CNN playing hound to sly Fox News
Former cable TV news pacesetter searches for right formula in its bid to reclaim the lead in viewership
chicagotribune.com
By Leon Lazaroff
Tribune national correspondent
Published November 28, 2003
NEW YORK -- In the 22 months since CNN lost its ratings lead to Fox News, the network that all but created cable television news has replaced top executives, refashioned its format and revamped its evening schedule.
In September, CNN created a show for its young anchor Anderson Cooper and moved Paula Zahn from the morning to an evening slot across from Fox's Bill O'Reilly. Two months earlier, Soledad O'Brien, recruited from NBC, joined Bill Hemmer on "American Morning."
Jim Walton, who took over as CNN president in March, wants the right mix between the straightforward, impartial news reporting that CNN claims as its bedrock, and the kind of punchy, personality-driven newscasts exemplified by its bitter rival.
He still has a ways to go.
According to Nielsen Media Research, Fox holds a solid lead over CNN during the prime-time hours from 8 p.m. to 11 p.m., when 30-second commercials can be priced at their highest point.
During October, an average of 1.1 million people watched Fox during those prime-time hours compared with 773,000 at CNN; MSNBC placed third with 258,000 viewers. A similar gap exists for the all-day comparison: During the first two weeks of November, an average of 775,000 people watched Fox against 461,000 for CNN.
Owing in part to higher name recognition, CNN, which Ted Turner started in 1980 and is now a division of Time Warner Inc., historically has been able to charge more for a minute of advertising than Fox, launched by Rupert Murdoch's News Corp. in 1996.
According to TNS Media Intelligence/CMR, CNN brought in about $270 million in ads during the first seven months of the year; Fox took in about $70 million. During 2002, CNN tallied $352 million in ads compared with $91 million at Fox.
Because neither CNN nor Fox News reports its earnings separate from its parent company, it is difficult to know how well either is performing financially. Yet industry observers say Fox's ability to gain pricing equality has improved in recent months.
"Fox has finally been able to convince the industry that their audience growth will be sustained," said Aaron Cohen, director of broadcasting at Horizon Media, an advertising agency. "CNN has mounted a concerted effort to overcome and overwhelm Fox, but, for the moment, Fox is the clear leader in audience delivery of news."
In revenue, however, CNN holds the edge, said Michael Gallant, media analyst at CIBC World Markets. That's because cable TV distributors such as Comcast Corp. and Time Warner Inc. pay CNN an average of 38 cents per subscriber compared with 22 cents for Fox.
The discrepancy is born of age. The more established CNN had the leverage to secure higher fees.
As Fox has gained in ratings, Gallant said, News Corp. has attempted to renegotiate 10-year deals that Murdoch signed with many of the largest cable operators when he launched Fox in October 1996.
Assuming that programming costs are about even but that Fox's affiliate fees are about 40 percent lower, Gallant estimates CNN is earning about $200 million more a year than its chief competitor. But although CNN's profit margins may be higher, Fox is growing at a faster pace.
"Fox has been an outperformer," said Jill Krutick, media analyst at Citigroup's Smith Barney. "There is no question that CNN is trying to recapture some of its lost luster and experimenting with formats. But for now, the jury is still out in terms of whether they can reclaim their prior positioning."
And that's where Walton, 45, who has held a variety of positions at CNN since 1981, including CNN's Sports Illustrated cable channel, comes in.
Last month at Manhattan's Waldorf-Astoria Hotel, Walton brought nearly all of his big-name anchors to a breakfast for large advertisers, an event held every four years to coincide with the presidential campaign.
Paul Begala and Robert Novak hosted a mock "Crossfire," and Larry King led a panel discussion on the campaign with everyone from Lou Dobbs and Wolf Blitzer to Judy Woodruff and Jeff Greenfield.
Walton's message to the media buyers: The network is "reliable and experienced." He was measured and forthright, if not a bit bland. His demeanor mirrors CNN's image as the no-frills, just-the-facts network.
Yet CNN's comparative drop in the ratings has been blamed partly on it being too newsy, too serious, too busy and just plain boring. The permanence of the Internet and an increasing number of cable TV channels have not helped it.
"It's not the 1980s anymore, when CNN had this space all to itself," said Frank Sesno, a former CNN anchor now producing documentaries and teaching at George Mason University in Virginia. "It's a crowded dial. Viewers are hyperactive. They'll hit the switch in mid-sentence if they don't like what they see."
One CNN anchor who consistently beats Fox with a fast-paced, celebrity-centered program is Larry King, who draws the network's most loyal audience: the over-50 crowd. In fact, cable TV news viewers tend to be older, reports Nielsen.
"Our fundamental principle of being a credible news source is the same as it's always been," said CNN spokeswoman Christa Robinson. "What's different is that we've created distinct programs with strong anchors. That's just a matter of updating the network, not changing its foundation."
But if CNN is to overtake Fox, it must attract 20- and 30-somethings, the viewers most prized by advertisers.
MSNBC President Eric Sorenson labels CNN's new anchors as "more conventional, less provocative. They're a throwback, and outside of Larry King, they are still largely untested."
David Bernkopf, a former CNN executive, said, "They have been trying to go back to the value of the brand: CNN as trusted news source. Instead of talking heads yelling about politics, it's reporters in the field, profiling people and issues. That may clash with sometimes trying to be flashier, but that's the preference."
In contrast, Fox "came out and announced that the rest of the media is biased, and that they were going to get to the bottom of it all," said Robert Thompson, director of the Center for the Study of Popular Television at Syracuse University. "It spoke of a righteousness, a crusade, and that's been great show biz and very appealing to a lot of people."
Fox's surge in the ratings may reflect that it infuses its shows with lots of attitude and opinion rather than trying to uphold impartial and objective journalism, said James Fallows, national correspondent of the Atlantic Monthly.
With so many news sources on television, radio, in print and on the Internet, media outlets may be more successful appealing to a narrowly defined niche rather than trying to appeal to the public at large.
"The era of TV news being centrist and impartial may be coming to an end--not immediately, but certainly when Brokaw, Jennings and [Dan] Rather retire," Fallows said. "Cable can survive with a much smaller slice of the market, and Fox has learned how to do that. CNN needs to find its niche as well."
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