Fox News Raced to 80M Subs

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Fox News Channel passed the 80 million-subscriber mark last week, reaching that benchmark more quickly than any other basic-cable network.

In its early days, Fox News battled MSNBC — which also debuted in 1996 — for the second-place spot in the all-news war. But over the last two years, that struggle has become a race for No. 1 between Cable News Network and Fox News.

And Fox's entry has been winning that battle, beating CNN in ratings in May for the fifth consecutive month.

Fox News now counts 80.1 million subscribers, according to June Nielsen Media Research universe estimates. It's picked up 13.4 million subscribers in the last year alone.

CNN's 86.4 million subscribers make it the mostly widely distributed news network, while MSNBC has 76.2 million subscribers.

Nielsen figures supplied by Discovery Communications Inc. indicate that 24 networks are at or above the 80 million subscriber mark. Fox News and Comedy Central both crossed that threshold in the last month.

BACKED BY $10 FEES

It took Fox News five-and-one-half years to break 80 million subscribers. The History Channel, which broke the 80 million mark in March — seven years and three months after its debut — is the closest competitor.

Fox News offered cash-for-carriage fees of $10 per subscriber when it debuted, which was an unprecedented move at the time.

Network executives acknowledged that launch-support fees played a key role in the network's fast growth. But they also said much of the growth came after the network — driven by shows such as the top-rated The O'Reilly Factor
— became popular, and subscribers demanded the channel.

"In all cases with the MSOs, they significantly increased and expedited their distribution commitments," said Fox News vice president of affiliate sales and marketing John Malkin.

The channel's biggest distribution hole remains on Cablevision System Corp.'s Bronx and Brooklyn, N.Y., systems, Malkin said.

"It's a capacity issue, and our friends at Cablevision are working to try and remedy that situation," he added.

While Fox News has consistently beaten CNN in the ratings, it still trails the network in terms of ad revenue and license-fee revenue.

"We'll eventually pass them in sales," said Fox News executive vice president Jack Abernathy, adding that there's "always a lag" between when a network becomes the leader in ratings and when it hits No. 1 in ad revenue.

MSOs should also expect Fox News to raise its license fee when its initial carriage deals come up for renewal in 2006.

"We expect to be a top-10 network in 2006," said Malkin. "At that point, we expect to be compensated for being a top-10 network."

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