder than it looks.

Creating a nationwide or worldwide cloud hosting network that doesn’t depend on tech from other suppliers is not only difficult, it’s extremely costly. There’s a reason that every tech platform depends on Amazon’s AWS, Google Cloud, and similar suppliers: they already made the huge investment, and maintain it. What’s amazing about AWS is not that it goes down every once in a while — it’s that 99.9% of the time, it runs perfectly. That’s hard to get right.

And it’s not just hosting. There are software suppliers for security, content management, subscriber management, commerce, and a hundred other functions. Is TMTG going to build rock-solid alternatives to all of these suppliers?

Parler is back on-line with suppliers that won’t cut it off, but it’s still missing from Apple and Google’s stores. How long would Truth Social or Trump TV last if Apple and Google decided not to carry it in their stores?

Or is TMTG going to make its own phone platform to compete with Apple and Samsung? Will it create its own OS so that it doesn’t have to depend on Android?

I cannot imagine a scenario where Trump network and social content doesn’t depend on existing tech suppliers. And that means those suppliers can cut Trump off. Building your own infrastructure is not a solution, because it means duplicating the trillions of dollars in investment that existing tech companies have made — a project that would take decades to pull off even if you could attract the top talent, which Trump can’t.

Trump Tech is never going to happen. Never.

So the endgame is a Trump TV network

A Trumpian TV network is far more than nothing. It will be a major media force. And I expect it to be out there adding Trumpist voices to the debate and attracting audiences by next year.

The rest of the TNTG plan — the social network, the streaming content, and the infrastructure — will be a lot harder to get right. I don’t expect any of it to make a ripple.

So that’s what TNTG really is. Is that worth $2.9 billion? It could be. But it won’t take over the world.