Bull Market for Financial Networks
For Financial News Network, it’s both the best and the worst of times.
Good news first. After al most 10 years, FNN (now in 35 million cable households) has finally silenced the media brokers who didn’t forecast a future--or much of an audience--in financial and economic news. What’s more, FNN loosened its tie a bit last year and successfully expanded into prime-time with lifestyle programming.
Now the bad news: Infotechnology Inc., the company that has controlling interest in FNN, recently ran into a cash shortage and has put the cable network up for sale to pay off its debts. Stock in FNN has plummeted, and shareholders have filed suit against FNN claiming the cable company wrongfully withheld details about its investments.
Asked how the sale of FNN will affect its programming, president Michael Wheeler said: “It won’t. Nothing viewers see on television is affected by it. What’s on air now is not affected. Nothing at all.”
Most analysts seem to agree that despite the dark financial cloud looming over its parent company, FNN remains a financial gem. In fact, likely buyers for FNN reportedly include its two biggest competitors--Turner Broadcasting System Inc., which owns Cable News Network, and General Electric Co., owner of Consumer News and Business Channel (CNBC).
From its start in 1981, FNN set itself apart as a service for serious investors. Each day, FNN’s stock ticker from Wall Street dashes across the bottom of the TV screen. FNN reports live on domestic and foreign markets, analyzing the day’s trading and business news, with such shows as “Marketwatch A.M.” anchored by Ron Insana and Randall Whipple.
Some predicted FNN would lose subscribers and fold when super-slick CNBC, backed by the experienced NBC network, started up 18 months ago.
But FNN was prepared. Two years ago the financial news network abandoned an ailing home-shopping service and dropped its much criticized “infomercials,” commercials dressed up as investment-advice shows. Last fall, with flashier new sets and a bigger news staff, FNN also ventured into prime-time with a slate of original lifestyle programs geared for its upscale viewers.
With the new changes, FNN’s ratings increased and the network’s national advertisers tripled. Unlike most cable networks that program for wider audiences, FNN knows who its upscale viewers are and focuses in on them--a demographic luxury it affords by charging higher advertising rates than most of its cable competitors.
On weekend afternoons FNN switches to sports news, interviews and scores. FNN also broadcasts its financial news to a radio network of 100 stations and offers a service that plugs its stock quotes and business news directly into personal computers.
The new changes and other ventures at FNN didn’t come cheap--a reported price tag of $115 million. If FNN is sold to a major domestic or international media company, as expected, the network will probably grow even larger. In the meantime, with its advertising and subscriber base secure, FNN is sitting tight and waiting to see where its future lies.
CNBC: Competing With a Broad Mix of Programming
If somebody one day writes a book about the Consumer News and Business Channel, it might be called “The Mar keting of a Cable Network.”
Backed by the power, resources and reputation of NBC, the No. 1 TV network, CNBC premiered with a promotional bang in 13 million households on April 17, 1989. During an industry-wide channel crunch that kept other aspiring cable networks waiting in the wings, the upstart CNBC--with a huge bankroll reported at $65 million--hoped to win viewers with shiny sets and graphics, seasoned hosts such as Dick Cavett and an eclectic mix of consumer and business reporting.
But after the launch, the Wall Street Journal described CNBC as an “odd mix of serious financial news with softer, consumer-oriented features” and noted that initial reviews from media critics and cable operators were mostly negative. One critic called it “the ‘Entertainment Tonight’ of financial news.”
“The industry told us after we were on the air for a relatively short period that they wanted us to be a bit harder during the day,” CNBC president Al Barber said. “They expected us to be substitutional for FNN.”
Today with 16.7 million subscribers, CNBC has refined its two-prong approach to consumer and business programming. In a sense, the days have become harder and the nights softer.
During business hours, CNBC now mirrors FNN in most respects. With its own ticker racing across the screen, the channel covers breaking financial and market news, with commentary and analysis from experts.
In the evening, CNBC becomes a grab bag of consumer information and talk shows.
The cable channel’s sometimes awkward combination of hard-boiled financial news, over-easy consumer reporting and prime-time entertainment continues to draw industry charges that CNBC does not know who its audience is. Critics maintain that FNN adequately serves the financial community, and CNN and the Big Three networks already provide sound consumer reporting.
But Barber simply pointed to CNBC’s competitive ratings with FNN and its growing subscriber base. He also laid out plans for CNBC’s future:
A nationwide hunt is now being held for a radio talk-show host to become in February the cornerstone of a nighttime, weekend talk block of live, call-in programming.
An afternoon talk show with a panel of business leaders is in early development. And in the next few months, Barber expects to cut deals with hotels and cruise ships to pipe CNBC to an international market.