Big 4 broadcast news in the aggregate, excluding the broadcast networks’ various prime-time newsmagazine franchises, accounted for just 40.5 percent of the available TV news household gross rating points in 2001, compared with 59.5 percent for cable news in the aggregate, which includes CNN, CNN Headline News, Fox News Channel, MSNBC and CNBC.
In the 25 to 54 demographic, the one most news advertisers look for, the share disparity was 42.4 percent for broadcast vs. 57.6 percent for cable. For the 18 to 34 demographic, the disparity was even more dramatic: 40.1 percent for broadcast compared with 59.9 percent for cable.
In all three cases, the aggregate broadcast-vs.-cable shares represent a dramatic reversal from 2000, when broadcast news-still excluding the newsmagazines-led cable news by 52.8 percent to 47.2 percent in households, by 55.7 percent to 44.3 percent in 25 to 54 and by 56.7 percent to 44.3 percent in the 18 to 34 demo.
CNN doesn’t sell its increases in the 18 to 34 demo per se but presents the data to advertisers as a “value added” element, said CNN’s Larry Goodman, who heads advertising sales.
The data above, derived by CNN from Nielsen Media Research, has been the centerpiece of the cable news network’s presentation to advertisers at this upfront, and it is meant to convince Madison Avenue to diminish the dollar disparity between broadcast and cable.
However, the broadcast-to-cable aggregate comparison that’s the heart of the pitch isn’t fair, said Susan Cuccinello, senior VP of research for the Television Bureau of Advertising, because it excludes the newsmagazines, which include some of the top-ranked shows on television, and because the cable news channels aggregate 24 hours worth of news. “So of course when you put them all together they’re probably going to have more rating points than the Big 4, who aren’t airing news all day,” she said.
In prime time, cable news ratings are miniscule, she said, citing April data that showed CNN with a 0.8 household rating.
Nonetheless, there was a “transformational shift” in news audiences in 2001, Mr. Goodman said, and both he and ‘Ms. Cuccinello agreed that new-as well as younger-audiences were drawn to cable news on Sept. 11.
Mr. Goodman contended those new viewers, particularly in the younger demos, are “sticking” with news programming; Ms. Cuccinello contended that the trend lines for the younger viewers who came to cable news after Sept. 11 are down.
“I’m not going to say that they are going to go back [to pre-Sept. 11] levels permanently,” Ms. Cuccinello said. “They might make some audience gains. … If something interesting or scary happens, you’re going to get a blip [in cable news ratings].”
Not surprisingly, when it comes to the vaunted news war between Fox News Channel and CNN, in which Fox has overtaken CNN in key ratings categories, Mr. Goodman is taking an above-the-battle approach, although he’s ready to compare his upscale demos to Fox’s for “advertisers who ask.” This year, he said, the battle for advertising dollars in TV news isn’t between CNN and its cable competitors, it’s between all of broadcast and all of cable.
“Cable is controlling the dominant share of [rating] points,” he said, but not the dollars. “Broadcast evening news is about $600 million, morning news is about $700 million, weekend discussion programs are about $200 to $300 million” in ad revenues, he said. “You’ve got about a $1.5 billion roughly across those three areas, then you’ve got about another $800 million in prime-time newsmagazines. … If you add up CNN, Headline News, CNBC, MSNBC and Fox, it’s approximately a billion [dollars].”
CNN will be up in the low double-digits this upfront, Mr. Goodman predicted, and costs per thousands will continue to be higher “for the most part” than those of broadcast news. As for share of the upfront news pie, “I think broadcast news will shrink in this upfront by 80 [million] to 100 million [dollars], and [the money] will migrate to cable-on top of what cable’s endemic growth is anyway,” he said.
CNN does approximately one-third of its business in the upfront, another third in scatter and its final third in calendar buys, Mr. Goodman said. Revenues are up for second-quarter 2002 by 20 percent over the previous year, Mr. Goodman said. Third quarter he expects to be up approximately 5 percent, and fourth quarter he expects to see a 20 percent gain. “I think we’re going to net out about 11 [percent] or 12 percent for the year,” he said.