Ailes Says Mellowing Not Likely

Oct 9, 2006  •  Post A Comment

Roger Ailes, who has turned Fox News Channel into the dominant cable news network, is accustomed to casting a big shadow on the media landscape. He helped make “The Mike Douglas Show” a hit in the 1960s and worked on a winning presidential campaign for Richard Nixon.

Now Mr. Ailes, chairman and CEO of Fox News Channel, is trying to guide the network out of its first serious ratings slump. It’s the latest chapter in a 10-year history that includes a breakneck startup and an unprecedented rise to the No. 1 spot in the cable news ratings.

When Mr. Ailes started Fox News Channel for News Corp. Chairman and CEO Rupert Murdoch 10 years ago, the company had to pay cable operators to carry it. Then Fox News surpassed CNN as ratings leader. Today, Fox News Channel, under Mr. Ailes’s “Fair and Balanced” banner, charges cable operators $1 per subscriber to carry the network.

Mr. Ailes—who also runs Fox’s television stations group and just launched MyNetworkTV, the country’s first English-language telenovela slate in prime time—recently sat down with TelevisionWeek National Editor Michele Greppi to talk about everything from the dangers of mellowing to the politics of competing for news Emmys.

TelevisionWeek: The first 10 years for Fox News Channel were go-go growth. First you got ignored by the competition, then you scared the [expletive deleted] out of the competition, and then you forced the competition to change their game plans. What does that feel like looking back on it? What’s the plan for the next 10 years?

Roger Ailes: Well, I’m reinventing the channel for the next 10 years now. I’m not resting on my laurels. A lot of our growth in the first 10 years came as the number of cable subs grew, because we’re now at 90 million subs. But ad sales are still growing, our number of hours a day is growing, we’re commensurate with the others on our demo, basically, and we’re beating them all every day. So we’re doing fine. But we need to ratchet up the game and freshen it up. We have about 1,500 people, 300 of whom were here at the launch 10 years ago, which is actually a pretty good percentage.

TVWeek: For the cable news audience as a whole, is there a limit that may have been reached?

Mr. Ailes: Well, there’s a limit unless more people move from [prime-time] broadcast, which I think is possible. Broadcast is having a little bit of resurgence.

Our audience hasn’t gone anywhere else unless it’s to other platforms—in other words, the Internet or cellphones or that sort of thing. We’ve just introduced a headline service for Fox News on cellphones in the last week or two. People who want to see Fox News headlines can go to their cellphone. We recognize we’ve got to be able to do that. We’ve invested some of that head-count growth in Foxnews.com. Privately, Nielsen tells us that some of the people who have flattened out our ratings here have gone over to Foxnews.com. Younger viewers tend to use that more. So you really not only have to have a cable channel, you have to have an Internet channel today. We feel pretty comfortable with where we are in terms of our lead. It’s just a matter of trying to grow it and intensify it and come up with new programs and so on.

TVWeek: You don’t like to not win, but you also don’t like to lose any of what you’ve gained. You have lost some of your ratings lead in the last year. How does that feel?

Mr. Ailes: We’re in a little bit of a dip. It depresses me to see anything less than winning all the time, but we are winning. It’s hard to get angry or upset when you’re winning as strongly as we are. It’s just that I know we can do better, so I go along with it for a couple of days and then I get angry and start the fight all over again. I’m in the process of regenerating and regrouping.

I’ve asked all of my direct reports to tell me what they would do and I’ve asked them all to identify two or three stars in this place that are young, that are upcoming, that are going to make the next 10 years spectacular. I’m in the process of reviewing those reports now, and I have some ideas of my own about what I will do.

So I’ve made a few changes and I intend to make some more. We’re ratcheting up the game a little bit. I think it’s a little tougher because our competitors—I think wisely—took the best of what we do and are trying to emulate it. That’s good in the sense that even occasionally you see a little fairness on some of these other channels, and I don’t know where they got that idea. Look, there are a lot of talented people at every network. CNN, what are they, 25, 30 years old, and they’re still in the game? They’ve got some talented people there.

TVWeek: Names? Examples?

Mr. Ailes: Well, I don’t want to use a lot of names, but I just think that, you know, you can like or not like Lou Dobbs—I happen to like him, he’s a friend of mine—but he’s figured out a way to get higher ratings. With all of the marketing and pressure and hype and press that Anderson Cooper gets, Larry King still beats him. So there are good people in our business and it’s a tough fight every day.

Nobody knows for sure if this is a permanent leveling off or a little bit of a resting period. You know, after Katrina, the whole news business kind of leveled off. There weren’t a lot of [ratings] spikes. Usually you can count on three or four spikes a year for some major events.

TVWeek: For a long time you did not lose all the ground you gained in those ratings spikes.

Mr. Ailes: Which would argue that the cable news audience has either gone somewhere else—and I think some younger ones have gone to cellphones and the Internet—or this is a temporary dip as opposed to a permanent dip.

I think it’s up to us to go get the audience. It’s not up to them to come and knock on our door and to ask if they can come in and watch cable television. I think our job is to put things on the screen that are compelling and cause them to call each other and say you’d better watch this channel. So I think that the producers have to take responsibility for finding the audience, rather than the other way around.

I think that there is a flood of this stuff in the home. I think all of us over-hype the news, all the ‘news alert, news alert, news alert.’ … The other day they had a funny news alert on CNN: Hillary supports Bill in attacking Fox, and I thought, “Well, jeez, the news alert would have been if she didn’t.” I mean, that was hysterical.

Maybe there should be a little unilateral disarmament. If somebody had the nerve—I’d let CNN go first, but all of us ought to get together and say, “Look, let’s try to make news alerts news alerts.” But nobody can afford unilateral disarmament, so we all stay in the fight, and I don’t think it’s necessarily to the viewer’s benefit.

TVWeek: You’ve got Bill Hemmer with video screens behind him on “Fox News Online.” You’ve got Martha MacCallum in the control room for part of her new afternoon show. You could argue that Mr. Hemmer’s show looks a little like CNN’s “The Situation Room.” MSNBC General Manager Dan Abrams has played around with the camera a little bit in the control room. Fox News always used to make other people look like them. Now it seems you’re looking like the competition sometimes.

Mr. Ailes: I didn’t invent television. I got here and probably everything in the screen is something that I saw a version of in the last 25 or 30 or 40 years. I think they’re still copying us. They’re copying our graphics, they’re copying everything. The truth is the Internet may have changed us more than the other channels: You see graphically probably more of an Internet look than you do a CNN look. I mean, CNN always looked like physically a funeral parlor … because people are dead in there.

I don’t design the screen. I have people who do that, and our people have done very well with it. Everybody has got a lot of freedom to do whatever. If we try it and we hate it, we chang
e it. If I look at it and I don’t like it, I’ll say “I hate that.” But we don’t deliberately copy anybody because they’re not beating us. Why copy somebody who’s not beating you? If somebody was beating us, I’d look at it carefully.

TVWeek: What is in the most immediate future? More questions about the business channel?

Mr. Ailes: I talked to [News Corp. Chairman Rupert Murdoch] this morning about that. We’re looking at the model to see if we can make money if we get enough subscribers. Once we have those [distribution] deals in place, we move to phase two of that. Phase one was “We don’t know what you’re talking about.” Phase two is —

TVWeek: “Not before next year.”

Mr. Ailes: Phase two is we’ve hired Alexis Glick, and we are doing some planning so that if we woke up one morning and somebody said we have 30 million subscribers to do a business channel, we wouldn’t have to put up a sign that said, “Could you hold on for a few minutes while we come up with some programming?” So we are working on it, but we are not in the position to try to launch it now.

TVWeek: Could you launch it as quickly as you launched Fox News?

Mr. Ailes: Yes, I could.

TVWeek: Could you launch it faster because of the digital world?

Mr. Ailes: I doubt it, because there are just so many things you need, including building a studio and control rooms and, you know, additional infrastructure and testing some program concepts. And of course you’ve got an added burden of figuring out what you’re going to do on the Internet site now. Fox News was probably the fastest launch in history. I think I could match that. I doubt that I could cut it shorter than that.

TVWeek: And does 30 million subscribers guarantee that you can make money?

Mr. Ailes: No, it guarantees that you won’t bleed to death. If you get 30 million in the right places and you get reasonable programming, you won’t bleed to death. That’s really what it is: You have to grow on that. I’m not sure you need 80 million, but you need, you may need 50. If you start at 30 million, you’re in the game and you’re not making decisions because you’re bleeding too fast.

TVWeek: And does technology now, whether it’s Internet or digital, [help] you target your audience in a way that you wouldn’t have been able to if you had launch before now?

Mr. Ailes: Yes, you can. You can track them better and you can target them better. It’s not a perfect science yet or everybody would do it with every viewer. But … the technology does allow you to get a better idea of who you’re talking to and so on, and you get better feedback. …

I think everybody is looking at that, but we are as well. I don’t want to say a lot more about what we’re doing in that regard because everything I say or do, I see on CNBC. And it’s some effort, so I’ve been told that we’re going to do the business channel all in cartoons, and I’m hoping by next week I’ll see some cartoons on CNBC.

TVWeek: What is it that a business channel from you would offer opposite CNBC and Bloomberg?

Mr. Ailes: I can’t talk about what we intend to do, or how we intend to target it. It just gives too much advantage to the other side. We’ll have to see. We basically got panned for three years on the Fox News Channel that we were useless and terrible and [competitively] nonthreatening. And we flipped overnight. Suddenly it was, “You’re terrible, you’re political and you’re dangerous.” So, you know, we expect skeptics in the beginning, we expect to be able to overcome the skepticism over time, and we expect to be eventually attacked when we’re successful. The only thing I can do is do the best I can, and I think we’ll be fine.

TVWeek: What did you learn from the launch of Fox News in the early stages of development that can make the launch of a business channel easier?

Mr. Ailes: Ignore criticism, invest in your most talented people, figure out who your talented people are quickly and support them. Because in the end I get too much credit for Fox News. My staff doesn’t get enough. Murdoch doesn’t get enough. I mean, he gambled all the money and he basically was very supportive even in the first few years. … And Murdoch never doubted and never pulled away, and that’s—I’ve worked at other large organizations that would have wet their pants and run for cover and started holding committee meetings to see why they cover committee meetings—and that doesn’t happen with Rupert. And that’s a tremendous advantage, a tremendous advantage.

TVWeek: What is it that drives his desire for a business channel?

Mr. Ailes: I’ve never asked him that. I think he sees a niche there that’s underserved, much as he did with Fox News. I think he sees CNBC floundering around trying to figure out what they’re going to do, and he’s very interested in business—and maybe it’s not covering the things he thinks businessmen are all that interested in. I think primarily what drives it is he sees that even though it’s not great, it’s making a lot of money. And in the end, Rupert’s, you know, a capitalist who … doesn’t go into businesses to do badly.

TVWeek: So at age 10, would Fox News benefit from a Democratic White House or Congress?

Mr. Ailes: We launched with a Democratic White House. We got blamed for criticizing President Clinton at the time, but we weren’t big enough to be the critics. If you go back and look at the number of homes we had during that, the latter days of the Clinton White House, we were pretty immaterial.

TVWeek: Right. But you made noise in some large cities.

Mr. Ailes: Yeah, but you know, the things that were going on were so widely covered by everybody, it’s very hard to tell what our impact was. … I have not seen much to say whether that helps us or hurts us. CNN did a survey that said that our viewers were perhaps 7 percent, only 7 percent, more conservative than theirs. … I think that all the cable news people flip and dial around and watch everybody. ”…. I can’t tell whether it will help or hurt. We’re not going to change what we do. So somebody else has to figure out whether that’s going to be good or bad.

[In a testy appearance on “Fox News Sunday” recently by former President Clinton], Chris Wallace asked him a question that any reasonable reporter would have asked, and we went back and took a look because Clinton kept challenging Chris and saying, “Yeah, you never asked these questions to Don Rumsfeld.”

He asked tougher questions to Don Rumsfeld, and Rumsfeld didn’t leap on him and start pounding on his notebook, so this seems to me some kind of a gimmick on their part rather than anything we do differently. I think it was part of a strategy that he just, he’s such a Shakespearean actor that once he got started, he really got into the soliloquy.

And it was an emotionally driven response, there’s no question about it. But after being president for eight years, it’s hard for me to believe that this simple question that Chris asked would turn you into that big of a victim.

TVWeek: But it does seem to have worked for Fox News and for Mr. Clinton.

Mr. Ailes: It was either a win-win or a lose-lose. We won’t know for a while.

TVWeek: What business lesson can be taken from that show?

Mr. Ailes: It’s probably good cross-promotion for the channel. It probably does assist the channel because I think the—I think actually younger viewers like the sense of out of control. On YouTube, they put “Clinton Freaks Out.” That was one of the headlines. I think that when they think somebody is going to freak out, they’re apt to watch it. So in that sense I guess it’s good. It always runs the risk of adding more heat than light to news but nothing unexpected will ever happen on the evening news on the broadcast networks.

TVWeek: There’s the question of whether Katie Couric will sit on top of the anchor des
k or lean on the desk.

Mr. Ailes: That’s true. Sometimes she leans, sometimes she wears the white coat. The unexpectedness of cable news is when you add a colorful person like President Clinton, anything can happen. So I think that’s what makes cable news a hell of a lot more interesting than broadcast news.

TVWeek: Fox News doesn’t participate in the competition for News Emmys sponsored by the National Academy of Television Arts and Sciences.

Mr. Ailes: No. Basically, you have to have enough people to pack the panels to vote for you if you want to win them. And I’m not sure we’ll ever have enough employees who aren’t actually working who could go sit at a hotel and pack the panels.

We also are not going to do politically correct specials just to win awards, and we’re not going to put politically correct titles on specials just to win awards. We [participated for a few years] and we never could get a nomination because there’s a liberal bias at the academy against Fox News. Whether they didn’t like the fact that we were challenging the establishment and there was a new player in town, whether it had to do with New York elitism, whether it had to do with liberal bias, it didn’t matter.

Now they’re even making you buy your own statue. You’ve got to buy the table and now you’ve got to buy the statue and pretty soon you’ll have to buy the tablecloth. I mean, at some point, you know, these ought to be real. These ought to be voted on by legitimate people across the board who do not have skin in the game.

[Editor’s note: The National Academy of Television Arts and Sciences didn’t respond to a call seeking comment.]

TVWeek: Is there an award that would matter to you?

Mr. Ailes: Well, the main one we get is the ratings. And the American people seem to choose us legitimately without us running around in their homes and leaning on them to be politically correct.

We do deserve credit for such work as the oil-for-food investigative journalism because the other guys wouldn’t stay on that because they didn’t want to offend [United Nations Secretary General] Kofi Annan. And the truth is $62 billion dollars was stolen from poor people all over the world by the United Nations and distributed to foreign countries to vote against the United States. We stayed on that even though we were threatened and so on, and that was a fine piece of work. We’ve done that over and over and over again and we’re never going to get recognized for it, because that isn’t the kind of stuff they want.

TVWeek: Institutions, like people, sometimes mellow as they get older. If time goes by like dog years in the TV world, Fox News is—

Mr. Ailes: Seventy.

TVWeek: Could Fox News, or you, mellow?

Mr. Ailes: I guess it depends on the definition of mellowing. I hope not in the sense that [you] … don’t have the intensity of the fire to do the things you do every day. We’re not fighting from behind every hour. And therefore I probably have more time for people, and I hope I listen better and things like that. … Those are the things you hope you can do.

I’ve promoted a bunch of young people in this company who I think are the next generation. The day I think Fox News will be better without me than with me, I’ll get out of the way and today, you know, if I get run over by a bus, it’ll be fine because I have young people in place who understand the mission.

TVWeek: When you were talking about the possible business channel, you sounded like you have a fairly clear image in your head of what things would look like. Can you say how vivid a picture is there?

Mr. Ailes: No. … I have flickering images that go across my brain that I would like to see in a business channel. I haven’t zeroed in on them—they’re not entirely in focus—they’re a little bit more like dreaming after eating spicy food. You can sort of have some dreams, and it seems reasonable in your brain at 3 o’clock in the morning when you’re asleep. Whether or not it will still seem reasonable when I wake up and actually have to implement them is unclear in my mind.

So I kind of have a direction but I’m the kind of guy—let me put it this way—I never had my term papers done a long time in advance. I always did well once I had to deliver. …I would probably be extremely focused in front of a firing squad. I mean, it would be, “OK, now we’ve got to get serious here. Let’s deal with this.”

TVWeek: What will softening ratings do to the Fox News profit picture?

Mr. Ailes: We have never missed a budget in 10 years, and I don’t think we’ll miss a budget next year. Our budgets have growth in them. Last year was a very strong growth year, and we should be able to do that again. Obviously, it will be a lot better once we get new cable deals in place.

TVWeek: And when does that happen?

Mr. Ailes: We’re in negotiations now.

TVWeek: Do you think there’s going to be a showdown that ends itself in the channel being lost?

Mr. Ailes: We hope not, but you know, we’re prepared for it.

TVWeek: Would you run a campaign in that market that would say you can find us 24/7 … on the Web? And could you do that?

Mr. Ailes: Well, I can’t discuss strategy and tactics. Let me just say that we won’t lay down and hope things work out.

TVWeek: Does Bill O’Reilly make house visits and go door-knocking like Gordon Elliot used to do?

Mr. Ailes: That would get us back on in three days.

[Editor’s note: The National Academy of Television Arts and Sciences didn’t respond to a call seeking comment.]