CNN’s Quiet Soldiers: Mobile, Digital, The Rest of the World

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Hitting a 20-year primetime ratings low this May was no doubt a significant bottom for CNN. But the company’s unique position in mobile, digital and international represent great potential opportunity to help drive the future efforts of Jeff Zucker, who is widely expected to be named head of CNN Worldwide, to take the cable news brand beyond its once-great heights.

Prime is the most important driver for ad revenue and a channel’s popularity has a major long-term impact on the carriage fees it gets from operators and implications for every aspect of the brand’s business. But a look at CNN’s position in the crucial growth areas of mobile, digital and international reveals strengths that have contributed to record profits for years amid the deafening sounds of the ratings clunks. And these strengths stand to play key roles in any real revitalization of the CNN brand.

After CNN fell behind Fox News in the ratings in 2002, CNN went on to produce record profits every year between 2004 and 2011. Time Warner doesn’t break out CNN’s financials but at the end of 2011, CNN Worldwide boss Jim Walton, who will step down at the end of this year, sent a memo to staff saying, “I’m pleased that this was our eighth consecutive year of profit growth, and more so since that period covers the worst recession in 80 years.” In an interview with the Hollywood Reporter in 2011, Walton also noted that U.S. primetime ad revenues accounted for just 10% of their revenue. “We have other parts of our business that are as big or bigger than that,” he said.

Among those “other parts,” consider: In the mobile world, the fastest growing digital media, CNN Digital has been number one in mobile news for five consecutive years, with about 21 million unique users. In October of 2012, CNN was second only to the combined ABC/Yahoo! News properties among news outlets online, bringing in some 68 million unique visitors to its various sites — and beating NBC, CBS and Fox News.

Mobile and digital are important building blocks for any TV business going forward, but these arenas are especially crucial to capturing the attention of younger news viewers — the news viewers of the future — who increasingly get their info and video digitally.

About 36% of adults regularly turned to the Internet for campaign news in October of 2012, up from 25% in January of this year, according to the Pew Research Center, and a wide variety of studies puts digital media much higher for young demos.

A Pew Research Center report issued in September of 2012 found that only 34% of people aged 18 to 29 had watched a TV newscast “yesterday,” down from 49% in 2006, and only 23% had watched cable news. In contrast 60% of those aged 18 to 24 and 61% of those 25 to 29 got their news from some digital platform — online, mobile, social media, blogs, twitter, etc.

Cable TV news viewers, like TV news viewers generally, tend to skew old. For the year-to-date through Nov. 4, 82% of Fox News’ viewers were over 50; 72% of MSNBC’s viewers were over 50; and 71% of CNN’s viewers were over 50. To state a well-known point of data: The older the viewer, the lower they tend to index on digital media use. And while CNN may have a slight youth appeal, it still has much work to do. On an average day so far this year, it had only 11,000 viewers aged 18 to 24 (under 3% of its audience) and 25,000 aged 25 to 34 (6%).

Appealing to the younger set by delivering news how, where and when they want to get it represents a huge opportunity for CNN to dominate the digital news battleground; it already has a market-leading position in digital media among the cable nets. But they’ve got to jump on it. All of CNN’s competitors are ramping up their digital and mobile efforts. Earlier this year, NBC News bought out Microsoft’s stake in its MSNBC digital operations as part of a bigger push to significantly expand its digital presence. As part of that effort, MSNBC will get a redesigned website in the first half of next year.

Meanwhile, ABC’s alliance with Yahoo! has made its content much more widely available, allowing the combined Yahoo!/ABC digital properties to top CNN in terms of unique users in October of 2012.

Fox, which has long been an also-ran in the digital news business, is also making headway. The Fox News Digital Network grew to 35 million unique visitors in October of 2012, a 92% bounce from September, and its page views grew 59% to 1.3 billion.

Unlike its cable news competitors Fox News and MSNBC, CNN has a massive international business. CNN International can be seen on 265 million TVs in more than 200 countries and as part of its international presence, has invested heavily in producing its own news content — as opposed to just taking feeds from AP and Reuters — from 33 international bureaus outside the U.S.

Fox News and MSNBC lack the widespread international distribution of CNN and also have fewer bureaus according to the Pew Research Center Project for Excellence in Journalism. In 2012, Pew reported that Fox had 6 international bureaus in 2011. MSNBC has no international bureaus of its own but can draw on 13 of NBC’s international bureaus. As the world becomes more and more digitally connected, the potential for the CNN brand to grow internationally and digitally is that much more powerful.

CNN has expanded its digital offerings in recent months, with a major investment in online and mobile election coverage and revamped apps. But amid the growing competition and lightning fast evolution of consumer habits, Zucker will need to double down even further on digital in order to squeeze the most out of what CNN already has going for it. While CNN is a digital leader and it has an unsurpassed technical infrastructure for processing content to multiple platforms, the depth and breadth of its online content frequently does not match other competitors like the BBC. The news business is clearly waiting for a leader to emerge in the digital space. It could be CNN.

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