News networks see continued growth in first quarter

Friday, May 1st, 2009

By Patricia Riedman

Cable news networks are basking in a post-election aura—and working hard to maintain the magic in the headlines.

For the nation's news and financial networks, 2008 was one for the record books: The hard-fought and extended U.S. presidential election—coupled with the credit crisis, economic meltdown, blizzards and floods—spiked viewership and fattened revenues.

The Pew Project for Excellence in Journalism's annual look at the news media reports that while newspapers, magazines, broadcast TV and even local TV suffered audience and revenue declines in 2008, cable news revenues increased by a third while viewership was up more than 25 percent across both prime-time and total-day metrics.

Cable's share of news viewing continues to surge. For the first quarter of 2009, cable networks accounted for 61 percent of total consumer news viewing, compared to 39 percent for the broadcast networks, according to a Turner analysis of Nielsen Media Research numbers. Cable networks had a 57 percent share of news viewing in first quarter of 2008.

To build on those numbers in 2009, CNN, Fox News Channel and MSNBC are all continuing to expand their digital offerings, tinkering with their prime-time personality lineups and developing special programming.

"The wonderful thing about the media business is that there are more media consumers today than ever before," says Greg D'Alba, exec VP-chief operating officer, CNN ad sales. "If we operate under that notion, there's terrific opportunity for all of us. Within the news genre, we're seeing revenue and audience growth."

Ratings for the leading news and financial networks were up in 2008, and the trend continues into 2009. According to Nielsen Media Research, in the first quarter of this year, Fox News reached an average of 2.3 million households in prime time, up 24.4 percent from the same quarter last year. CNN was No. 2, with 1.1 million households (down 10 percent, although its total day rating was up 17 percent), followed by MSNBC, with 950,000 households (up 22.3 percent); HLN, with 655,000 (up 53.4 percent); and CNBC, with 288,000 (up 10.3 percent).

Although the overall pie is bigger, with viewership of cable news at an all-time high, the networks remain fiercely competitive. Personalities, politics and new platforms are all proving pivotal in attracting viewers and advertisers.

According to the Pew Project analysis, cable news networks spent about three out of every five minutes focusing on the presidential election last year. MSNBC tagged itself "The place for politics" and bolstered that positioning in September when it gave frequent contributor Rachel Maddow her own hourlong, prime-time weeknight show.

Ms. Maddow was an instant hit, and MSNBC President Phil Griffin says that adding her to its prime-time lineup is key to its strategy. In March, MSNBC, for the first time ever, beat CNN in the Nielsen standings for weekday prime time, and was also the No. 1 cable news network for the 18-to-34 age group in prime time and morning—where the chemistry of the "Morning Joe" tandem—Joe Scarborough and Mika Brzezinski—is attracting viewers.

"The overall strategy of MSNBC is to focus on a younger, smart, edgier audience," Mr. Griffin says. "This is a really difficult time in media. It's a fight for viewers. ...Whatever money [advertisers] are allocating, [they've] got to rethink."

As it aims for a younger demographic, MSNBC is rapidly expanding its alternate platforms. The network, for instance, partnered with Screenvision to show coverage of Barack Obama's presidential inauguration in movie theaters in 27 cities across the country as well as in 650 Starbucks outlets around the U.S.

CNN's Mr. D'Alba argues that while it might not win every ratings time slot, CNN is still leading in cumulative audience measurement, a metric that tracks how a variety of different people might periodically tune in to a particular cable network—even for a few minutes each month—as they channel surf. According to Pew, CNN was the leader in cum audience in 2008, followed by MSNBC and Fox News.

The CNN brand, counted with HLN, CNN Airport and its Web and mobile properties, is hard to miss. Mr. D'Alba says it made inroads in 2008 by expanding its reach to include a more diverse cross section of America, having picked up more Hispanic and African-American viewers in the last year.

CNN is also tapping technology to build communities with its viewers and provide opportunities for advertisers. After an election cycle where it introduced ideas such as the CNN/YouTube presidential debate, CNN's inauguration coverage offered ads through a Facebook integration, which included Cisco Systems and Starbucks in-stream ads immediately following the live coverage and pre-roll commercials for Anheuser-Busch Cos., Brother Industries and Sprint in the online playback of the event.

Even more than politics, what's driving cable news viewership is show hosts with a point of view such as Ms. Maddow, a left-leaning personality who also does an afternoon show on Air America radio, and MSNBC's newest star, Ed Schultz.

On Fox News, conservative pundits Bill O'Reilly and Sean Hannity have been joined by Glenn Beck, who moved from HLN in January. "The O'Reilly Factor" has been the No. 1-rated cable news program for 100 consecutive weeks, with 3.4 million viewers, up 27 percent from last year, according to Nielsen. But Mr. Beck had the fastest-growing cable news program in March, with 2.3 million viewers, according to Nielsen.

His brash, emotional messages also have had plenty of replay on YouTube and Facebook, and generated buzz everywhere from Time magazine to the front page of The New York Times.

Cable news' nighttime formats showcase these anchors, giving them plenty of time to voice their personal views about the news while also creating a loyal following through blogs, Twitter and Facebook pages.

Financial network CNBC, which aims for an upscale business audience, uses the Web to extend the brands of programs such as "Mad Money With Jim Cramer" and "Squawk Box," its premarket morning news and talk program.

"Most of our advertisers absorb the information they see on-air, go to a Web site to learn more and then engage us in other ways, like mobile phones," says Robert Foothorap, VP-global ad sales at CNBC.

The formula seems to be paying off for CNBC, which turns 20 this year. "We're coming off three record-breaking quarters as far as ratings," Mr. Foothorap says. "We're thrilled with our performance but not surprised."

According to Pew's annual study, CNBC entered 2008 with greater reach and estimated profitability than competitors Fox Business Network and Bloomberg combined. The day after Lehman Brothers filed for bankruptcy last year, it averaged 488,000 viewers between 5 a.m. and 7 p.m. (ET), while traffic on its Web site spiked to almost 15 million page views according to Pew.

The network reached 97 million households in 2008, up from 95 million in '07. In comparison, the 18-month-old Fox Business News is in nearly 50 million homes.

Its current size and newcomer status doesn't seem to concern John McCann, VP-sales at Fox Business. "While other networks might be trying to figure out how to do business in a different way, we're listening to what viewers want."

Fox Business has also been able to piggyback on the popularity of Fox News through cross-platform deals when an advertiser might be looking to reach a niche audience, he says. Its overall strategy is to reach a broad swath of financial investors, from Wall Street and CEO types to average consumers.

Reaching people on all media is also obviously part of the play. One of its programs, " Live," is webcast online only every day at noon without commercial interruption. The hourlong program uses Facebook, Twitter, MySpace, Skype and other media to allow viewers and guests to interact. As the program plays, real-time relevant poll results show how viewers feel about a particular subject. Major sponsors of the program have included Travelers Insurance Co., Sprint, FedEx Corp. and The Wall Street Journal.

Record viewership and revenues for the cable news and financial networks stand in stark contrast to the dismal financial reports coming from the nation's newsmagazines and large daily newspapers, which are slashing bureaus and, in some cases, closing down entirely. That seems to indicate a future where cable news increasingly dominates the news sphere and sets the agenda for American water-cooler conversations.

CNN's Mr. D'Alba thinks so. "Although no business is recession-proof," he says, "we think our business is recession-resilient."