Media strategists are following this melodrama at the Big 3 cable news networks as they snatch high-profile talent away from one another and their broadcast counterparts. But so far, the personnel moves apparently haven't sucked in a lot more ad dollars.
Fox News Channel, which spawned the current cult of personality, saw ad revenue slip 1.9% to $15.5 million in the first quarter vs. a year ago, according to Taylor Nelson Sofres' CMR. CNN's revenue fell 10% to $64.9 million, though it continued to lead its cable rivals. MSNBC was the exception, benefiting from Olympic coverage, as its ad revenue climbed 33.8% to $56.6 million.
Fox News remains unbowed. Roger Domal, VP-national sales director, predicts: "By this time next year, we'll be winning the revenue battle just like we're winning everything else."
fox leads in ratings
"Everything else" consists principally of the ratings battle. In May, Fox News drew an average of 1.022 million viewers in prime time, more than double the number it attracted in May 2001, according to Nielsen Media Research. CNN drew 814,000 (up 61%) and MSNBC 305,000 (up 9%). In addition, 5-year-old Fox News recently surpassed CNN in a key Nielsen measurement of upscale viewership. In January and February, Fox News reached 96,000 adults ages 25 to 54 with annual incomes of $75,000 or more, while CNN reached 64,000.
"The numbers are beginning to favor Fox, and the money is going to follow the numbers," says Michael Goodman, senior analyst at the Yankee Group.
The talent grab is "very important to evaluating and projecting ratings and in negotiations," says Tyler Schaeffer, senior VP-director of media brand planning at Interpublic Group of Cos.' Foote, Cone & Belding Worldwide, New York. "I think all the networks will continue to seek the best talent ... I think it makes sense up to a point that they differentiate their news vs. other news programs. They need to put a face on their programming."
"Advertising investment is reflective of audience interest," adds John Rash, senior VP-director of broadcast negotiations at Interpublic's Campbell Mithun, Minneapolis. "The market is keenly watching the fluid audience dynamics between Fox and CNN and MSNBC."
Others say Fox News' pugnacious brand, as well as its newcomer status in cable news, may hinder its ability to woo upscale advertisers. "It all comes down to brand recognition," says one media strategist who spoke on condition of anonymity. "CNN still has a brand recognition that Fox doesn't. It will take a long time for Fox to earn that kind of brand recognition. It will take more than a season of strong ratings before that happens."
Fox News' reliance on outsized personalities like Bill O'Reilly-host of the top-rated cable news program, "The O'Reilly Factor"-has been well-documented. So have its rivals' hunting expeditions for big-name talent. Most recently, MSNBC lured talk show veteran Phil Donahue back on the screen and installed former New York Post Editor Jerry Nachman as its VP-editor in chief. "Imitation is the sincerest form of flattery," Mr. Goodman says. "It's inherent in the television industry: When something works, everyone else copies it."
Programming changes also have ensued at the cable networks to showcase these news-celebs.
The strategy of identifying anchors with programming will put a premium on the hiring of personalities in cable news for the foreseeable future, says Andrew Tyndall, publisher of the Tyndall Report, a TV news industry newsletter.
Many industry observers believe News Corp.'s Fox channel has changed the way cable news is presented. Recognizing that the Internet, radio and other media deliver the headlines, Fox News has structured its programming around analysis and debate about the news.
Fox News is "primarily an opinion network," says Mr. Tyndall, who in January conducted a study for the Public Broadcasting Service's "NewsHour" in which he analyzed a week of prime-time programming on CNN, Fox News and MSNBC. The emphasis on Fox News is not so much a conservative viewpoint, but lively commentary on the news across the political spectrum, he contends.
AOL Time Warner's CNN, the venerable veteran of cable news, considers itself a news-gathering network, and Larry Goodman, president of sales and marketing, derides Fox News' approach: "It's talk radio with pictures."
But many of CNN's recent personnel moves are interpreted in the industry as mimicking Fox News' personality-driven approach. Instead of the news being the star, as it has been in the past, CNN is now emphasizing its on-air talent. It has hired Connie Chung from ABC; "Moneyline" has become "Lou Dobbs' Moneyline"; former ABC-er Aaron Brown hosts the nightly news; and Paula Zahn, formerly of Fox News and CBS before that, anchors CNN's morning programming.
Additionally, CNN recently doubled its own famously argumentative program "Crossfire" to 1 hour from a half-hour. Mr. Tyndall, who calls "Crossfire" CNN's "demon seed" that contains the DNA for the entire Fox News approach, observes: "It doesn't look like CNN is absolutely confident playing to its own strengths. It has a reputation ... [as] the place where news is the star, but the `Crossfire' change and the hiring of Connie Chung are evidence of a lack of self-confidence."
CNN's Mr. Goodman responds, "News and personality are not mutually exclusive. For years, [CBS anchor] Dan Rather, [ABC's] Peter Jennings and [NBC's] Tom Brokaw, they've really been synonymous with news. ... They've never hurt their brand credibility, and I don't think high-profile talent in our case will hurt our brand."
FCB's Mr. Schaeffer expects some ad spending to shift from CNN to Fox News but that CNN's status as a premier brand will keep it attractive to many advertisers. "I think it depends on the advertiser," he says. "In some cases, those looking for a broader reach, a younger-oriented audience and programming that is a little more in your face would add or include Fox and would rejigger the dollars for a particular buy across a variety of networks .... But those clients targeting a more affluent, older target and seeking a more serious environment would likely not shift their dollars" from CNN.
"Confused" is how Ms. Tyndall characterizes MSNBC, which is co-owned by Microsoft Corp. and NBC parent General Electric Co. Beginning this summer, MSNBC's prime-time lineup will include a newscast by Brian Williams sandwiched between a show hosted by the liberal Phil Donahue and another hosted by conservative Alan Keyes. Of course, in 2004 the musical chairs will commence anew as Mr. Williams says goodbye to cable when he moves into Tom Brokaw's anchor chair on NBC "Nightly News."
MSNBC is beginning to rebrand itself as "America's NewsChannel." The emphasis of this rebranding is on the diversity of the network, and how that diversity reflects the makeup of the nation. "Our channel offers diversity of thought, and in the world of thought, diversity is a virtue," says Erik Sorenson, president-general manager.
With the hiring of Mr. Nachman, who in addition to being editor in chief will also host his own show, Mr. Sorenson says MSNBC has committed to the Fox News style of programming. "The hiring of Jerry is really an extension of what we're talking about," Mr. Sorenson says. "He's a big personality and a smart guy."
Half tongue-in-cheek, Mr. Sorenson says that "smart guys"-and by that he explains he means both men and women-are what the new style of cable news is all about. Having big personalities to attract viewers even when the news of the day doesn't provide compelling TV.
As to whether the talent raids will continue, Kevin Magee, VP-news programming at Fox News, says: "I think you've seen the majority of [personnel moves]. I certainly don't see much happening here ... we're happy with our lineup now."
Which may mean it's time for CNN and MSNBC to do some cherry-picking at Fox.