Everyone knows Jeff Zucker's No.1 job as the new chief of CNN will be to fix the channel's ratings problem. CNN has trailed Fox News Channel in audience for years.
But hold that thought.
As far as the ad biz is concerned, there's nothing really wrong with CNN and Zucker ought to be very careful if he tries to "fix" that. Insiders know that although CNN routinely gets its butt kicked in terms of primetime audience, it's also incredibly profitable. Adweek broke down the 2011 numbers:
It is true that in every hour of prime time, CNN has trailed Fox for the last seven years. But here is the paradox: In the same period, 2003-10, CNN has more than tripled its earnings. In 2010, it netted over $620 million, which is more than it has ever made in its 30-year history.
To be sure, Fox News also does amazingly well, and will book a profit of more than $730 million this year. That is 15 percent more profitable than CNN, and it comes down to its lower production costs. It is far cheaper to produce O’Reilly-type opinion than send news teams around the world.
Part of that profit comes from the non-partisan lock-in effect: cable systems must carry the conservative Fox because so many people watch it. But in order to not be accused of bias, they must also carry CNN. This gives CNN the upper hand when negotiating carriage fees.
The other part of the profit comes from audience "cume." Fox has high ratings because its viewers tune in for hours at a time. CNN's watchers tune in for the headlines and the weather, and then leave. CNN also has many more of these check in/check out viewers outside primetime. So the channel has a greater cumulative number of viewers during a day than Fox does. Advertisers want cume because they want to reach as many people as possible.
So those two big issues—neutrality and cume—are things that Zucker actually needs to leave alone.
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