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Tuesday, 25 September 2012

Honesty's price: CNN and Media bias

A recent article in The Economist (Sept 21, 2012), "Unbiased and unloved" reports the stagnation of CNN's viewership relative to its competitors. According to data from Nielsen, from 1998-2012, CNN's daily viewership in the US has been relatively flat averaging 0.5 million viewers while its competitors, Fox News and MSNBC show steady growth. More painfully even, in the last few months, there is a decline for CNN while its competitors benefit - as expected - from the election period. Fox News has over a million daily users while MSNBC has just passed CNN at over 0.4 million.

The article attributes this decline to CNN's lack of political bias. While CNN clearly provides high quality news, often being the first to identify scoops, its commentaries are well balanced and this does not entertain the audiences. Indeed, there is plenty of research showing that people want to hear what they already believe, so an elaborate and objective political argument will appear boring to them. This may well explain the slow decline of viewership and is perfectly consistent with recent economic research on media bias.

What to do however? Should CNN also become a biased news provider. For one, it would likely lean on the left to compete head on with MSNBC. The two channels already share the same number of viewers as Fox News, so increased head-on competition wouldn't help CNN's case. Instead, CNN decided to experiment with diversifying its program offering by providing documentaries on top of news, but again, is this really a good idea when competition in that area (e.g. HBO) is far more sophisticated and already provides a broad set of alternatives?

I believe that the solution lies in debates! The channel could be an impartial platform for political debates between advocates of both the right and the left. There is nothing more entertaining than a good fight and, if it is organized well, the channel can make sure that the political affinity of the winner alternates, thus retaining its unique impartial positioning. A great example of this approach is the highly successful Munk debates series. In any case, it would be a pity to lose the unique honest news channel in the U.S. especially in these trying times in U.S. politics.

Friday, 14 September 2012

Election-time ad revenues in the US

The Economist has just published some figures on the size of the expected revenues from political ads in the coming election year: $5.2 billion - some 23% increase compared to 2008! What is cool though is that the share of online advertising has increased quite a bit. It now stands at 6% (still small) but at some $310 million, it is 10 times higher than the last time. It is also interesting that, while last time most of the online advertising was seacrh advertising, this time video sharing sites and social media have largely taken over the bulk of online activity. Of course, TV advertising still dominates at over 60% of total spending. Cable does well because it is good at targeting (part of the reason while online advertising also succeeds) but, interestingly, local broadcast TV is also making a killing especially in swing states. Hope it will lead to the right outcome....