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Cable TV – Summary Essay

Cable TV
By the Project For Excellence In Journalism
Summary Essay

Introduction

Maybe one of the few questions left about cable news is whether a channel attempting to build its brand around neutral reporting and balanced conversation can succeed.

The medium became noticeably more partisan in tone in 2009, adding ideological talk show hosts to prime time and shedding dissenting voices.

These programs saw audience growth ahead of more neutral programs. Whether daytime programming will follow in this direction remains unclear. MSNBC experimented with a themed, personality-driven daytime schedule in 2009, only to revert to a more traditional news style in early 2010.

In one key demographic — 25-to-54-year olds — CNN fell behind a more ideological MNSBC in prime time audience, a prospect unthinkable even two years earlier. For the first time in years, CNN also cut back on newsgathering, its primary competitive advantage over its rivals.

And Fox, whose talk show hosts promote a populist brand of conservatism, further distanced itself from the competition. Its prime-time viewership was nearly bigger than both CNN’s and MSNBC’s combined. It has almost erased CNN’s advantage in “cume,” the number of viewers it draws from over the course of a month.

Fox surpassed CNN in profit and revenue, as well, and was closing in fast in the amount it can charge for advertising per thousand viewers, after years of having to discount the price of its ads. This is all the more striking given that CNN’s figures include those of its sister channel, HLN. Even farther behind these channels was MSNBC, whose profits and revenues were half that of CNBC’s, the other news channel owned by NBC Universal.

One place where CNN still leads Fox is online. But although Foxnews.com attracts significantly fewer unique visitors per month than its cable news rivals, its audience tends to be the most loyal (for more on this, see News Website Audiences).

What is less certain is whether cable news, like talk radio, will be a conservative-dominated medium. More than half of people watching cable news at any given moment are watching Fox, a share that more and more is mirroring the audience for conservative versus liberal talkers on radio.1

How much of that is now baked into the medium, or reflects a boost in opinion journalism to the party out of power, is yet to be sorted out. MSNBC’s role as a left-leaning prime time channel, a mirror image of Fox, is clearer now than it was even when the election of 2008 was under way.

The Medium as a Whole

It was not taken for granted that the cable news industry would grow in a recession, especially in the letdown year after the boost of an extraordinary made-for-TV election year.

But taken as a whole, the medium gained in 2009 across a spectrum of indicators.

Median prime-time viewership rose 7% to 3.88 million — and daytime grew even more, up 16% to 2.16 million.

Profits were up 9% to $1.16 billion on revenues that rose by 5% to $2.76 billion.

The amount the channels spent on newsgathering, salaries and administrative costs was up slightly — 3% — to $1.6 billion.

Web traffic remained high. According to two of the top Web measurement companies, Hitwise and Nielsen Online, the websites of the three major cable news channels were among the most popular news and information sites for the year.

The only place where things have hit a ceiling is in the total universe of viewers. All three channels saw their average monthly “cume” audience figures fall, a sign that the medium may have reached a point where the only growth it can register is persuading viewers to tune in more often or to watch its video content on other platforms. Partly as a result, as with the Web, success with audiences is marked by deeper engagement. By this measure, Fox has the advantage, certainly online with “time spent viewing.” And on television, the channel’s ratings lead indicates that it can attract a greater number of reliable “appointment” viewers to its programs.

That may explain why talk shows are even more likely to be the wave of the future. Data from surveys about where people go for their national and international news suggest that the Internet has already caught cable.2 If cable has lost its place as the go-to destination for breaking news, talk shows — with their ability to draw people day in and day out at lower cost — may have a logic irresistible to those watching the bottom line.

But the nature of this format, for some, has called into question the accuracy of the label “24-hour news channel.” Television news analyst Andrew Tyndall claims that “the innovation in 2009, for the cable news channels, was to add non-journalism to their mix.”3 Tyndall points to the shift away from analysis into outright advocacy as granting plausibility to the comment by White House communications director Anita Dunn that Fox News Channel “often operates as either the research arm or the communications arm of the Republican Party… Let’s not pretend they are a news organization like CNN is.”4

In response to the White House’s charges, the News Corp. president, Chase Carey, said, “I do think Fox is quite comfortable where it is.”5

An Ideological Medium

The strongest ratings and ratings growth were on ideological programs.

Glenn Beck was up 96% from the year before in Fox’s 5 p.m. time slot. The O’Reilly Factor, the top program in cable, was up 16% to an average of 3.3 million viewers. The Rachel Maddow Show ended the year with 13% higher viewership than in the year before. Perhaps the one exception to this pattern was Lou Dobbs, whose viewership was down 25% for the year before he left CNN.

But over all, these audience figures seemed to reward what had become a clear branding strategy at the channels.

Program executives made hosting decisions that reflected the channels’ identities. At Fox, Beck began hosting the 5 p.m. program after being hired in late 2008. Sean Hannity lost his long-time counterpart, and liberal foil, when Fox chose to put on his evening talk show without Alan Colmes in January 2009. MSNBC in April unveiled The Ed Show, hosted by Ed Schultz, a left-leaning radio broadcaster in the rhetorical tradition of the conservative Rush Limbaugh. The most notable change in CNN’s lineup came in November when the channel parted ways with Dobbs, who had hosted the lone opinion-driven news program in CNN’s evening lineup, and replaced him with the more politically neutral John King.

The tone of cable news content seemed to mirror this ideological alignment. The partisan gap that showed itself during the 2008 election season continued into 2009, at least when it came to cable’s coverage of the new Obama administration. A PEJ study of the first 100 days found that the majority of Obama stories on Fox were clearly negative in tone. It was the only outlet studied where that was the case. On MSNBC, the majority of stories were clearly positive in tone. It was the only outlet studied other than Newsweek where that was the case. In that respect, the two channels offered divergent images of Obama. CNN, meanwhile, mirrored the rest of the mainstream news media in the tone of its coverage.

“I’m not a journalist,” Glenn Beck said in a June 2009 interview with GQ. “If I wanted to be a journalist, I would be Charlie Rose and bore the snot out of people and have fourteen people watching me.”6 Bill Shine, senior vice president of programming at Fox, said that Beck’s viewers would “see some sides of an issue that they won’t see elsewhere.”7 After bowing to criticism and removing the liberal hosts Keith Olbermann and Chris Matthews from covering the election, MSNBC brought them back on for the presidential inauguration. “Our guys do have a point of view in prime time, but they base everything on research and facts and they’re smart,” said MSNBC president Phil Griffin.8

CNN, for its part, called out its competition and tried to distinguish itself as the channel with journalistic integrity. Referring to his channel’s competitors, CNN president Jon Klein said, “They are in a completely different business than we are. We are not putting out the same product as they are. And we shouldn’t be compared to them on that account.”9

Boom Times for Fox

For all of the negative attention it got, by the numbers, CNN’s story is not entirely bleak. With regard to audience, CNN was all over the map.

Its prime-time viewership was down 15% to an average of 891,000.10 But in daytime, the channel was up 9% to an average of 621,000 viewers. On the Web, unique audience registered a slight up-tick of 4% growth, according to Nielsen.

Financially, CNN and HLN remained static, not necessarily a bad thing given the challenges facing other media in 2009. Profits (up 1% to $475.5 million) and revenues (down 1% to $1.18 billion) were basically flat, as was overall news investment (down 2.5% to $703.4 million).11

By contrast, Fox achieved growth across nearly all key metrics. Its audiences were up by nearly a quarter in both prime time (2.13 million viewers) and daytime (1.2 million viewers). Its profits (up 19% to $534.8 million) and revenues (up 14% to $1.21 billion) grew substantially. The channel’s news investment was up 10% to $674 million.

There were moments when Fox’s style of news looked as if it could hurt the channel. When Beck suggested that President Obama was racist, a number of key advertisers promptly removed their commercials from his program. Fox countered that the impact of these removals was “revenue neutral,” because the ads were placed elsewhere in the channel’s schedule.

Another sign that, so far, Fox has not alienated its key revenue source is in the advertising value of its viewers. The gap continued to narrow between the ad value placed on Fox viewers compared to CNN viewers. CNN’s CPM — the cost per thousand viewers for a 30-second ad — has always been higher than Fox’s. But even here, Fox had gains. Since 2001, the first year for which there are data on Fox, the channel’s CPM has increased more than threefold to $3.97. The CPM at CNN/HLN, the longer-established channels, has increased by only 21%, even though it remains ahead of Fox in dollar amount at $5.81.

As for MSNBC, the median audience for its prime-time programming, now filled with liberal talk shows, rose 3% to 786,000 for the year. Its daytime audience, when it relies more on news from NBC, fell 8% to 325,000. Financially, the mixed audience results helped keep things flat. Profits rose 1% to $149.6 million, on revenues that were similar, up less than 1% to $368 million. As a consequence, MSNBC is expected to have spent roughly the same amount, $217.9 million, on newsgathering in 2009 as a year earlier.

One question is whether the ideological branding that appears to work in prime-time cable television somehow didn’t blend well with the more neutral personality of the website.

Does all of this mean that cable news is destined to be not only ideological, but also a fundamentally conservative and personality-driven medium — like talk radio?

It may be too soon to tell. While Fox has thrived for several years, the leading news channel in prime time since 2002, the segregated cable landscape of liberal, conservative and non-ideological channels is relatively new. It is possible that if the Republican Party was in power, MSNBC would experience an audience boost closer in percentage to the one that Fox enjoyed.

There were hints in 2009 that the key to attracting a loyal audience had less to do with attacking a liberal target and more to do with simply going on the attack.

Perhaps this was behind MSNBC’s stability in prime time, where it was up 3% in median viewership. In the coveted 25-to-54-year-old group, the channel for the first time surpassed CNN in viewers, averaging 284,000, compared to CNN’s 264,000.

One might have expected MSNBC’s prime-time viewership to suffer without the Bush administration in office to criticize. But the channel adapted by channeling the voice of the political left, criticizing the Obama administration for not being progressive enough on issues like health care and foreign affairs. A healthy dose of outrage — or “pushing back on the president,” as Chris Matthews’ program tagline reads — may have bolstered the channel in 2009.

A Future for Cable News

Although it was a robust year for cable, there are signs that the medium has reached a point of maturity.

Will cable audiences continue to grow in the future? Projections are that, over all, there is only minimal room to grow in terms of households accessing cable television. Cable systems are expected to continue to add about 3 million households per year, the same as in recent years. So as the channels look for revenue growth, subscriber fees — one of two key revenue streams — are projected to flatten in the long term. Even with rate increases taken into account, analysts forecast that by 2012, license fee revenues will fall below advertising, the second revenue source.

With cable news, at least one audience measure indicates that the universe of people tuning in is shrinking. The cumulative audience, or cume, was down in 2009 at each of the three channels. At Fox, it was down 2%, at CNN, 9%, and at MSNBC, 16%. So while the number of loyal evening “appointment” viewers is up, the overall number of people who tune into a channel at all — even for just a few minutes — is down.

One of the factors behind this audience “ceiling” may be the growth of the Web, including social media platforms like Twitter, as the destination for breaking news.

Another way the Internet may pose a challenge for cable is in the accessibility of free content that has so plagued the bottom lines in other news sectors. Websites like hulu.com have made it possible to view clips from cable news channels online free. In addition, Fox, CNN and MSNBC post clips and live streaming content to their websites. New applications for mobile devices have made it possible for news consumers to view this ad-supported content — free, on the go.

What is the industry doing to prevent becoming a casualty of the digital media landscape?

One tactic is being applied at the corporate level. Led by a cable provider, Comcast, a new service was established in 2009 to establish a pay wall, in which only paying cable customers would be able to access programming online. The Comcast model, known in the industry as TV Everywhere, represents at least a symbolic effort to challenge alternatives like hulu.com. Under the Comcast effort, paying cable customers can access content online after entering through a password-protected screen.

A second tactic is to invest in the Web. In 2009 CNN was the leader among the three cable news brands according to Hitwise, one of the major Web audience measurement companies. Its site, CNN.com, was relaunched in the fall, and registered even more traffic in the months following.

Another tactic is shaping the identity of cable news in such a way as to provide a product that is unique enough to retain its value. Turning prime time into a talk-and-opinion-driven format has long been the most obvious manifestation of this. And although similar programs appeared outside of prime time in 2009, including The Ed Show and Glenn Beck, it is unclear whether daytime cable news will shed the more traditional newscast.

If cable news is no longer the first place people turn to for updates on breaking news, it must meet another need of the news consumer. Fox and MSNBC have bet heavily on the notion that they can provide opinions on the political events of the day.  CNN has bet that it can meet that need with its HLN brand, while maintaining its own niche as a news-gatherer for major world events.

This may or may not be enough to carry CNN. The audience spikes the channel enjoyed during key moments in the 2008 presidential race were met with a reality in 2009: During the weeks of the shootings at Fort Hood and the earthquake in Haiti, CNN’s coverage was not enough to keep Fox News out of first place.


Footnotes

1. There are eight talk radio hosts — all conservative — who attract at least 6.25 million unique listeners each week, according to Talkers Magazine. (Weekly Monday-Sunday cumulative estimates, ages 12+, provided by Arbitron).

2. The Pew Research Center for the People & the Press

3. Personal communication with Andrew Tyndall, January 14, 2009

4. Reliable Sources, CNN, October 11, 2009

5. Ben Grossman, “Rupert’s main man: Q&A with News Corp.’s Chase Carey,” Broadcasting & Cable, October 24, 2009

6. Jason Horowitz, “An extended Q&A with Glenn Beck,” GQ, June 16, 2009

7. James Hibberd, “Fox News set for best year yet, despite Obama,” Reuters, June 24, 2009

8. Matea Gold, “CNN downplays ratings slump,” Los Angeles Times, November 4, 2009

9. Matea Gold, “CNN downplays ratings slump,” Los Angeles Times, November 4, 2009

10. Viewership data are provided by Nielsen Media Research and used under license.

11. CNN economic figures are combined with its sister channel, HLN. All economic data provided by SNL Kagan, a division of SNL Financial LLC.