CNNfn Cashes In Chips10/31/2004 7:00 PM Eastern
With the financial-news genre tanking even for dominant CNBC, Cable News Network is shelving its long-lagging spinoff service CNNfn, effective mid-December, officials said last week.
CNNfn's current carriage base of 30 million subscribers will essentially be up for grabs, although parent Turner Broadcasting System Inc. is now in the process of talking to distributors about using that real estate for some of the programmer's other services, such as CNN International, TNT HD and Boomerang.
“We're in discussions with the operators for that channel space,” Jim Walton, president of the CNN News Group, said during a conference call with the press last week.
CNNfn's major affiliates include its Time Warner Inc. corporate cousin, Time Warner Cable, as well as DirecTV Inc. and EchoStar Communications Corp.'s Dish Network.
But Turner might not have much luck getting DirecTV to slot in another of its networks, as the direct-broadcast satellite provider is controlled by News Corp., parent of CNN archrival Fox News Channel.
News Corp. chief Rupert Murdoch himself has called launching a financial-news channel a “no brainer” for his company, a move that might be hastened by CNNfn's demise. News Corp. officials couldn't be reached for comment.
At least one cable-network official questioned how much luck Turner will have in holding onto CNNfn's bandwidth. “Operators are just going to recapture the space,” the executive said.
Walton announced the plan to shutter 9-year-old CNNfn in an e-mail message to CNN employees. “In the digital distribution of linear networks, the growth has not come at the rate many of us had anticipated,” he later told reporters.
CNN hasn't been afraid to shut down its own spinoff channels. In May 2002 it shuttered CNN/Sports Illustrated, which had debuted in 1996 and had 20 million subscribers.
Rather than maintain CNNfn as a linear TV network, the CNN News Group will migrate its business-news programming to its fully distributed services, CNN and CNN Headline News, and offer it on such new platforms as video on demand, subscription VOD and broadband, Walton said.
“You'll be seeing some product evolve over us in the next three to eight months,” he said.
CNNfn — with too little distribution to get audience ratings — never got much traction against the 24-hour business-news leader, CNBC.
That might not have mattered, because ever since the stock-trading craze of the dot-com era, viewer interest in business news has waned. CNBC has been adding more entertainment-type programming to its primetime lineup to try and boost its sagging ratings.
Privately, CNN officials pointed to CNBC's dismal ratings. In the third quarter, CNBC only posted a 0.1 rating for both total day and primetime, down 50% from a year ago in both instances, according to Nielsen Media Research data supplied by the Disney ABC Cable Networks Group.
Of the 110 full-time staffers at CNNfn, many will be able to just stay on to work on shows like Open House and Dolans Unscripted when they migrate to CNN or Headline News. But 60 workers will be affected, according to Walton.
CNN has just posted 100 new job openings, and Walton expects many of the 60 to be able to take some of those slots rather than be laid off. Those who do leave will given a severance package of “two weeks plus two weeks pay for every year they worked,” according to Walton.
Ken Jautz, executive vice president and general manager of CNNfn, will stay on to oversee CNN's business-news programming. Under Jautz, CNNfn actually turned a profit in 2003, Walton said.
As for CNNfn's 30 million homes, Walton pointed out CNN International's feed is now carried on CNNfn on weekends and at night. Distributors could opt to carry that around-the-clock international network on CNNfn's channel slot.
“We feel that many of the operators might like to have more international programming going forward,” Walton said.
WAIT AND SEE
CNNfn's current affiliates, including Time Warner Cable, said it's too early to say what they will with the network's channel slot.
“We are evaluating the situation,” EchoStar spokesman Steve Caulk said.
Uncertainty over a DirecTV renewal was said to be a consideration in pulling the plug on CNNfn. Regarding what DirecTV will do with CNNfn's channel slot, DirecTV spokesman Robert Mercer said, “No decisions have been made yet.”
On Fox News Channel, Neil Cavuto's financial-news shows have performed well in the ratings, and could provide a base for a 24-hour network.
CNN's plans also call for adding longform programming to Headline News's primetime lineup next year, Walton said.
“We're going to try to create some programs that are going to generate viewer interest and appointment viewing,” he said.