CNNfn may just be the tortoise in the race to own business news. It has all the qualities of an improbably long shot. The Turner-owned cable network has about 14 million homes compared with 72 million for CNBC, the hare apparent of business news.
CNNfn's parent company has adamantly resisted spending big bucks for launch fees to grow the network. Ratings for the flagship program are faltering. Yet CNNfn executives see the hare taking a nap.
"This network is true to its mission: providing business news," said Andrew Heller, president of domestic distribution for Turner. "When the other network [CNBC] is adding Olympic product in prime time, we think there's an opening."
Traditional prime time is CNBC's weak underbelly. Ratings for the 8 to 11 p.m. period continue to slip: 43% in the first quarter, 37% for second quarter through June 9. Evenings consist of general news and talking-head shows, like Hardball With Chris Matthews and Rivera (as in Geraldo) Live.
Beginning in September, CNBC will run supplementary coverage of the 2000 Summer Olympic Games in Sydney, Australia. Evening ratings may recover during the Olympics, but the programming is still not business news, the network's raison d'être and its main muscle. Business news is boosting CNBC's daytime rating 19% over last year for the second quarter, and the category itself is so lucrative that CNBC's profits will exceed NBC's this year, according to sources close to the networks.
Those numbers spell opportunity to CNNfn executives, who finally took the five-year-old network from an 18-hour day to round-the-clock programming last week. There was little to lose and much to be gained by expanding the day, a move for which CNNfn's founder and former president, Lou Dobbs, agitated while he was still with the network. The cost of adding programming-three new live, international shows in this case-was minimal because CNNfn has access to CNN's extensive worldwide resources. Dobbs' successor, Shelby Coffey, said he hired only seven technical people for the shift.
"We're incurring prudent expenses," he said.
The upside is twofold. First, CNNfn gains 60 minutes of advertising time by adding the six-hour block, which is midnight to 6 a.m. on the East Coast; 9 p.m. to 3 a.m. on the West Coast. Sixty minutes in the wee hours won't necessarily blow ad revenue through the roof, but otherwise "for a network that's sold out, it helps," said Larry Goodman, president of news sales and marketing at Turner. Goodman expects no problems selling the time because demand is so hot, plus the CNN news nets are often packaged together.
One New York-based media buyer concurred. "That time is valuable for those interested in global trading," the buyer said, adding that CNNfn could also keep rates down by rotating ads through the lower-priced time period.
Another West Coast media buyer countered, "CNNfn is not rated and in less than 20 million homes. I can't imagine that there is too much demand given they force the network as part of most CNN/Headline News buys."
Going 24/7 also gives CNNfn a little more credibility with cable operators who are starting to take note of that small but loyal clutch of business-news viewers. Business news skews to the richest cable households, or those most likely to pick up the new digital services that cable operators are salivating to sell.
Cable operators who once dismissed CNNfn because of CNBC's incumbency now say the network's added hours will be an enhancement for the genre.
The race, however, is not yet to the tortoise, nor does it look even close at the moment. CNNfn still shares a channel in the finance-frenetic Manhattan market with a Madison Square Garden channel, a local network listed in the city's version of TV Guide, while CNNfn is not. AT & T's digital tier remains elusive to CNNfn, even though digital is the entire focus of the network's distribution growth.
And the hare is not sitting still. CNBC's Business Center is consistently beating Moneyline, CNNfn's flagship program, which is simulcast on CNN. CNBC also just dropped $2 million on a new set for the domestic channel, and millions more are being spent to expand overseas. CNBC2, an international digital channel, is being launched stateside later this year.
Going 24/7 won't open any distribution floodgates, Heller said, "but a channel that does all business news in an environment where business news is skyrocketing, I think it's a benefit."