CNN Thrives...Except in Prime Time

This from National Journal Magazine:

Away From Prime Time, CNN Thrives
CNN sticks to its guns on news without opinion, except on the HLN channel.
by Erin McPike (The author is a reporter for CongressDaily)

Smack in the middle of the worst economic decline since the Great Depression, when businesses everywhere are hemorrhaging money and news organizations are suffering through an especially rough job-shedding crisis, CNN enjoyed its most profitable year ever in 2009. And almost midway through 2010, company executives say that the cable network is on track to improve on that performance.

Although it is in last place among the cable networks in prime-time ratings, CNN has achieved six consecutive years of growth, spokeswoman Christa Robinson said. Each year since 2003, when Jim Walton became president of CNN Worldwide, the network's profits have risen at least 10 percent, CNN says, but it declined to provide cash figures.

For months, the world's original cable news network has been hit with painful press coverage of its plummeting primetime audiences. CNN earns only about 10 percent of its revenue from prime-time programming in the United States, however. Competitors MSNBC and Fox News have moved deep into opinion on prime time and have boosted their ratings as a consequence. CNN refuses to join the trend, believing that it has a niche and that news consumption extends far beyond the evening hours.

The network has been talking in recent months with CBS News about combining reporting efforts, but no announcements have been made. Jeff Bewkes, president and CEO of Time Warner, CNN's parent company, told investors on a May 5 conference call that although there is no news yet on a potential CNN-CBS merger or partnership, the motivation for such a deal comes mostly from the needs of the "big three" broadcast networks. "CNN has a very strong financial performance," Bewkes said. "It is the fastest earning growth in the Warner network portfolio over the last five years."

In a note to staff on April 12, Walton said, "We are experiencing a down period in one segment of our business, CNN U.S. prime time. Critics have taken note and are offering all manner of suggestions for how to 'fix' CNN. What's missing from these reports is an essential component of our journalism: context."

The first prime-time shake-up came this week, when Campbell Brown announced she is leaving the network because of poor ratings for her 8 p.m. show.

Walton's communiqué noted that aside from prime-time revenue, "the remaining 90 percent comes from non-prime-time programming on the network, as well as HLN [Headline News], CNN.com, CNN International, CNN en Español, CNN Airport Network, and all of the other CNN-branded news and information platforms that together deliver more news to more people than any other news organization in the world."

Despite the prime-time slippage, CNN continues to attract more unique viewers than its competitors overall, according to Nielsen surveys. In April, its 90.2 million viewers topped the 82.3 million who watched Fox News and MSNBC's 74.8 million. And HLN's 79.5 million viewers add to CNN's bottom line.

Brad Adgate, a New York City-based media analyst and the director of research for Horizon Media, said of CNN's success, "It's kind of a conundrum." The network has suffered in ratings since Fox changed prime-time news into a personality-driven medium, but CNN has been around a lot longer than its competitors. "It's a great brand," he said.

CNN's strength, Adgate said, is with "casual news viewers" who tune in when news happens. "You can't really control that spike in viewing," but there will always be late-breaking news. He called the network more of "a destination channel" for that kind of content compared with the other networks.

When it comes to advertising, he contended, CNN has a more difficult job because it doesn't guarantee the consistency that Fox News and MSNBC offer with their "appointment viewing" in prime time. "For years, CNN used to say that 'news is the star,' " Adgate said. But Fox has changed that with such personalities as Sean Hannity and Bill O'Reilly. "MSNBC has copied that with some success," he noted, citing Keith Olbermann as an example. For its part, CNN has tried the personality game with names such as Brown and Paula Zahn, but it hasn't worked too well.

HLN posted another record-setting year in 2009, leaping 15 percent in total prime-time viewers. The Joy Behar Show, with its mix of political and pop guests, is gaining popularity and seems to be CNN's answer to the "infotainment" that has begun to overtake prime-time news programming. Because the show is on HLN, it has not compromised the vaunted CNN brand.

In a series of recent corporate memos, presentations, and in interviews with National Journal, CNN executives reiterated what they believe will keep them on top in the long term even as the news business undergoes radical change: the network's commitment to unbiased journalism.

Walton told the advertising community at a presentation in New York City recently, "We're the only credible, nonpartisan voice left, and that matters." The network's news-gathering capacity remains unparalleled. CNN offers longer, more in-depth packages throughout the day, when its competitors fill the hours with a variety of political strategists, bloggers, and academics.

When it comes to technology, CNN leaders note, they have always been first: The cable network was the first to launch; CNN.com was the first affiliated website out of the blocks 15 years ago; iReport, its website for citizen journalism, debuted four years ago. In the presentation to advertisers, CNN U.S. President Jonathan Klein pointed out that CNN was integrating Twitter into its programming and news gathering "before most people even heard of Twitter."

"We're going to continue to innovate; innovation is in our DNA," Klein declared. "We'll continue to push the envelope, but we will never abandon our core faith in being the sole, nonpartisan cable network in this country."

To that end, CNN.com has become increasingly important to the news organization's business model over the past five years and currently ranks No. 1 among news websites. Although MSNBC.com has become its toughest competitor, CNN.com remained on top with 38.7 million users in March, compared with MSNBC.com's 33.8 million and Foxnews.com's 17 million, according to the Neilsen NetRatings. CNN.com averages 38.2 million users per month.

The website has other impressive "best" numbers: 1.7 billion average monthly page views; 1.4 billion total minutes spent by users on the site; and 25.7 average minutes per user.

The company supplies its online advertisers with a host of other metrics that confirm its No 1 status. In emerging technologies, it boasts that, according to a March Nielsen VideoCensus, CNN's 130 million video streams topped MSNBC's online by 11 million.

On mobile applications, CNN again leads the pack. Data mined from Nielsen's Mobile MediaView in February and trumpeted by CNN include this statement: "With 14.8 million unique visitors to its mobile site in February, CNN Digital beat the nearest competitor, Yahoo News, by 174 percent. This is the 38th consecutive month that CNN Digital has topped the news and current events category."

Being out front on the Web and on mobile technologies -- particularly as television programming becomes more specialized and compartmentalized -- is the root of CNN's continued success.

Greg D'Alba, executive vice president and chief operating officer for CNN ad sales and marketing, told National Journal that 80 percent of the deals it makes with advertisers are targeted to reach consumers on more than one platform. So the network's profitability, he said, results directly from driving advertisers "to spend more money across the board" as news consumers draw information from multiple places throughout the day. Not surprisingly, he said, "we find ourselves making more money across the board."

In the New York presentation, D'Alba explained that for CNN's brands, the availability of its news across many kinds of technological platforms "means primetime is all the time.... Clearly there's more news on more screens than ever before, but we believe there's less journalism, and that's the real difference. So for you, our valued advertising partners," he added, "a continued relationship with our brands will allow your message to get to the right person in the right place at the right time and when they're most engaged."

Network sources said that advertisers want to place more ads than the network has space. D'Alba, not wanting to chase away business, denied that assertion. "We don't put ourselves in a position where we can't accommodate advertisers." From its airport services, to HLN, to weekend and weekday programming, the network has plenty of room for ads, he said.

For now, CNN's model may not be getting the network great headlines, but it is keeping its employees happy. While some competitors are enduring layoffs and hiring freezes, Robinson pointed out, "CNN Worldwide ended the year 2009 with more employees than it started with -- as we had the year before."





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