NEW YORK (AdAge.com) -- "I worry about CNN more than I do about CNN.com."
Many news junkies already feel the same way, but when the person expressing concern about the state of the 24-hour TV news network is Time Warner CEO Richard Parsons, the guy who ultimately runs both properties, it's pretty telling.
Mr. Parsons, who was discussing the company's entire portfolio at a London media conference last week, was positive on the subject of AOL ("we have it in a nice track") and slightly less effusive about Time Inc. ("they are going to be around for a long time, but they're not going to grow like they have in the past") but bordering on pessimistic about the state of his cable-news operation.
For good reason: CNN's ratings have been on a steady decline since 2003, when it regularly got 689,000 households to tune in each day, to a low of 383,000 last year, according to Nielsen Media Research. For the first six months of this year, it's up to 431,000. Fox News, its younger, more conservative competitor, routinely trounces it in the ratings, often garnering twice the household ratings and recently besting CNN in prime time for key coverage of the presidential debates.
Sit-forward viewers
Traffic continues to climb over at CNN.com, however, with unique users up nearly 25% to 26 million in April compared with the same period last year. That, coupled with the 90 million worldwide subscribers to CNN Mobile, suggests that CNN's breaking-news model fits in better online among sit-forward viewers than it does in the sit-back environment of America's living rooms.
"We're all pretty convinced that news doesn't break on TV anymore," said Eric Bader, senior VP-managing director of digital connections at MediaVest. "Almost everybody across pretty much every economic and age demographic learns of breaking news online, increasingly on mobile." He points to coverage of Sept. 11 as most representative of the shift. "People didn't have to channel surf to get to that urgent information, especially if you lived outside of New York."
TV news, of course, has always had a harder time attracting an audience than entertainment programming. CNN ranks third among Time Warner's cable properties in its reach to key demos, behind TNT and TBS, which regularly reel in 3 million to 4 million viewers in prime time. CNN occasionally gets about half that for special-event coverage.
Competing with O'Reilly
Fox News built its audience by realizing it didn't need to rely solely on news, larding its shows with plenty of opinion and hiring hosts unshy about expressing their views, making for a more entertaining experience. In the new news landscape, an influential blogger's opinion can carry as much weight as a New York Times editorial, and Fox News has become adept at adopting a strong point of view, much like talk radio has done for years. That's led viewers to treat the cable channel more like radio, a companion throughout the day. CNN, with its roots firmly entrenched in a more traditional approach to journalism, built its reputation on its ability to deliver breaking news 24 hours a day and essentially trained its audience to tune in for headlines. The web has taken away that core mission, and CNN has since struggled to find a new approach that doesn't feel like just the liberal version of Fox News.
"You're right, Fox has higher ratings than CNN U.S., but ... CNN U.S. has more individuals watching, every quarter, every year," said Jim Walton, president of CNN Worldwide. "We don't have as high ratings because the CNN viewer doesn't spend as much time watching."
Brad Adgate, senior VP-director of research at Horizon Media, said CNN's ratings decline is "not entirely due to Fox News, just the ubiquity of news to consumers now on a variety of different platforms."
And where the viewers go, so do the ad dollars. Since 2003, CNN's cable revenue has dropped 11%, from $424.2 million to $378.5 million in 2006, while digital revenue has nearly doubled, from $34.8 million to $71.4 million, according to TNS Media Intelligence.
Mr. Walton wants to make sure that if the audience is tuning out on cable, it's tuning in to CNN somewhere else. "What we want to do is be able to serve our news anywhere in the world at any time on any platform," he said.
