News Articles

News Investment Pays Off

9/09/2005 08:00:00 PM Eastern

First, there was the fawning profile of Leslie Moonves in the Sept. 4 New York Times Magazine—on a weekend when the country was preoccupied with the catastrophe of Hurricane Katrina—in which the CBS chairman and Viacom co-COO outlined his prescription for fixing the ailing CBS Evening News.

The key, he said, was to adopt the formula that worked so well in prime time: not too many negative stories, with attractive people delivering the news in a more compelling way. “We have to break the mold in news,” Moonves said. The revamped newscast, he said, should fall somewhere between a scantily clad woman reading the headlines and “two boring people behind a desk.”

Two days after the Moonves piece appeared, beleaguered nice guy Neal Shapiro—who for months had been heading his division in name only—finally “resigned” from his post as president of NBC News. In an e-mail to staffers announcing Shapiro's exit (and naming Steve Capus, the able ex-executive producer of the NBC Nightly News With Brian Williams, as acting president), NBC Universal TV President Jeff Zucker said he is “undertaking a wide-range search” for a new NBC News chief.

The buzz: Zucker has already approached and been spurned by a bevy of entertainment types, including former ESPN programming chief Mark Shapiro and ex-ABC Entertainment President Susan Lyne (now CEO of Martha Stewart Living Omnimedia). Clearly, Zucker's talent hunt is focusing on finding someone who's as much show biz as news biz to lead an empire that includes everything from the Today Show to chronic trouble spots MSNBC and CNBC.

Given the bottom-line pressures, it's easy to understand why Zucker and Moonves would want to bring more prime time pyrotechnics to the business of news. But if their news operations push the entertainment element too far, they will chase away a blue-chip audience that values substance much more than style. While the audience for the evening newscasts is aging and declining in size, it's still substantial, and the shows all generate tens of millions in revenues.

Why should television executives exercise extreme care when contemplating an overhaul of their news operations? Consider the coverage of Katrina's nightmarish aftermath. All the major network news divisions have performed admirably, but it's important to note that NBC and ABC, which have long dominated CBS in the news business—and have deeper pockets—have seen the biggest increases in their evening news audiences and done more to burnish their journalistic reputations.

Something akin to that has happened in the cable news arena, too. With a much more extensive newsgathering machine, CNN has closed the ratings gap with perennial No. 1 Fox News Channel in prime time with the 25- to 54-year-old crowd, the key news demographic.

When Katrina ceases to be a huge story—and it's hard to imagine when that day will come—the ratings gap likely will reappear. But what about the long term? CNN's riveting Katrina coverage reminded many people of the network's strengths, and that fact may translate into a clearer identity and wider audience.

Not that CNN's gains would necessarily come at Fox News' expense.

No, one of Fox's strengths is that it has established a strong identity that will continue to draw a loyal and substantial core audience.

The takeaway from all this: Successful news organizations know clearly who they are and what their mission is—and they execute it, especially when it matters most. In our cover story (page 16), we talk about the risk inherent in entertainment networks' blurring their brands.

There's a similar lesson from Katrina for network news. Years ago, facing deep budget cuts, a news director told me, “Management needs to realize that news operations are like cathedrals: You're really only going to use them to capacity a handful of days per year. But ultimately, it sends a powerful message, and the investment pays off.”

E-mail comments to bcrobins@reedbusiness.com

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