Assessing Fox Business Network, Two Years Later

In Depth

by Steve Krakauer | 9:06 am, October 19th, 2009

» 12 comments

Guests: One interesting wrinkle we’ve found while researching this story was several people describing ways the big guy (CNBC) seemed to bristle, and in some cases do much more than that, at the thought of a guest appearing on the little guy.

It happened to Weisberg. “They were upset at me because I was doing the early morning Bloomberg show,” he said of CNBC. “They said I have to choose between Bloomberg and CNBC.” While he regularly appears on FBN and sometimes on Bloomberg, now CNBC doesn’t “even talk to me,” says Weisberg.

A former FBN employee relayed a similar story. “Some networks would say if you go on our show we’re never having you back,” said the former employee we spoke to. “The really important guests were not going to be bullied by another network. I think sometimes people were looking for an alternative. Maybe they didn’t have a great experience somewhere else.”

This practice has been written about before. And it seems in the business news world, even more so than at general cable news outlets and in network news, the need for “exclusives” and “firsts” is that much more intense. It leads to CNBC, the clear #1 in business news, to tout exclusives that clearly stretch the definition of the word beyond recognition.

The guest ultimatums and exclusive pushes is a tacit recognition by CNBC that FBN, at the very least, is a competitor. To demand guests, who often are unpaid workers in the financial sector, stick with CNBC over another network is a boost to the idea Fox Business Network is growing. “I think it’s unbelievably unwise to tell somebody who is a CEO of a Fortune 500 company, for some booker in New Jersey to tell them what they should be doing,” said Magee.

And the fact is – do they even really need to do it? Said a former FBN employee we spoke to, “It obviously was harder to book guests there because our audience isn’t huge. So either way people would rather go somewhere more people would see them…the hardest part was getting them to come on the first time, because I think some people equate it with Fox and think it’s going to really conservative. But a lot of times, they come on once and they want to come back.”

The Future: When we recently talked to Bloomberg TV head David Rhodes recently about the changes at his network, we asked about FBN, the sister network of his former home (Fox News). “I think you’d have to talk with Fox about what their strategy is for that channel, and for their broader business,” he told Mediaite. “That’s really their thing. From our perspective, we have a strategy of our own and we’re working on executing on that.”

Well one strategy that has worked is the online one. Foxbusiness.com gets solid traffic, helped by Foxnews.com’s business section directing all readers to the sister site. But also, FBN has several web only shows that have succeeded in connecting viewers to the channel that may not be able to get the network at home (it’s still in only 50 million households). These viewers can’t be measured, but the connection is an important one. “What’s great about the web is it is a more intimate relationship,” anchor Jenna Lee told Mediaite when we talked about the Imus launch earlier this month. “I know what they think about the story, or if they even care about it. In a lot of ways the relationship is more equal.”

And her co-host on the web show in the morning, McShane, said in an interview earlier this month the reach will only grow “now that the technology is catching up.” Besides the technology (watching the show on laptops, iPhones and more), the FBN web only product is produced to look like it would on TV. Despite web shows from Fox News, CNN, ABC and CBS growing in production value, the FBN shows look the best.

Examining the cable news landscape as a whole, FBN host Bolling, a former CNBCer, said: “The hardcore business viewers are people tuned into Bloomberg, the really professional trading types watch CNBC and the rest of America, who are interested in the economy, have FBN. I’m not sure the CNBC model is going to survive.”

That may be extreme – CNBC isn’t going anywhere, and despite some ratings drops year-to-year, it is still bringing in big numbers compared to the business news competition. But the point about audience is important. From the very beginning, FBN has touted it’s appeal as ‘main street over Wall Street.’ There has been a conscious focus to present business news in a way the average viewer can understand it. While the ratings may not reflect this as a winning strategy yet, FBN has stuck to the plan. While business news continues to become simply ‘news’ the accessibility could be a positive attribute.

Two years is not a long time in the cable news world, even though it may feel like it at times. (Point of reference – two years ago today MSNBC’s Countdown debuted its current graphics/intro look.) With Imus’ hiring, the network has shown it is willing to take short term criticism for a step backward in business news coverage while taking a step forward to boost ratings. A lot will depend on how the other new hires (and potential hires) fit in with the business world FBN is supposed to be covering. Can they find their Glenn Beck – a dynamic, hugely popular, personality that also fits perfectly with the overall theme of the network?

For a company that prides itself on being #1, they’ve got a long way to go. But if the path of Fox News has been any indication, expect it to be a fight.

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Bloomberg, CNBC, Don Imus, Don Imus Debuts, FBN, FBN Two Years, Fox Business Network, Fox Business Two Year Anniversary, Kevin Magee, Neil Cavuto

rmbltmbl

Jenna Lee makes me smile.
http://www.facebook.com/people/Vik-Sidhu/122608564 Vik Sidhu

Fantastic piece, Steve!

Just a few random comments I wanted to point out:

1) Your discussion regarding the demo is spot on. It’s true that “older” people likely have more wealth and some people try to discount the demo for business networks. However, you gotta look at the ads that are aired on FBN/CNBC – they’re for things like automobiles, financial/investment services, sometimes high-end clothing and so forth. People who are in their late 50s/early 60s are NOT looking to purchase most of these things. So targeting a younger audience IS in the network’s best interest, and it’s good to see Magee on the record talking about the demo importance.

2) Talent infighting – I wish you dished out more details on that ;)
I was hoping you would have asked FBN employees what THEY thought of Imus’ hiring, and whether it was at all “diluting” the brand
When Ted Weisberg said that Imus reduces business news to the “lowest common denominator”, I think that quote is going to make FBNers squirm….because it’s true.

3) I believe Nielsen’s criteria for making ratings public is that a network achieve a 0.1 rating during the day (I THINK).
If that’s true, with Imus, Fox Business IS in fact hitting a 0.1 (at least they did on the first day). Any indication when they’ll be releasing their ratings? I mean really, how much longer are they going to hide behind Nielsen and hide their numbers….

4) I know you won’t/can’t say, but I’m relatively sure the “Business Insider” you spoke to was someone from CNBC (giveaway: pg 4 “It’s just not actionable information.” – from their tagline “We are fast, accurate, actionable and unbiased). If that’s the case, I’m not sure that’s the BEST person to be getting “unbiased” insider info from….
m

Great article!
http://mediaite.com Steve Krakauer

Hey Vik-

Appreciate it. As for #2, that’s what I’ve got so far, but I’ll be keeping an eye on it. For #3, it doesn’t look like there’s any plan to start releasing ratings any time soon, for a few reasons. With Bloomberg still not publicly rated, I think there’s less of a rush as well.

-Steve
CaptainAmerica

This article could have been much better. Where is any talk about how big a feat it is to be in 50 million homes at the 2 year mark and all the revenue those homes bring in to the channel?

Where’s all the mention about how Imus and other planned additions could add tremendously to those distribution and revenue plans?

When comparing demos, did you say how much Imus’ competition does in the 35-64? CNBC’s numbers aren’t that much greater. What’s a usual SB show? How many times has SB scratched in the key demo in the past year? What’s the median age of a Corvette owner or some of these other automobiles and other high priced goods that these shows cater to?

But at least McGee is on record saying that the 25-54 isn’t that important at this stage:
But FBN Executive Vice President Kevin Magee told Mediaite, “I’m not terribly worried about that. The fact of the matter is they are improving, they may not be as quickly as you may think, but we’re doing fine.”

McGee knows where the revenue streams are and at this point it isn’t ad revenue. Be nice if you addressed those issues because alot of your readers probably think FBN is dependent upon ad revenue to make it. Also be nice if you had mentioned what their forecasts were for channel distribution within the next 2-3 years. How many homes do they plan on being in by then? What is their marketing strategy going to be with Imus, Stossell on board. Are they going to do more than run promos on FNC?
Sunnyr

Roger Ailes is a genius. He is hiring some excellent, but controversial, people from other networks and will have FBN up as the Number One Business Network in short time. WTG, Fox!
CaptainAmerica

Also its not touted really till the 4th page that FBN is for MAIN STREET investors not Wall Street ones.

You make this point on page 3:

While Imus isn’t providing the necessary tools for someone in the financial world to start their workday, they can certainly get their information in other places (like the web).

and its nice that you acknowledge that FBN shows on the web look like TV shows.

The point you didn’t really hit on in the article is that Imus doesn’t dilute FBN’s brand. They are for main street investors. To those people they aren’t trading stocks every hour. It doesn’t matter so much what the LIBOR is overnight….or what the Bundesbank (or ECB) has done recently. Those overnight things don’t matter that much.

But FBN does provide business updates during Imus show to catch up the main street investors on what they might need to know and if they want more then they can watch FBN’s show with Jenna Lee online during those hours.

So never was it really pointed out in the article how for most of the people FBN is targeting for viewers, there business day really doesn’t start until 9:00 am ET.
http://www.facebook.com/people/Vik-Sidhu/122608564 Vik Sidhu

CA, I don’t really understand your obsession over increasing carriage, collecting fees and the whole spiel you repeat constantly.

Yes, Fox Business is focussed on increasing their household figures. However, that can carry a network only so far. At the end of the day, RATINGS are the bread and butter of any TV network – and that includes attracting the appropriate demographics. A network can’t sell ads if no one is watching them. So what if 100 million people have access to Fox Business? GROWTH needs to come from somewhere – you can’t rely on your carriage fees forever.

Just to further disprove your point – Fox is shutting down their “Fox Reality Network” (which is carried in 50 million homes).
{http://www.medialifemagazine.com/artman2/publish/Hereandthere/Fox_Reality_becoming_Nat_Geo_Wild.asp}
That network relied pretty much exclusively ON carriage fees – since they had very little original content, and just played endless repeats of Fox reality programming (aka LOW costs). Why couldn’t they survive? Because they had NO RATINGS. Sooner or later, you need to generate some money with ad sales – and you can’t sell ads without ratings.

You’re really the only person harping on and on about how important their household coverage is. Knowing Fox, they’ll get FBN up to 70, 80, 90 million homes in a relatively short period of time. It’s practically a given – this isn’t a point that needs to be debated. But after that – they HAVE to increase their ratings somehow.
That’s why *ANY* network ultimately wants to increase their carriage….higher carriage = more viewers = *more ad dollars*. For some reason, you discount this equation.

FBN better have one HECK of a sales team who can sell ads based on a 55+ crowd, whether these older folks are wealthy or not. Unless you think Fox can make money selling “Life Alert” ads all day, you’re going to have to reassess your stance on the demo. If you like it or not, CNBC offers more attractive demographics across the board – more youthful viewers, more affluent viewers, more educated viewers (remember – Fox Biz is “main street”) – that’s why CNBC can actually make money despite their low measured ratings. A 55 year old “main street-er” watching at home just will NOT command the same ad premiums as an average CNBC viewer.

P.S. As a point of reference for you:

Friday’s Squawk Box (Oct 16th):

Total Viewers: 179,000 “professional trading types” (as Eric Bolling classified himself)
25-54: 50,000 viewers
35-64: 95,000 viewers
55-64: 45,000 viewers

Imus’ first day:

Total Viewers: 177,000 “main street-ers”
25-54: 9,000 viewers
35-64: 73,000 viewers
55-64: 64,000 viewers

So you tell me – if a financial company, high-end merchandiser, or auto maker was presented these viewer profiles, which one of them would command a premium? And which would be tossed in the shredder?
CaptainAmerica

I’m well aware that Fox Reality is giving way to the National Graphic channel. But of course FRC (which had been around how long now) was only getting .9 a household instead of .15 like FBN. Huge difference right there.

Now at least you admit FBN will be up to 70, 80 even 90 million soon. So you are admitting that FBN will be not only in the black soon but profitable as well just off carriage fees alone.

Odd how you don’t say much about CNNFN not getting past 30 million homes in its 9 years in existence. They did have to throw in the towel.

FBN is only 2 years old and you compare that to Fox Reality? Fox Reality is 4 1/2 years old and its not past 50 million homes. So you’ve already admitted that FBN will be far past that and of course profitable by then from fees alone.

You can obsess all you want about demographics and other things. As they increase their distribution the viewers will come. So will the advertising. Fox every 10 million homes they pick up thats an increase of $18 million a year to the FBN coffers. If they go up to 90 million homes, that’s another $72 million a year in fees they will be getting.

The viewers will come as the distribution increases and as they start marketing the channel beyond FNC promos. They won’t even begin to integrate and change the name of the network until 2012.

Magee understands it. You don’t
Still, Magee says the network does sell against the rating category. “We do any number of ways, and one of them is the demo, but smarter ad buyers understand that 25-year-olds are great for buying car stereos, but don’t invest a lot,” he said.

But I’ll let you get back to your FBN/FNC hating.
http://www.facebook.com/people/Pete-Atikins/1162762506 Pete Atikins

yeah I’ll have to agree with Vik here

There really shouldn’t even BE a discussion about household coverage around here. The U-L-T-I-M-A-T-E goal of a cable network is to generate ratings; getting more households is merely a stepping stone to reaching that goal. When was the last time anyone ever saw a press release touting a network reaching “X million households”? Hardly ever. RATINGS are what generates a network’s true worth, and ultimately determines its success – not the # of households.

Working in the marketing arena myself (and dabbling in local/semi-national ad sales), I can also affirm that presenting an attractive demographic slate (whether it be age/income/education/geography) is what determines ad rates; never the “household reach”. Just because a network gets more households doesn’t mean they’ll get more viewers; heck, CNN is carried in 99 million households and they can barely attract 1 million viewers a night. So a tiny niche network like Fox Biz REEEEEEALLLYY has their work cut out for them, especially with 2 formidable competitors with CNBC & Bloomberg. I’ve never, EVER, EVER had anyone ever ask me “how many households is this network carried in”.

All these paragraphs devoted to households and all that from the above commentator is nothing more than fluff. Networks live and die by the ratings. And at this point, Fox Business has none to speak of. Stripping out Imus, the network can’t even get a 0.1 during the day (something like 36,000 viewers from another blog I read); and that’s WITH the huge promotional heft of News Corp/Fox News. Imus is helping, to an extent —– but as Vik pointed out, the demographics at this point are far from enticing (except maybe to “Head On” LOL). Even if this channel reaches every household in America, it has a LOOOOOT of work to do before they can get anything attractive to grab ad $$.
CaptainAmerica

There really shouldn’t even BE a discussion about household coverage around here.>>

Yeah, why worry about that! LOL Stick with selling local media! Don’t get in with the big boys!
CaptainAmerica

Whine whine whine whine whine from the Fox haters. Love those liberals! ;)

Imus has been on the air how long and that’s the first thing FBN has done to address their ratings and they are crying about them now. Imus is already not far from CNBC’s 35-64 demo. Right in the same ballpark, but oh no, that’s not good enuf.

For someone to claim a networks reach doesn’t matter or the money they make is laughable. Also for them to claim they don’t see press releases of those networks touting new milestones shows they just aren’t in the business at all. That’s a huge bragging point for networks when they pick up more distribution. How many times have we even seen the releases when a cable network is picked up by a new cable system and it only adds 1 M new homes or so. They do it all the time.

Some of these people probably freak out that (even before Hannah Montana) Disney channel didn’t take ads and yet look at the huge fee they got. GASP. How could that network make it without ad revenue. Shocking!

FBN only 2 years old and already in 50 million homes and Fox finally starts making moves to increase ratings (as well as distribution) and the network has already beaten a network that has 18 years ahead of them and yet they whine.