Planet CNN | INA Global

Planet CNN

Article  by  Cyril BLET  •  Published 27.09.2010  •  Updated 24.01.2012
CNN finds itself in an unprecedented position. Its flagship programs are losing favour in America, whilst many networks are now squaring up to it at international level. However, the American network continues to provide most of CNN’s revenues, even if its global version attracts the largest audience.

Summary

Thirty years after it was first launched, CNN finds itself in an unprecedented position. Its flagship programs are losing favour with American audiences, whilst ten or so rival networks are now squaring up to it at international level. A pioneer of continuous televised news, CNN made its reputation by interrupting its flow of programs to present breaking news. As a result, its reports, stamped with their red logo, regularly travelled round the world, giving the network global recognition.

An integral part of the Turner Broadcasting System Group, itself a subsidiary of the Time Warner conglomerate since 1996, CNN Worldwide embodies a good many of the changes that have occurred in the audiovisual news media market. From Atlanta, Jim Walton supervises the activities of a portfolio that includes more than twenty information platforms. The CNN US networks for the United States, and CNN International (CNNI) for world broadcasting, respectively managed by Ken Jautz and Tony Maddox, represent the greater part of its turnover. In 2009, CNN’s combined activities generated revenue of around 1.6 billion for an adjusted operational result of 500 million dollars, or one eleventh of the same financial result for Time Warner overall.

Whilst CNN Worldwide is known for its global development, this article shows that only one fifth of its turnover comes from its international activities, with the rest generated in the United States. This imbalance is understandable if we analyse CNN’s global positioning, its audience and the structure of the international news market. It also allows us to imagine the consequences of this for the Group’s editorial priorities[+] NoteThis article is based on interviews with ten CNN managers and journalists, as well as media professionals. Certain journalists wished to remain anonymous.X .
 NoteCet article est fondé sur des entretiens avec une dizaine de cadres et journalistes de CNN, ainsi que de professionnels du secteur des médias. Certains journalistes se sont exprimés sous condition d’anonymat.X [1]

World news production

From the very beginning, the Atlanta channel focused resolutely on covering international news stories. Persuaded of CCN’s intrinsically global character, its founder Edward Turner banished the word « foreign » from the network, preferring the use of the world « international » to describe news from outside the United States. He had even attributed the ambition of contributing to a « better understanding of life and work amongst peoples » and of participating in nothing less than the establishment of « peace and fraternity »[+] Note“Cable network begins Continuous News Programs”, New York Times, 2nd June 1980, p.B8.X [2]to the launch of CNN in June 1980.

Thirty years later, CNN has four thousand employees and correspondents working from 47 different offices around the world. Unlike many organs of the press obliged in recent years to reduce their network of journalists abroad, CNN is adding to theirs, firming up its presence in Afghanistan, China and the United Arab Emirates.

The 3.5 million dollars saved annually by stopping its subscription to the press agency, Reuters, in addition to resources from its separation with Associated Press, have contributed to the financing of this initiative. By stopping its subscription to the enormous image banks of these two transnational news agencies, CNN has chosen to produce more of its own content. It then sells this on to more than 800 local channels affiliated to CNN, turning into a sort of press agency itself[+] NoteAn even bigger partnership could also be created with the CBS network.X [3]. Bilateral agreements exist, for example, between France and M6, BFM TV, France Télévisions and Public Sénat. These partnerships are based on a reciprocity principle, with CNN presenters also using journalists and images from these networks from time to time. CNN’s international expansion has also taken the form of horizontal integration with the creation of joint-ventures. In Turkey, India, and more recently, Nigeria, CNN Türk, CNN IBN and NN24 respectively can use its images. With these joint ventures, CNN is establishing its global reputation even more firmly and increasing its revenue.

Promising to « go beyond borders », CNN has added three major production centres to the one in Atlanta. Situated in London, Hong-Kong and Abu Dhabi[+] NoteThe Spanish-speaking CNN channel has its own office in Mexico to broadcast to Latin America.X [4], these produce eight to ten hours of content every day and follow news in real time for five broadcasting regions: Asia-Pacific, South Asia, Latin America, North America and Europe /the Middle East/Africa. These zones correspond to the divisions drawn up on the map of the world in 1997 to create CNN’s regional approach.

In fact, the universal broadcasting of programs all over the world was abandoned in 1992 for lack of a big enough audience. Only major events are still treated simultaneously on CNN US and CNNI. Today, 85% of CNNI’s programs are produced by the channel itself. Admittedly, CNN US prime-time programs are reproduced on the international network, but they are not transmitted at peak viewing times. The American network is not available outside the United States moreover; just as the basic cable offers do not include CNNI. More generally, the primacy of the audience ratings meter has led to a drastic limitation of coverage of world news on CNN US. Not only does CNN US no longer repeat any of CNNI’s programs[+] NoteApart from Q & A, the short weekly Cross Channels program presented from London and New York.X [5], but the broadcasting of international news on its airwaves is now very rare. In 2009, the channel devoted an average of only 23% of its air-time to this, of which only 5% was not linked to United States involvement abroad.
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A news-processing laboratory

When deciding on the station’s programs and identifying market opportunities, CNNI’s marketing teams analyse the tastes and attitudes of international audiences. « Audience figures are mainly of use to advertisers, but when deciding on our offer in terms of content, we use proprietary tools – polls, panels and barometers – that enable us to understand the segmentation of the international audience and the performance of the programs, as well as trackers to follow the evolution of the CNN brand’s position compared to the competition », explains DidierMormesse, Vice-Presidentof Advertising Sales Research & Development & Audience with CNNI. A case in point; the results of the marketing study « Global Connexion » were used to justify the overhaul of the channel’s prime-time schedule in the Autumn of 2009, a schedule based on daily rendezvous with star presenters.

New programming is addressed in the first instance to European viewers who receive the broadcasts live, whereas pre-recorded programs are transmitted in Asia, a region that has had no new programs recently. The importance accorded to Europe bears witness to the strategic priority of this geographical zone. It is the leading international news market and is the audience pool where CNN has the most viewers, that is to say, 60% of its potential international audience.


In line with the logic of the market, CNNI broadcasts solely in English. In this respect, it differs from BBC World, France 24 and Russia Today, whose resources are obtained mainly from public funding and which pursue a political objective. Since 2006, these channels have created an Arab-speaking branch to offer alternatives to Al-Jazeera and Al-Arabiya in a bid to influence public opinion in the Middle East. Until now, CNN has restricted itself to the launching of an Internet site in Arabic, since running a Arabic-speaking channel did not seem likely to generate sufficient income.
By extending its offer to Internet and mobile telephony, CNN has become more than just a news channel. Its news is now not only available in the world’s homes and hotels, but is accessible to consumers of news on the move. CNN has also enlarged its range of products by creating a financial news site and CNN Airport, a channel broadcast in American air terminals. By adopting a cross-platform approach, CNN is diversifying its operations and can sell a wider variety of advertising space.
 
This opening-up to new platforms also serves as an answer to the challenge laid down by the social media, who are in many ways dislodging CNN from its position as the international politics media player. In the 1990s, with its exclusive coverage of the War in Iraq, CNN figured prominently on the map of media that counted on the world stage. There was even talk of the « CNN effect » to describe its supposed capacity to change the course of world affairs. Today, a new hand has been dealt. The movers in international news are more likely Twitter and Facebook, valued for their speed and ubiquity, but it was its coverage of the Green Movement in Iran following the country’s 2009 presidential election that was the real revelation: CNN was reduced to following the messages of social network users live.


The development of CNNI nonetheless also continues on the small screen with the boom in pay programming favouring its expansion. « In Central Europe and Asia in particular, technological advances – the move from analogue to digital, television over Internet protocol to name but two – open up new markets that allow an increasing number of networks to obtain revenue from advertising and sales to distributors », explainsBenReneker, an analyst with SNLKagan.
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A race for elite audiences

Accessible at the time of its launch in 1985 in 198 hotels in Europe, CNNI became available the following year in more than 150,000 European homes[+] NoteMeredith Amdu, Nick Bell, “The Boundless Ted Turner: Road to Globalization”, Broadcasting & Cable, 11 April 1994.X [6]. Since then, its penetration has been continually increasing and CNNI is now broadcast on more than 257 television sets outside the United States, including 153 million in Europe, 32 million in the Middle East and 15 million in Africa. But who are its audience?
 
The world channel targets a relatively restricted audience. « Our audience might be compared to business class passengers on a plane; mainly men who are educated, comfortably off, frequent travellers, with responsibilities and influence. It can be recognised by its consumer habits, rather than by its passport », explainsSylvainRoger, sales managerfor CNNin Continental Europe. CNNI’s competitors are therefore France 24 and Al Jazeera English, who are targeting the same audience, rather than LCI or I-Télé who broadcast more local content and are first and foremost interested by French viewers.
 
Since the mid-1990s, the annual results of the European Media Survey (EMS), carried out by the polling organisation, Synovate, have measured the media consumption of the 20% of households with the highest incomes in Europe. They demonstrate the astonishing stability of CNNI’s audience ratings, which arrive almost systematically in first place.
 
Nonetheless, CNN’s success has opened the door to competition. The graph below traces the vigorous growth of the newcomers and shows how BBC World and the
multilingual Euronews channel are following hot on the heels of CNNI. In 2007, CNNI had a weekly audience of 16.7 million European viewers.
 

The gap between CNNI and its international rivals continues to tighten with European audiences. The results of the study EMS 2010, which include this once per mobile consumption, indicate that 22.4% of respondents watch CNNI every week, against 20.3% for Euronews and 19.5% for BBC World.

Outside Europe, in 2009, CNNI showed itself to be the weekly leader in the Middle East amongst the Anglophone networks, with 14% of the wealthiest audiences, followed closely by BBC World. The same trend can be seen in Asia and Africa where CNN has overtaken its rivals BBC World, Euronews and the financial news channel CNBC Africa.

CNN owes these results to its celebrity and credibility that make it a benchmark news brand towards which international audiences turn at times of international crisis or major event. The viewing peak recorded in Europe following September 11 bears this out (see graph).
In the United States too, the audience is made up for a large part of occasional viewers eager to follow the developments of a compelling news story. As a result, CNN US permanently retains its place at the head of those channels viewed monthly by the greatest number of viewers and its website is the most viewed in the sector.

However, once coverage of an important event is over, American viewers are quick to desert the channel. « CNN US certainly has the most viewers during a period of hot news, but never comes first in the evening », says BradAdgate, Vice-President of HorizonMedia. From March 2009 to March 2010, prime-time programs lost almost half their viewers. They represent only a quarter of the audience of the Republican Fox News and are often beaten by the Democrat MSNBC. To face up to these competitors, CNN US has emphasised its wish to present news in a non-partisan and objective manner, but has not attracted the audience it was counting on. It was against this background that several of CNN’s star journalists including the reporter Christiane Amanpour and the emblematic Larry King, chose to depart from its airwaves. CNN is increasingly seen as the loser in the American news market it created.
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Extent of American revenue

Against this background of falling audiences in the United States and to reassure Time Warner’s shareholders, in June 2010, Phil Kent, the Chairman and CEO of Turner Broadcasting System made public for the first time details of the composition of its financial results. We learn, for example, that CNN generated around 1.6 billion in revenue in 2009. In so doing, the channel, which as we know, was somewhat reluctant to divulge its turnover, also indicates the relative importance of its American and international activities.
 

Source: graph adapted from page 56 of this presentation.
 
The graph above shows that four-fifths of CNN’s revenues come from the American market, where it has built its development on two pillars: revenue from cable and from advertising. CNN obtains more than a third of its revenue from the cable sector alone in the United States, a priority source to the extent that it is written into the channel’s very name – Cable News Network. In 2009, each subscriber paid a monthly average of 0.50$ to receive CNN US, giving the company an annual revenue of almost 580 million dollars. The accumulated income from advertising for CNN US and its subsidiary HLN amounts to 513 million dollars, a figure that is nonetheless well below that of Fox News.
Further afield, CNN’s international operations represent only a fifth of its overall revenue, that is to say a total that can be estimated at around 325 million dollars for 2009. CNN US’s advertising prime-time revenues alone correspond to the entire income generated by the sale of advertising time on CNNI. The significant difference in the results produced in the United States and abroad may prove surprising at first, with the activities of a single country making four times as much as those in all the rest of the world. The main reason for this difference can be found in CNN’s general public positioning on the American market, the contrary of its niche international audience.

Around three hundred people work in CNN’s integrated sales company to attract buyers of advertising space. From the French premises of the parent company Time Warner on the outskirts of Paris, Sylvain Roger points to CNN’s competitive advantage, saying, « our channel is leader on all its high-end target markets. Advertisers are turning first towards us, then towards other channels as an extra, depending on their own geographical or cultural interests ». In this respect, only a small number of advertisers – finance, energy, and luxury goods multinationals and governments wishing to promote tourism – use channels such as CNNI. International media are not particularly appropriate for most of them, mainly because of the different positioning of their products from one market to another.

CNNI has nonetheless achieved a unique performance. It is the only profitable international news channel on the market and has been ever since it was created. All the others have recourse to public funds to cover their costs.

By way of example, at the end of its second financial year in 2008, France 24 only made 2% in self-generated resources and BBC World News obtained 63 million pounds or almost 100 million dollars in advertising revenue for the budget year 2009. In comparison, and in view of the graph above, it can be estimated that CNNI’s advertising revenue exceeded that of the British channel by at least twenty million dollars.

In short, CNNI’s total turnover compared to that of CNN US has proved to be far lower. What consequences will this have for the creation of content? Are efforts concentrated mainly on the American market, generator of the most revenue? According to CNNI’s Paris correspondent, Jim Bittermann, audience ratings in the United States have not changed the way it works, « we cover news on its own merits and not because we think it will increase our audience. » With regard to the way the editorial team works, he adds that « ever since I started working for CNNI, I have suggested stories to the international department who then offer them to program producers.  Similarly, half of all ideas for reports come from the international service. » 

Other reporters note that American and international networks do not start off on the same footing. Greater interest for CNN US can be seen at different stages of the production of news. At times of hot news stories, CNN US presenters have priority in getting correspondents to participate live in their programs, even when the topic is of international interest, explains a CNNI journalist working in Atlanta. Likewise, Rebecca McKinnon, former Peking correspondent reports that in 2003-2004, bureau chiefs working abroad were informed that they should give CNN US priority in their work and ensure that their reports were relevant to American audiences. She explains that six years later, the American channel continues to determine CNNI’s agenda.

Owned by the Time Warner Group, whose stock market price is linked to the results of its subsidiaries, CNN aims to maximise its profits and profitability. Consequently, the American station is of particular importance for its parent company, since it is CNN Worldwide’s primary source of revenue. Initiator of the continuous television news market, CNN has news teams deployed all over the world and uses a variety of platforms. However, for the Atlanta Group, North American activities remain those likely to ensure profits.


Translated from the French by Elisabeth Guill
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  • 1.
  • 2. “Cable network begins Continuous News Programs”, New York Times, 2nd June 1980, p.B8.
  • 3. An even bigger partnership could also be created with the CBS network.
  • 4. The Spanish-speaking CNN channel has its own office in Mexico to broadcast to Latin America.
  • 5. Apart from Q & A, the short weekly Cross Channels program presented from London and New York.
  • 6. Meredith Amdu, Nick Bell, “The Boundless Ted Turner: Road to Globalization”, Broadcasting & Cable, 11 April 1994.
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