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Cable: CNN Ends Its Ratings Slide, Fox Falls Again

By Jesse Holcomb, Amy Mitchell and Tom Rosenstiel of PEJ

After a year of declining revenues in 2009, followed by a year of declining ratings in 2010, cable outlets found some relief in the extraordinary news year of 2011. It was a relief, however, that could not answer the looming long-range audience challenges.

Still, viewership for the sector over all was up slightly for the year, and analysts projected revenues at all three major cable news operations to rise even more, into high single digits. And all that was heading into the 2012 election year, a cycle that tends to invigorate the channels, whose muscles are tuned to capitalize on political fever.


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One reason for the vigor is that the business model of cable news — in which the cable channels receive half their revenue from fees bundled into monthly cable subscriptions from customers and half from advertising — has proved over time to be remarkably resilient, even as other sectors of the news industry continue to search for sustainable revenue streams.

There are signs that, down the road, the pay TV model as it exists could be disrupted. The evidence of consumers abandoning long-time cable subscriptions for free or less costly versions online remains scant. But the next generation of consumers is more accustomed to seeking news and information online and more reluctant to subscribe to cable services in the first place.

For now, though, the revenue system remains largely intact, and the news channels have devoted more of their resources to tinkering with their established brands and adding — some more than others — to their digital offerings.

According to Nielsen Media Research, median prime-time viewership of the three cable channels together was up 1% for the year, and daytime was up 1% as well, though the small increases came after a year of declines and were bolstered by a series of world events that tend to inflate ratings.

And those increases appeared largely because of gains at CNN, which was up 16% in prime time, and MSNBC, which was up 3%. Fox News experienced its second year of straight audience declines, dropping 3% in prime time, and HLN, despite a boost from high-profile crime trials, lost 11% of its prime-time viewership.

 

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CNN’s prime-time ratings increase came largely from a surge of new viewers who turned to the channel during the Japanese tsunami and early Arab Spring uprisings in March, a month where Fox saw some gains as well. HLN, like CNN, experienced its gains of the year during a concentrated period over the summer when Caylee Anthony was on trial for the murder of her daughter. MSNBC’s ratings remained steady through the year.

When it came to financial indicators for the year, according to market research firm SNL Kagan, revenues were projected to grow 9% at Fox News Channel, 8% at MSNBC and 7% at CNN and HLN, whose finances are combined for reporting purposes.

And Fox continued to widen its lead over the other channels in both total profits and in news investment, which was estimated to top $700 million in 2011, a first for the channel.

There were also changes in the content of the channels, or at least at some of them. CNN, the channel with the biggest newsgathering infrastructure yet the weakest ratings of the three major channels, took more steps than its rivals in 2011 to establish itself as a multiplatform news organization. And there is evidence that this investment is yielding results. The company has a larger than its competitors online, deeper inroads among tablet users, and more app purchases and mobile usages than Fox or MSNBC. Translating digital areas of growth into revenue, though, remains a challenge for the entire news industry.

Perhaps because Fox continued to dominate the sector both in audience and financial terms, it did not change its formula or experiment with new methods of content delivery. Instead, it continued to aggressively pursue higher subscriber fees from cable providers as the bulk of the 15-year-old channel’s contracts with those providers were up for renewal in 2011.

Though MSNBC lost its marquee host, Keith Olbermann, to Current TV, the channel still managed to grow its audience and retain its ranking above CNN for prime-time viewership, the time slot that is most crucial to advertisers. MSNBC’s digital operation, which exists in partnership with Microsoft, continued to be strong. Yet in some ways, as with Fox, there seemed to be little incentive to transform the network into the kind of global, and digital, news and information operation that CNN has sought.

Reaching new audiences on digital platforms will be increasingly important in the coming years. All the financial indicators for cable are strong in the short term, and the dramatic news events of 2011 helped with ratings over all. But neither of those positive trends addresses the long-term challenges: First, similar to what newspapers have already been experiencing, the digital audience for these brands is now close to on par with the television audience, but the vast majority of revenue remains tied to the legacy platform. Second, among the younger generation and future news consumers, many have never had a cable TV subscription and are already accustomed to getting most of their content for free.

Cable and the Next Generation

There is still relatively little evidence that consumer cancellation of cable service, known as cord cutting, is a major threat to the cable industry. A June study by Nielsen indicated that, over all, pay TV subscriptions remained flat between the first quarters of 2010 and 2011. (The only major change came in which types of pay TV services consumers subscribed to. Within that time, cable subscriptions dropped while satellite and telephone video distribution services increased.)

And a later Nielsen study, from February of 2012, indicated that while traditional cable subscriptions may be dropping (down 4.1% between the third quarter of 2010 and the third quarter of 2011), other forms of multi-channel access are growing, including telephone-company provided services (up 21.1%) and satellite TV (up 2.1%).1

But another survey suggested cancellations may be looming in the near future. That survey, conducted in August by Credit Suisse, found that 25% of pay TV customers plan to cancel their service in the next five years, citing the declining value of that service to them. About 4% of subscribers say they plan to cancel in the next 12 months.2 The same survey found that 25% of consumers subscribe to or use an ‘‘over-the-top’’ video service like Hulu or Netflix. Half of those said they use these services as a substitute for pay TV.

Even if subscriptions are not entirely dropped, a close look at consumer behavior for television raises other concerns.  The June 2011 Nielson study found that older viewers spent more time than other younger ones watching traditional television. Among 65+-year-olds, the average time spent over the course of the week studied was 49 hours, about twice the amount of time spent in front of a television by 12-to-17-year olds. The 25-to-34-year olds spent more time than other age groups watching video on the internet (57 minutes in a week). And 12-to-17-year olds spent the most time consuming video on their mobile phones, about 20 minutes during a week.3 The biggest threat to the current cable TV business model, according to industry analyst Derek Baine of SNL Kagan, may be those younger consumers who have never subscribed to a multichannel service and probably never will.4 Indeed, overall, more people are watching online video. ComScore calculates that 100 million Americans watch online video on a typical day, up 43% from a year earlier.5

And, while not a major competitive threat yet, other players are beginning to edge in on cable news’ turf with an eye on younger and internet-native audiences. In January of 2012 the Wall Street Journal reported that The Huffington Post would launch an internet-based news channel with 12 hours of programming each weekday. The Journal itself already produces several hours of video each day on its website. And YouTube has an ambitious effort, with a $100 million budget, to launch as many as 100 original programming channels. Though most are entertainment-focused, some brands such as Slate are providing news programming.

The biggest industry-level steps to mitigate these challenges seem to boil down to what is known as TV Everywhere — a pay TV model that allows cable subscribers to access programming on all devices, and one that CNN has already implemented. But TV Everywhere does not address the larger problem of a generation that is accustomed to avoiding paying for video content altogether. Thus far, with cord-cutting still a distant threat, and cable ratings and revenues up over all, it may be tempting for both cable providers and channels themselves to continue to invest in the current model. But it is unclear how long that model will continue to be a cash cow.

CNN: Refining Its Identity

In its first full year under the leadership of CNN president Ken Jautz and managing editor Mark Whitaker, the original 24-hour news network took steps to distinguish itself in the cable landscape, clarify its brand and build on what it considered strengths. It made changes to its lineup and in emphasized the network’s advantage as an international newsgathering organization. Ratings improved, with the channel up 16% in median prime-time viewers to an average of 655,000 (daytime viewership was up 5% to 474,000). Yet the channel remained in third place, and with all of the major breaking news events around the world, it appeared to retain some, but not all of the viewers that flocked to the channel for those stories.

In March, when the Japanese earthquake and tsunami, as well as the Arab Spring uprisings, dominated the news, CNN benefited, averaging 1.1 million viewers in prime time and 780,000 during the day, placing it firmly in second place among news networks. The next month, though, the channel lost a good portion of that gain. Still, it did not lose all. From April –December, CNN’s median prime-time viewership was 636,000, or 13% more than the same period in 2010. Whether that continued viewer interest was the residual effect of new audiences being introduced to CNN in March and making a habit of sticking around, successful programming rearrangements or simply the result of widespread interest in the continuing series of major world events that tend to draw viewers to CNN, we cannot know for sure.

As the new chief of CNN, Jautz made an effort in 2011 to frame CNN’s identity as an “aggressively independent” network, often using terms like “substance” and “depth” to describe the kind of programming he envisioned for it.6,7

CNN hired Whitaker as its managing editor and executive vice president in February. Like Jautz, Whitaker’s goals early on were to better utilize CNN’s strengths in international newsgathering.8 Whitaker also pushed to move away from an approach in which CNN would, according to Whitaker, “have people who represented extreme views — let them go at it in a food fight, and then sit neutrally in the middle — and then toss to commercial.”9

In real terms, that meant some changes to CNN’s lineup, particularly in the evening. In August, CNN replaced Eliot Spitzer’s foundering 8 p.m. political roundtable show with its flagship host, Anderson Cooper (Spitzer’s “In the Arena” ranked a low 27th among cable news programs in the second quarter of 2011). In September, the channel brought on CNBC anchor Erin Burnett, who launched a general news program at 7 p.m., bumping “John King USA,” another general interest program, to the 6 p.m. slot.

There were some changes in the morning, though, too. In January of 2012, CNN replaced American Morning with Starting Point, hosted by Soledad O’Brien, and Early Start, hosted by Ashleigh Banfield and Zoraida Sambolin.10

Jautz also worked early on to better utilize the vast international newsgathering resources at CNN’s disposal, a move that proved beneficial for the network during the dramatic events in Japan and the Arab world in the first half of the year.

CNN began to take advantage of CNN International talent such as Hala Gorani and Isha Sesay.11 It opened a new bureau in São Paulo in October (though it closed bureaus in Chennai and Bogotá and reduced its Jerusalem bureau staff).12 And it mobilized during the Japanese earthquake and tsunami, as well as during the Arab Spring uprisings and after the killing of Osama bin Laden to provide reporting on location.  A PEJ analysis showed that throughout 2011, CNN devoted significantly more air time — 34% — to international events and matters that concerned U.S. involvement abroad. The percentage was considerably less, 20%, on Fox and even smaller, 14%, on MSNBC. The biggest story of the year on CNN was unrest in the Middle East. It was third on Fox and MSNBC.

The move seemed to translate into strong ratings early in the year, with CNN climbing ahead of MSNBC in March. CNN executives asserted to ad buyers in the April upfront sessions that viewers would not leave when the international crises faded from the headlines.13 But that is exactly what happened as CNN’s viewership numbers turned downward in April, dropping 44% in prime time, and stayed there, once again below MSNBC. By the end of that month, news audiences had lost much of their original interest in the foreign crises, and the news media were not covering them as heavily.14

Advancing Digital

Despite its programming strategy tweaks, CNN has thus far been unable to deeply cut into the prime-time success of Fox or MSNBC. It is perhaps in that context that CNN pushed even more aggressively to be a leader on its other platforms.

The channel continued to be one of the leaders in web traffic. Both Nielsen Online and comScore registers CNN as among the top two or three web domains in terms of audience, with more visitors than either of the other cable news web brands. (MSNBC.com, however, is the leader according to yet another measurement company, Experian Hitwise, which measures audience in terms of market share.)

CNN’s mobile advances have been significant, too. According to Nielsen, in 2011, CNN Digital averaged 19.4 million unique users each month, or 60% more than its nearest competitor, Fox News Digital.15 According to Broadcasting & Cable, CNN has invested heavily in a staff of mobile developers even while mobile ad revenue has not taken off.16

CNN is a leader among its rivals when it comes to tablet usage, according to another 2011 PEJ study in conjunction with The Economist group. In a survey question asking tablet users which sources they visit the most, 25% mentioned CNN, the most popular source among those users and twice the percentage that mentioned Fox News. The survey also asked heavy news consumers what new sources they turned to on their tablet computer that they had not turned to before. Again, twice and many named CNN (10%) as named Fox (5%), while just 2% named MNSBC.17

While there are some data suggesting that CNN’s full reach across all platforms, including television and online, may not be as big as that of NBC News, it seems clear that CNN is making inroads with consumers in new areas, and more aggressively than its competitors.

So far, many of CNN’s digital offerings have been separate from its cable programming. To expand the availability of what it offers on TV, in July CNN became the first news network to take the plunge into the TV Everywhere model when it began streaming its television programming live on its website and its apps for iPad, iPhone and iPod touch. Perhaps also working to ward of the “cord-cutting” temptation, the service is available to about 50 million households that already have a pay TV subscription.18

In August, CNN acquired Zite, an iPad app that gives news consumers a magazine-like experience.19 (Zite personalizes the news experience, drawing on its users’ searches to help recommend and personalize content that the user wants.) TechVibes reported the estimated the value of the deal as between $20 million and $25 million.20

The Zite acquisition may enhance CNN’s ability to push toward a web experience that tailors more toward the individual news consumer. Yet there are challenges inherent in the deal as well. CNN will have to maintain enough of a firewall that Zite users trust that the tool’s algorithm will not tilt in favor of CNN-owned content, yet not so thick a firewall to inure CNN to the innovations that Zite can offer the 30-year-old news organization. In addition, $20 million is a lot of money to spend on a new entrant into an already-crowded field dominated by news applications like Flipboard. And previous purchases similar to the Zite acquisition have not always been successful, such as MSNBC’s 2007 purchase of community news site Newsvine.

CNN has for the past several years attempted to provide more original content on the web as a way of getting users to spend more time on the site. That is one reason, according to CNN Worldwide president Jim Walton, that CNN no longer uses AP stories on cnn.com.21 But the original content is not all produced by CNN staff. A good portion comes from less costly user-generated content through CNN’s iReport product.  After going through several rounds of iterations, executives say iReport has about 900,000 contributors around the world.22 Within the first 36 hours after the earthquake and tsunami hit Japan, the network received more than 700 iReports, some of which were woven into coverage.23 While the iReport content is free and valuable to CNN, the costs of curation do require some investment by the network. Still, it costs much less than full-time reporting staff, and according to a CNN memo, was one of the reasons for 50 layoffs announced at the network in November, many of which fell among videographers and producers whose work was made redundant.24

As CNN’s digital audience continues to grow and its presence on multiple digital platforms deepens, its television audience remains in third place, despite event-related growth in 2011. How long until CNN comes to be known as a digital brand first and a cable television brand second? The data suggest that such a scenario is still far away.

First, while digital audiences are growing, they still do not approach the size of CNN’s television audience. According to comScore, CNN averaged 73 million unique visitors per month in 2011 to its network of websites. According to Nielsen, the television channel averaged 99 million cumulative viewers per month in 2011. While those statistics are not exactly comparable, they do represent the best available comparison of web to television audience size.

Second, CNN’s digital revenue is just a small fraction of the revenue generated by television. According to figures released in 2010 by its parent company, Time Warner, CNN’s digital revenue accounted for 10% of CNN Worldwide’s total revenue. That is about the same as the advertising revenue generated by CNN’s prime-time programming, and thus no small amount. Yet by far the largest single portion of CNN’s revenue still comes from license fees, the revenue generated by cable subscriptions. That stream represents about 50% of CNN Worldwide’s totals.

Fox News: Protecting a Formula that Works

Unlike at CNN and MSNBC, Fox’s prime-time ratings dipped slightly in 2011, by a median of 3% to 1.9 million (it was down during the daytime, too, by 2% to 1.1 million viewers). Yet the Fox News formula of conservative-leaning talk and opinion in prime time still resulted in the channel boasting more viewers than CNN and MSNBC combined.

Much of the success of that vision can be attributed to Fox News chief Roger Ailes. But perhaps some of the slight ratings decline can be attributed to Ailes’s attempts to rein in the tone at the channel, a move that helped push the highly successful 5 p.m. host, Glenn Beck, out the door.  The loss of Beck’s strong lead-in to the prime-time hours may have had the cascading effect of negatively impacting the programs that followed it.

Beck, who joined the network in early 2009, brought ratings success to late afternoon, often drawing around 2 million viewers and setting up a strong lead-in for the prime-time lineup that followed him. But Beck was a divisive figure known for inflammatory remarks like those made in 2009 suggesting that President Barack Obama was racist, and his presence caused friction at Fox.

It was this past year, though, in the wake of the 2011 Tucson shooting of Representative Gabrielle Giffords, that Ailes took direct steps to shift the tone at Fox. Ailes said he wanted Fox hosts to scale back the rhetoric, not out of any ideological softening, but for the pragmatic reasons that it would not be good politics, or good business, to let his channel be defined by the fringe. “I told all of our guys, ‘Shut up, tone it down, make your argument intellectually,’ ” Ailes said in an interview.25 Ailes was also concerned, according to his public statements, that Beck’s personal brand was beginning to eclipse the Fox brand.26

Beck, whose contract was up in December 2011, left in April when negotiations broke down between his company, Mercury Radio Arts, and Ailes. Following his departure from Fox, Beck launched his own web TV service called GBTV, available by subscription. As of September 2011, the portal had about 230,000 subscribers.27

Capitalizing on the value of Fox to viewers

Executives at Fox News continued to take steps in 2011 to increase its revenues by making the case to cable companies that they could not afford to jeopardize their relationships with the channel.

When Fox News was launched in 1996, it gained carriage on cable systems by paying those systems a one-time fee of $10 per subscriber, a high amount, especially given the typical arrangement of systems paying channels for the right to carry their programming. But over time, Fox grew in popularity, and found itself in the enviable position of being able to demand higher license fees from cable providers. Many of those original contracts were up for renewal in 2001 and 2006, and were again in 2011. The last time the contracts were up for renewal, Fox successfully made the case that it was being undervalued by the cable providers.28 In 2011, SNL Kagan estimated that Fox’s rates would increase again, well above that of CNN or MSNBC. The channel’s average monthly revenue per subscriber was forecast to rise to 78 cents from 70 cents, an 11% increase over the year. That was compared to a 4% increase at CNN and no increase at MSNBC in 2011.

News Corp.’s chief operating officer, Chase Carey, has said that Fox is in the same league as ESPN, which commands $4 per subscriber.

 Impact of the News of the World Phone Hacking Scandal

The year 2011 was a dark one for Rupert Murdoch’s News Corp., the parent of Fox News Channel, because of the scandal involving phone hacking at the News of the World and other tabloids owned by the company. (Click here for a timeline of the scandal.)

There is, though, no evidence to suggest that the scandal impacted the culture or journalism at Fox News.

In an interview with the Associated Press, Fox News chief Roger Ailes said, “I’ve stayed away from this News Corp. issue because it’s not a Fox News issue. I know nothing more about it than I’m reading in the press, and I don’t discuss it with Rupert.”29

The scandal did reach CNN, where interview host Piers Morgan has a daily 9 p.m. program. Adweek and other outlets raised questions about Morgan’s past career in Britain as an editor of the News of the World and, later, a non-Murdoch tabloid, The Daily Mirror, especially in regard to whether he approved any phone hacking when he presided. Morgan responded to allegations by stating that “the papers I edited always operated within the law.”30 In December, Morgan answered questions about phone hacking practices for the Leveson Inquiry, which was investigating practices at British tabloids.

When it came to coverage of the phone hacking scandal, PEJ research found that Fox gave it less attention than CNN did but was about on par with MSNBC. An examination of prime-time and daytime programming over the course of 2011 showed that CNN devoted the most airtime to it, at 1.1% of all the CNN news coverage studied during the year.31 That was more than both Fox News and MSNBC combined. Fox devoted 0.5% of its coverage to the scandal, and MSNBC devoted 0.3%.

MSNBC: Rebuilding Prime Time Around Another Host

MSNBC is embracing a future by doubling down on politics and its “Lean Forward” brand (even outside of prime time), and by locking in and developing new talent.

After Olbermann left the channel in January, the 15-year-old MSNBC built its lineup around Rachel Maddow, strengthening the liberal voices in prime time and at other hours. All that seemed to be working for the network, which was one of the best-performing programming components of NBCUniversal, its parent company. Even with Olbermann gone, the channel’s prime-time ratings were up over 2010 levels (it grew its prime-time audience 3% to 773,000 in 2011, and its daytime audience 20% to 385,500 viewers).

After first-quarter ratings showed CNN ahead of MSNBC, there was some speculation that MSNBC would sink back into third place for good. But CNN’s ratings lead proved not to be permanent, and MSNBC increased its audiences even without the powerful draw of Olbermann.

Even with the ratings staying strong, the network made some changes following Olbermann’s departure. The first was a bidding war. In an effort to stave off Olbermann from poaching talent at his new channel, MSNBC hired or renewed the contracts of a number of liberal contributors, including The Washington Post’s Eugene Robinson and Ezra Klein, and Christopher Hayes of The Nation.

Hayes was brought in under what MSNBC views as its “farm team” approach — recruiting young contributors to groom as future program hosts. As MSNBC president Phil Griffin told The New York Times, “There’s a whole new batch of young people we’ve brought in, because we want to keep feeding our system.”32 Hayes was brought on in September to host a weekend program for MSNBC focusing on politics, a big change for the network, whose weekend programming had long been devoted to documentary-style programming like “Lockup.” In February of 2012, the channel added to its weekend lineup by bringing on Melissa Harris-Perry to host a news and politics show.33

The channel also had to fill the vacuum left by Olbermann, whose ratings were the highest of any MSNBC program. MSNBC placed Lawrence O’Donnell in Olbermann’s former slot, and moved Ed Schultz to 10 p.m., which had been occupied by a replay of Olbermann’s program (in August, the channel moved Schultz into 8 p.m. to improve ratings by adding a more “passionate voice” to that hour).34 The 6 p.m. slot that was originally hosted by Schultz was given to Cenk Uygur and later Al Sharpton, the civil rights activist. The decision to hire Sharpton, who hosts a political talk show, sparked a small controversy as he had previously lobbied on behalf of Comcast in the transaction that led to Comcast acquiring majority control of NBCU.35

Perhaps the only constant at MSNBC was Rachel Maddow, who retained her program at 9 p.m., growing her audience to become the biggest at the channel; for the year, her program averaged 983,000 viewers, up 4% from 2010 levels. In August, MSNBC renewed her contract for a multiyear deal, in part to keep Olbermann from luring her away.36 Griffin called Maddow the “model that we want for cable news.”37

With strong audience growth in 2011, and forecasts of solid revenue increases, there appeared to be fewer efforts by MSNBC to innovate beyond the main screen. In part thanks to its partnership with the Microsoft portal, the MSNBC digital network continued to draw one of the largest audiences of any online news outlet in 2011. And Nielsen data suggest that the NBC News brand, which includes MSNBC, has a wider reach than CNN and Fox when all platforms, including digital, are accounted for.

HLN: Hoping to Capitalize on a Courtroom Drama

HLN in many ways faced some of the challenges of its sibling channel, CNN, in 2011. Just as CNN staked its hopes on building an audience around international breaking news, HLN hoped to retain the viewers that came to it for the national courtroom dramas of the Casey Anthony murder trial and the trial of Dr. Conrad Murray, who was convicted of involuntary manslaughter in the death of his patient, the pop star Michael Jackson.

The trial of Anthony, who was accused of killing her two-year-old daughter, Caylee, was seen by HLN as an opportunity to improve its ratings. For the trial, which began in late May and ended with sentencing in early July, HLN added more hours of coverage beyond its normal courtroom fare.38 The hope was that with increased viewership due to the high-profile courtroom drama, some of the new viewers would stay. According to Scott Safon, the chief executive at HLN, “the primary benefit is that more people are getting to see this bench of talent.”39 The intense focus on the Anthony case caused some complaints among HLN staff. One anonymous staffer noted, “It’s not like there aren’t other murder trials going on.”40

Ratings did indeed rise for HLN during the Anthony trial and to a lesser extent during the Murray trial later in the year. Nancy Grace, whose show focused on crime and courtroom justice was the No. 6 program over all in cable news during July (1.35 million viewers), outperformed all MSNBC and CNN programs during that month. That same month, the network over all in prime time achieved some of its strongest ratings ever, reaching around a million viewers on average. Yet in August, that number was cut in half, with the rest of the year’s prime-time ratings hovering about where they sat before the Anthony trial.

But the hope that a new audience would continue to view the network seemed not to materialize.41

HLN’s prime-time viewership in 2011 ended 11% below where it was the year before, with a median 386,000 viewers. (It was flat during the day at 250,000.) It was the biggest drop in percentage viewership among the cable news outlets for the year. When calculating mean audience, which inflates the impact of isolated viewership surges, HLN’s audience numbers suggested an increase, both during the day and in the evening.

In October, HLN launched HLNtv.com which seeks to capitalize on the online news conversation as a kind of online water cooler where users can discuss the types of topics that HLN covers. August layoffs at HLN were made in anticipation of the launch of the site, and though HLN reported that there would be no overall loss of staff, the TV side did lose some people.42

Financial News Networks: A Competitive Niche

The crowded field of financial news networks has created an environment in which two of the smaller channels — Fox Business Network and Bloomberg TV — continue to jockey for CNBC’s market share. The year 2011, with all of its market turmoil, proved to be a good one for all three of the networks as they drew larger than typical audiences.

While Fox Business Network is a relatively new network and is available in only about half the number (64 million) of the homes that CNBC is in (99 million), it still manages to occupy 20% of the available audience between the two of them.43

In 2011, FBN averaged 54,000 viewers in prime time while CNBC averaged 228,000 (Bloomberg is thought to have fewer viewers than FBN, though it is not publicly rated and does not release its audience figures).44,45

And though its audience is small compared to CNBC, the FBN vice president of ad sales said in March of 2011 that the channel had four times as many advertisers as it did in March of 2010.46

Still, the newcomer to the financial news arena faces challenges solidifying its identity and building an audience. That became especially apparent in February of 2012, when executives cancelled the channel’s entire prime-time lineup, replacing it with replays of its programs that air during the 5-8 p.m. time slot.47

While Bloomberg’s audience is small, the channel, which has a large newsgathering staff, took steps to expand its presence in the cable news field in 2011. It hired a new head of television in Andrew Morse, who left a 15-year career at ABC News in June for the post. The network is making a push to cut into CNBC’s dominance of the business network arena. Since 2009, Bloomberg TV’s marketing team has doubled to more than 40.48 Twice during the August week that S&P downgraded the U.S. credit rating, Bloomberg and FBN cut in with live programming while CNBC stayed with taped programming, a lapse that FBN and Bloomberg were both quick to call attention to in their own advertisements.49

Current TV’s Gamble

It was a big year for two other cable news networks, for unrelated reasons.

Current TV, launched by former Vice President Al Gore as a venue for user-generated material, took steps to recast its identity by hiring former MSNBC host Keith Olbermann.

Olbermann launched his heavily promoted new program on June 20 to both high and low expectations. The program, named “Countdown,” as it was at MSNBC, faced immediate challenges on a network that is available in only 64 million homes compared to 96 million at MSNBC, according to SNL Kagan. In many cable systems, it is high on the dial, and typically averages 25,000 viewers in prime time.50

The high expectations came from within the network’s leadership. According to former Current chief executive Mark Rosenthal, Olbermann’s presence was intended to form the core of a new Current identity. “Keith is a game-changer for us,” said Rosenthal, who left the network in July to be replaced by Current co-founder Joel Hyatt. “His show will not only bring us a lot of viewers who haven’t watched Current before, but it will also serve as a driver of our company’s future in a way that most other networks don’t have right now.”51 Olbermann is reported to earn roughly $10 million a year at Current, though that number is disputed by the network.52

In its first week, Olbermann’s new program averaged 354,000 viewers, while his replacement at MSNBC, “The Last Word,” averaged 794,000 viewers, down from its typical audience. It appeared that Olbermann had lured some of his former viewers to Current.53

Yet in the week ending August 7, already Countdown was losing viewers, averaging just 208,000.54

One of the key challenges for the channel, which plans to rebuild itself as a full-fledged political commentary outlet, will be to bolster the lineup around Olbermann’s 8 p.m. program. Current took steps to do so when in October it signed former Michigan Governor Jennifer Granholm to host a weeknight 9 p.m. program entitled “The War Room,” which began airing in January 2012.

Former MSNBC host and Olbermann protégé Cenk Uygur launched his program, “The Young Turks,” in the 7 p.m. slot in November.

But it scaled back in other areas. In December, Current cut its team of 10 documentary producers who worked on the “Vanguard” series, although some were shifted to other jobs.

The Road to Digital Self-Sufficiency

The fact that more cable networks are seeking to compete with the traditional news leaders is but one of many indicators that the sector is still an economically sound one, especially relative to some other news media platforms.

The notion that cable is on sound footing is also borne out by another year of projected revenue gains, sizable profit margins and growth in news investment. Cable subscriptions were up for the year, and people were spending more time watching television. With cable news, that translated to slight ratings growth over all after a year of decline.

Still, consumer habits are shifting and are likely to shift even more down the road. While surveys suggest that cord-cutting is not an imminent threat to the industry, they do suggest that cancellations may come more heavily in the years to come. And that is aside from the challenge of an entire generation of young consumers for whom a cable bill is not part of their budget.

Some steps toward digital self-sufficiency have begun. CNN is investing in new platforms, highlighted by its purchase of Zite. MSNBC is making a concerted social media push through products that include the widely followed @BreakingNews Twitter feed. Fox is working to enhance its web features, including a new media player that allows viewers to view several live feeds at once. And CNN and Fox have both taken steps to emphasize their presence beyond the traditional TV screen with a foray into the TV Everywhere model.

But the biggest catalyst for digital adoption may be substantial declines in revenue and audience, neither of which appears to be an immediate threat. Whether that in the end will hurt the long-term future of the industry remains to be seen.

Continue Reading Cable: By the Numbers

Endnotes

  1. Report: How Americans are Spending their Media Time… and Money.” nielsenwire. February 9, 2012.
  2. Spangler, Todd. “About 20% of U.S. Pay-TV Subs Prone To Canceling: Analysts.” Multichannel News. Sept. 16, 2011.
  3. Flint, Joe. “Cable is The Only Cord Getting Cut.” The Los Angeles Times. June 14, 2011.
  4. E-mail from Derek Baine, Jan. 19, 2011.
  5. “U.S. Digital Future in Focus 2012.” comScore. February 2012.
  6. Bauder, David. “Under New Leadership, CNN Hopes to Tap some Organizational Advantages.” Associated Press. March 22, 2011.
  7. Stelter, Brian. “CNN Hires Erin Burnett and Plans New Show.”  The New York Times. April 29, 2011.
  8. Folkenflick, David. “New CNN News Chief Takes Stock.” NPR. July 1, 2011.
  9. Folkenflick, David. “New CNN News Chief Takes Stock.” NPR. July 1, 2011.
  10. CNN Morning Show Gets Name and Debut Date.” The Huffington Post. December 29, 2011.
  11. Bauder, David. “Under New Leadership, CNN Hopes to Tap some Organizational Advantages.” Associated Press. March 22, 2011.
  12. Andelman, Bob. “Bom Dia! CNN Adds New Bureau in Sao Paulo.” Poynter.org. Oct. 19, 2011.
  13. Lafayette, Jon. “CNN Pitches Comeback Story.” Broadcasting & Cable. April 4, 2011.
  14. Modest Interest in Run-Up to Royal Wedding.” Pew Research Center for the People & the Press. April 27, 2011.
  15. CNN Digital Numbers for 2011.” CNN press release. January 25, 2012.
  16. Winslow, George. “View along the TV app landscape.” Broadcasting & Cable. Aug. 8, 2011.
  17. Mitchell, Amy, et al. “The Tablet Revolution: How People Use Tablets and What it Means for the Future of News.” Pew Research Center’s Project for Excellence in Journalism. Oct. 25, 2011.
  18. CNN Revamps Video Player.” CNN press release. July 18, 2011.
  19. CNN Acquires Zite.” CNN press release. Aug. 30, 2011.
  20. Singel, Ryan. “CNN Buys Zite, Continues Magazine Push.” Wired. Aug. 30, 2011.
  21. Unger, Henry. “International news is growth engine for CNN.” Atlanta Journal-Constitution. April 5, 2011.
  22. Winslow, George. “View Along the TV App Landscape.” Broadcasting & Cable. Aug. 8, 2011.
  23. Kohli-Khandekar, Vanita. “Q&A: Nick Wrenn, CNN International.” Business Standard. April 26, 2011.
  24. Kaplan, David. “CNN Lays Off 50 Staffers, Citing ‘Workflow Changes,’ Reliance on User-Gen.” Paidcontent.org. November 11, 2011.
  25. Sherman, Gabriel. “The Elephant in the Green Room.” New York Magazine. May 22, 2011.
  26. Sherman, Gabriel. “The Elephant in the Green Room.” New York Magazine. May 22, 2011.
  27. Schuker, Lauren. “Glenn Beck Faces Big Test as New Show Bows.” The Wall Street Journal. Sept. 12, 2011.
  28. Levine, D.M. “The Fox News Revolution.” Adweek. Oct. 3, 2011.
  29. Moore, Frazier. “Roger Ailes Looks Back on 15 years of Fox News.” Associated Press. Oct. 5, 2011.
  30. Levine, D.M. “CNN Keeping Mum About Piers Morgan Hacking Allegations.” Adweek. July 14, 2011.
  31. CNN, Fox and MSNBC figures are derived from an analysis of close to 46,000 stories produced from Jan. 1 to Dec. 11, 2011, that were examined as part of PEJ’s ongoing content analysis of 52 traditional news outlets from the main five media sectors, its News Coverage Index.
  32. Stelter, Brian. “At New Network, Olbermann Sets Sights on MSNBC.” The New York Times. June 19, 2011.
  33. Deggans, Eric. “With Debut of Melissa Harris-Perry, MSNBC Continues Slow Diversification of Anchor Ranks.” Tampa Bay Times. Feb. 13, 2012.
  34. Carter, Bill. “MSNBC Shuffles Its Prime-Time Lineup.” The New York Times. Oct. 19, 2011.
  35. Stelter, Brian. “Sharpton’s Push for Comcast Raises Issues About Possible MSNBC Job.” The New York Times. July 27, 2011.
  36. Guthrie, Marisa. “Rachel Maddow Extends MSNBC Contract.” The Hollywood Reporter. Aug. 2, 2011.
  37. Bauder, David. “Is MSNBC Tanking Without Olbermann? Not Quite…” Associated Press. June 19, 2011.
  38. Stelter, Brian. “Casey Anthony Coverage Gives HLN an Identity.” The New York Times. June 12, 2011.
  39. Stelter, Brian. “Casey Anthony Coverage Gives HLN an Identity.” The New York Times. June 12, 2011.
  40. Stelter, Brian. “Casey Anthony Coverage Gives HLN an Identity.” The New York Times. June 12, 2011.
  41. Stelter, Brian. “Casey Anthony Coverage Gives HLN an Identity.” The New York Times. June 12, 2011.
  42. Weprin, Alex. “Layoffs at HLN as Cable Channel Reorganizes Afternoon Hours.” TVNewser. August 12, 2011.
  43. Ariens, Chris. “Biz Network Ratings Revealed as FBN Prepares for Daily Nielsen Measurement.” TVNewser. March 24, 2011.
  44. Stelter, Brian. “Fox Business Makes Over its Prime-Time Lineup.” The New York Times. Feb. 9, 2012.
  45. Stelter, Brian. “Market Ills Give CNBC a Bounce.” The New York Times. Aug. 14, 2011.
  46. Ariens, Chris. “What Being a Nielsen Client Means for FBN.” TVNewser. March 24, 2011.
  47. Stelter, Brian. “Fox Business Makes Over its Prime-Time Lineup.” The New York Times. Feb. 9, 2012.
  48. Vega, Tanzina. “Bloomberg TV Pushes for a Wider Audience.” The New York Times. June 20, 2011.
  49. Bauder, David. “Rivals Twice Seize Opportunity from CNBC.” Associated Press. Aug. 9, 2011.
  50. Carter, Bill. “Olbermann Relaunches ‘Countdown’ on Current TV.” The New York Times. April 26, 2011.
  51. Schuker, Lauren. “Current TV Bets Big on Olbermann.” The Wall Street Journal. June 13, 2011.
  52. Schuker, Lauren. “Current TV Bets Big on Olbermann.” The Wall Street Journal. June 13, 2011.
  53. Stelter, Brian. “MSNBC Fares Well without Olbermann.” The New York Times. June 28, 2011.
  54. Cromwell, Bill. “Ratings Slide for Olbermann, Off by a Third.” Media Life. Aug. 12, 2011.