Just as many of its prospective viewers seek to diversify their portfolios, Rupert Murdoch’s News Corp. wants to expand the audience for financial-news watchers when it launches its long-anticipated Fox Business Channel in the fourth quarter.
How the new network — currently set to launch with 30 million pay television subscribers able to watch, through agreements with such distributors as Comcast, Time Warner Cable, DirecTV and Charter Communications — is going to do that remained unclear last week.
After two years of buildup, News finally made it official last Thursday: It will take on a category-leading cable network for the second time, with its business channel challenging CNBC in the way Fox News Channel took on CNN 10 years ago.
Fox Business will try to lure CEOs, CFOs, CTOs and CMOs away from CNBC. Focusing on that C-suite of viewers has enabled CNBC to ring up some $500 million in annual license fees and advertising revenues.
The new service will be developed and overseen by Roger Ailes, chairman and CEO, Fox News and chairman, Fox Television Stations. He knows the turf: He served as president of CNBC and MSNBC predecessor America’s Talking before joining News Corp. in February 1996 and launching Fox News Channel in Oct. 7 of that year.
But neither Ailes or Fox News senior vice president and managing editor of business news Neil Cavuto, who will oversee content and business coverage at the new service, would discuss specifics about programming to be launched or the channel’s strategies for different parts of the day. Their silence extended to whether Cavuto’s five Fox News Channel business shows — including Bulls & Bears and Your World With Neil Cavuto, the five highest-rated in cable (see chart) — would repeat on the new service.
Cavuto, who worked for eight years at CNBC, said: “We’re going to be entertaining, informative, youthful. We’re going to appeal to groups beyond old white guys with money.”
Riffing on that remark, Ailes said: “I have no problem with old white guys with money, being one of them. Having said that, it would be good to broaden the audience.”
One hint of what viewers can expect came from News chairman Rupert Murdoch. Speaking at the BusinessWeek Media Summit in New York last Thursday, Murdoch said it would be “more business-friendly than CNBC.” He added that the Fox channel’s rival tends to be “negative” toward business and to jump on scandals more than is warranted.
Friday morning, Ailes supported those philosophies. “We’re not getting up in the morning predisposed to be negative. Business is good for America; the capitalist system is good and we like that,” he said.
As for whether it will be less likely to “leap into scandals’’ than CNBC, Ailes notes that “we’ll cover them as we always have. We’re not going to assume guilt.”
The network, centered at News Corp.’s headquarters in Manhattan, is expected to launch in major markets around the country, including this nation’s financial capital, New York.
In making the announcement, Murdoch said, “We have long considered the business-television market to be underserved. I look forward to introducing new competition and a new voice to the business-news arena.”
News watcher Andrew Tyndall, who monitors TV-news viewing through the Tyndall Report, is not sure one is really needed.
“This is not an underserved market,” he said. “CNNfn didn’t make it. Bloomberg [Television], a very well-established name in the financial field, hasn’t really succeeded.” CNNfn shut down on Dec. 15, 2004, with distribution to 30 million homes. Bloomberg currently counts some 43 million subscribers.
The emergence of a Fox rival did not faze NBC Universal’s CNBC. Its vice president of media relations, Kevin Goldman, said: “Bring it on. We certainly welcome the competition, if it ever shows up.”
Although still down from the halcyon days before the Internet bubble burst in 2001, when it averaged 330,000 viewers and topped the $500 million mark in advertising sales the following year, CNBC has climbed back under Mark Hoffman, who returned to the network as president in 2005.
Last year, total-day viewership was up 22% to 169,000, while primetime watching grew by a third to 171,000 on average. Among the news-targeted demo of adults 25 to 54, CNBC improved 62% to 63,000 of those watchers in its 5 a.m. to 7 p.m. “business day” period.
“We’re in the best position we’ve ever been in and we’re only getting stronger,” Goldman continued. “We just wrapped up our best financial year ever and our measured audience is surging.”
CNBC has been preparing for the arrival of Fox Business Channel over the past 18 months, revamping its “look and feel,” Tyndall said.
“It has become less stuffy, has a more chatty style, jazzier graphics, younger people on [signature show] Squawk Box,” he said. “FNC is not going to be able to ambush CNBC, like FNC ambushed CNN.”
After launching under Ailes in October 2006, Fox News Channel surpassed CNN in primetime and total day ratings in January 2002. Last month, it marked five years atop those measures.
The timing for Fox News has been good: It’s been able to ink a series of renewals as its 10-year carriage contracts have begun to roll off. Thus far, Fox News has reached accords with Cablevision Systems, the National Cable Television Cooperative, DirecTV and Time Warner. Executives familiar with the pacts indicate that with escalating annual figures, the monthly license fee for those deals averages around 75 cents.
By contrast, Fox Business Channel license fees are believed to fall between 10 and 15 cents per subscriber per month.
Ailes anticipates the business service will start up with somewhere between 32 million and 33 million households able to watch. He was hopeful the Fox Business Channel roster, which already lists Time Warner Cable and Comcast in the area, would include Cablevision, the New York market’s dominant carrier.
“[News Corp. chief operating officer] Peter Chernin and I had good conversations with [Cablevision CEO] Jimmy Dolan when we signed Fox News. We hope to reach an agreement with Cablevision for Fox Business Channel,” he said.
Longer-term, Ailes envisions Fox Business’s subscriber base being almost twice that size.
“The network needs to be fully distributed. For a business channel, we don’t think you necessarily need 80 million. We think that’s 50 million to 60 million homes in the right markets.”
Ailes said staffing up would be a top priority in the months ahead. “We’re looking at a few hundred people in terms of production and talent,” he said, noting that he’d received a “flood of resumes” from CNBC employees. “We’re considering building a separate entrance to the building for them.”
Currently on board: Fox News executive vice president Kevin Magee who will have daily oversight of the service; and director of business news Alexis Glick, who will also have an on-air presence.
Asked about profitability, Ailes said the timeline for Fox News to break even was five years. For Fox Business Channel, he said that operating level would come within three to four years. “It took five years for Fox News to pass CNN; it wasn’t an overnight success,” he said. “We’re thinking we’ll have to pass through the wilderness here, too.”