The 24/7 capabilities of Fox News, CNN and MSNBC to cover the war burnished the reputation of cable as a news purveyor. Cable coverage even extended beyond the news networks. MTV, for example, dispatched 23-year-old correspondent Gideon Yago to Iraq before the start of the conflict. The Viacom-owned network discovered through market research that its youthful audience clamored for more information on Iraq.
But the biggest cable winner is probably Fox News-some observers waited for CNN to use its hard-news expertise to dethrone the ratings leader during the war, but Fox News' grip on the crown seems even tighter now.
Fox News remains the ratings leader to date in 2003, and the News Corp.-owned network is waiting for advertising to match its ratings performance. Fox News has continued to trail CNN in ad dollars, but Morgan Stanley media analyst Rich Bilotti has estimated that Fox News' ad revenue will surge by more than 60%this year and overtake CNN.
"You will see big revenue gains for Fox," says Michael Goodman, senior analyst at the Yankee Group. "Their momentum doesn't seem to be slowing."
The cable news networks have made strong showings at this spring's upfront ad sales derby. CNN estimates cost per thousand hikes at around 15%, Fox News says it's in the 10%-12% range, and MSNBC says its increases are "at or above market levels." This stacks up against increases in the 15% range for the broadcast networks in prime time.
Business is coming from the reliable cable news spenders, such as pharmaceuticals, retail, telecommunications, financial services and foreign auto marketers.
As of late May, Fox News said its volume of deals in the upfront was twice the level of the prior year, though at that moment it had completed an estimated 25% of the total expected business. "We are seeing a dramatic shift of dollars from the broadcast news programs to cable," insists Paul Rittenberg, senior VP-ad sales at Fox News.
While Fox News scored well in its ratings during the Iraq war, its pre- and postwar formula of relying on strong, conservative personalities like Bill O'Reilly softens the ratings ups and downs of covering news events-and that's appealing to change-averse advertisers.
"Fox has figured out a format and a slate of talent and talk shows that hold audiences 12 months a year," notes Erik Sorenson, president-general manager at rival MSNBC. "Hats off to them."
Fox News has the advantage of not having to sell the concept of 24-hour-a-day cable news, as CNN did in its early days, says Laura Caraccioli-Davis, senior VP-director at Publicis Groupe's SMG Entertainment, Chicago. The Fox network "is reaping the benefits of all the work CNN did to invest in cable news vs. broadcast. All the legwork has been done."
That said, CNN isn't in bad shape, says Steve Sternberg, senior VP-director of audience analysis with Interpublic Group of Cos.' Magna Global USA, New York. "It's not like CNN is having a horrible year," he says. "They're doing pretty well. It's just that Fox shot past them." CNN is now a solid No. 2, without much hope of passing Fox, at least in the near future, he says.
The question for 23-year-old CNN, the self-proclaimed "Most trusted name in news," is whether a reputation launched by its coverage of Gulf War I is enough to lure more advertisers in a world where Fox News' cadre of personalities and patriotic sloganeering set the tone.
Larry Goodman, president-sales and marketing, in his pitches to advertisers focuses on the strength of the CNN brand, which he insists is among the best known and respected among consumer brands of all kinds. In addition, CNN points to the wealth of its 25-to-54-year-old key demographic, with a median annual income north of $110,000. "That's way higher than ESPN, A&E, Discovery ... and way higher than Fox News and MSNBC," Mr. Goodman says. "Our story has always been that we reach an affluent viewer and we reach a lot of them."
Mr. Goodman concedes there's little chance of CNN overtaking Fox News in the ratings at present, but he adds: "If we weren't growing, I guess I'd say that's a problem. Our ratings are up dramatically, and our revenues are up dramatically." CNN disputes Mr. Bilotti's numbers, and Mr. Goodman insists his network, part of AOL Time Warner, will be ahead of Fox News in ad revenue this year, while declining to share what CNN thinks ad revenue totals will be for 2003.
For MSNBC, the battle is for the second seed. "Fox has opened up a considerable gap on CNN ... The race is really now for second, not so much for first," Mr. Sorenson says.
That race includes a continued emphasis on star power, in the template of Fox News. MSNBC, owned by Microsoft Corp. and NBC parent General Electric Co., is promoting its latest revamped prime-time schedule, which includes mainstay Chris Matthews, Keith Olbermann and Jesse Ventura, whose "Jesse Ventura Live" is now in a "soft launch."
MSNBC "might be getting a little bit closer, but they are not overtaking CNN at this point," Mr. Sternberg says.