Fox Business Launch Signals Re-Shaping of Business Journalism Landscape
Important Details: In launching this week, Fox Business Network (FBN) will set off small near-term marketplace jolts, but its advent – combined with parent News Corp.’s acquisition of Dow Jones – promises to be part of the re-shaping of business journalism for the multi-media, multi-channel age.
The launch will reach about a third of the number of homes reached by TV business leader CNBC, which is available in more than 90 million U.S. homes. Using cable and satellite, it takes time to gain access to new customers; FBN may not equal CNBC’s potential reach for three to four years.
But that reach number obscures the niche that TV business news holds. In August, CNBC’s average audience numbered only 87,000 people, aged 25-54, according to Nielsen. With the days of day-trading over, CNBC has been a station for those in the business who need to know what’s going on. While small, it’s been a great ad niche, selling readers who average $2.7 million net worth (according to CNBC) to advertisers.
Looking at those numbers, News Corp. thinks it sees a big opportunity, a chance to become the Main Street of Money for Americans – and then those around the world it can reach through the company’s multi-continent satellite operations and cable relationships.
FBN is headed by CEO Roger Ailes, a founder of CNBC, who built the Fox News Channel into a ratings leader. “We think economic news is probably broader than what CNBC has been presenting….I will call a lot of audibles at the line once the play starts….I’ll change many things the first year, I’m sure.”
Implications: With News Corp.’s closing of its Dow Jones acquisition just a month away, Outsell believes the FBN story should be seen as part of a much larger landscape. It’s not just a TV story, or one apart a highly lucrative niche.The business of business and finance news and information is being reordered. Rupert Murdoch’s purchase of the Wall Street Journal has sent shockwaves through the sector. As he muses about taking WSJ.com free (away from the medium’s most successful paid news model), the New York Times has moved to end its own pay services, in part making all its own business content free, and The Financial Times has recently loosened the strictures on its paid model, allowing visitors to better sample its wares. Also in recent months, we’ve seen Reuters plan to merge with Thomson, Conde Nast launch a new business magazine (Portfolio), and Business Week announce a major redesign.
Outsell expects the change to only increase and push to more ownership change. All players recognize that a better-capitalized and energized Dow Jones spells trouble in retaining their own business readers – and lucrative business advertising. We expect to see formerly separate brands (magazines, search aggregators like Yahoo Finance, MSN Money, etc.), and newer entrants such as Morningstar and Seeking Alphas (an intriguing stock picker aggregator) come together in unexpected ways. The business news space will demand more scale and that means alliance, acquisition, and roll-up.
As those combinations are evaluated, they’ll be looked at within a new multimedia landscape. In 2007, news video has come to many of the business sites. It will increase markedly in 2008. The time when brands meant distinct media type — print (WSJ), cable TV (CNBC), web (Marketwatch, Google Finance), and magazine (Fortune) – is passing. The future belongs to multimedia brands delivered through multiple channels (web, TV, print), and the FBN launch, timed a month before the News Corp. Dow Jones takeover, is the best evidence of that phenomenon.