Fox News Channel passed its chief cable news rival, CNN, in the ratings in 2002, and now it is aggressively seeking to press its advantage.
For all of 2004, Fox News had a 24-hour rating of 0.7 compared with CNN's 0.5 rating, according to Nielsen Media Research. In sales literature, Fox News emphasizes its prime-time dominance, pointing out that "The O'Reilly Factor," "Hannity & Colmes" and other shows outperform CNN's "Larry King Live."
Fox News' rating supremacy and demographic parity with CNN have enabled it to boost advertising revenue. Parent company News Corp. reported that Fox News increased its operating revenue by 45% in the last three months of 2004 compared with the year-earlier period.
Fox disputes revenue figures
Although TNS Media Intelligence shows that Time Warner's CNN still leads in advertising revenue-$356.1 million in the first 10 months of 2004 compared with $231.8 million for Fox News in the same time frame-that figure folds in CNN Headline News. Fox News has said it has eclipsed CNN in head-to-head ad revenue, and that its ad revenue for all of 2004 totaled $400 million and will reach $500 million this year. CNN says it remains the ad revenue leader.
Looking to expand the rising franchise, News Corp. Chairman Rupert Murdoch has said that Fox News plans to launch a business news channel. It will take on CNBC in an arena where CNN failed, closing its CNNfn financial news network last year.
Fox News declined to comment for this story, but media buyers say the conservative-leaning network has used its strong ratings to boost its CPM by 20% to 25% over the past 18 months.
Commenting on the surge in Fox News' ratings during the election season, a media strategist speaking on condition of anonymity said, "Fox is about to cream CNN based on the latest research."
Without a ratings lead to lean on, CNN has taken a sales approach that relies on integrated packages and its reputation as a news gathering brand. Greg D'Alba, exec VP-COO of CNN advertising sales and marketing, pointed out that lost among the focus on Fox News' ratings growth is that the cable news category as a whole is growing, in part due to viewers departing from broadcast network newscasts.
The cable news category is of particular importance to larger b-to-b marketers, which often use cable news for TV spots. "Business decision-makers need to know what's happening," said Mike Paradiso, global media director of Computer Associates International. "Cable news always is relevant to b-to-b marketers that are using television as part of their program."
As the creator of this category about 25 years ago, CNN still charges what some media buyers describe as a significant premium over many other cable channels. Even with its TV ratings behind Fox News, CNN, particularly when considered as a broad brand, continues to attract an audience with strong demographics for b-to-b marketers. For instance, CNN and CNN Headline News together reach 56% of CEOs in a given week; Fox News reaches 31% and MSNBC, 27%, according to the 2004 Mendelsohn Affluent Survey.
CNN grew its revenue by 4.4% in the January-October period of 2004, compared with the same time frame in 2003, for other, more compelling reasons as well. While CNN alone has fallen behind Fox News in the ratings battle, the CNN brand has many iterations. Emphasizing this difference with Fox News, the CNN sales team has focused on selling integrated packages that combine CNN, CNN Headline News, CNN.com, CNN wireless and CNN broadband.
CNN Stresses broader brand
Beyond its own brands, CNN has the ability to partner with other Time Warner brands, such as Fortune. "Integration is the real growth area for us," D'Alba said.
Fox News can offer integrated packages that include its Web site and Fox News Radio. And with its proposed launch of a cable business news network, Fox News is taking steps to counter CNN's brand extensions.
At the same time, CNN is backing off its strategy of mimicking Fox News' emphasis on personality-based journalism as represented by shows such as "The O'Reilly Factor." CNN, for instance, recently dropped its own pundit program "Crossfire."
"I think they are going back to more straight news," said Brad Adgate, Horizon Media director of research.
CNN pointed to ratings during coverage of the Asian tsunami as validating its strength in international news. Meanwhile, Fox said its news coverage of the Iraqi elections outperformed CNN in the ratings.
In the end, each station in the cable news sector seems to have carved a unique niche for b-to-b advertisers. In the first nine months of 2004, the entire cable news universe grew, as Fox News, CNN and MSNBC all posted larger ad revenues than in the same period of 2003. "Every cable news network is doing very well right now," D'Alba said. As one media strategist observed with a laugh, "There are many CNN watchers you'll never reach through Fox [News]."