Slate's Moneybox: Network News, Alive and Profitable
The death of ABC anchorman Peter Jennings to lung cancer has sent shockwaves through the world of network news. Some analysts speculate that the era of quality news at the "big three" networks — ABC, NBC and CBS — is ending. But Slate financial columnist Daniel Gross begs to differ. He talks about the state of network news with Madeleine Brand.
MADELEINE BRAND, host:
The death of ABC News anchor Peter Jennings sparked many stirring obituaries, and not just for Jennings himself. Many media critics say Jennings' death has brought the network evening newscast one step closer to extinction. But the evening news does show one important sign of life: It's still profitable. Here to discuss why is Daniel Gross. He's financial columnist for the online magazine Slate.
And, Dan, the main argument against the evening news these days--`Well, who needs it? We've got cable news. We've got the Internet.' And who has the time to actually tune in at 6:30 every night to watch these newscasts?
DANIEL GROSS (Slate): Apparently, some 26 million people. The big three newscasts are getting about 26 million viewers per night between them. Now that's down 30 percent in the last 13 years, which is a significant drop, but in today's age of media fragmentation--you have 200 channels and every channel struggles to get any kind of mass--those are very large numbers.
BRAND: And those are numbers that advertisers like.
GROSS: Advertisers like to reach large groups of people with a single ad buy. They don't want to run around to 80 different channels and try to pick up a million viewers here and 300,000 there. The rap on the news programs is that their audiences are older, and we've long been taught that advertisers want young demographics, people 18 to 35 who are big consumers, who are just getting their tastes settled. But these older viewers also can represent a very attractive audience for certain advertisers.
BRAND: Such as drug companies.
GROSS: Yes. Drug companies like AstraZeneca, Johnson & Johnson, Bayer--these are among the largest advertisers on the nightly newscasts. So are car makers, companies that sell packaged foods, diet products, etc. Their core audience is watching this show.
BRAND: And, Dan, how do you know that these evening newscasts are more profitable?
GROSS: The reason they're profitable is that increasingly, the networks have figured out ways to distribute the costs of production over other properties. NBC has MSNBC and CNBC that help contribute content to the nightly show; ABC has a 24-hour network that it's starting. So they figured out ways to cut costs by reducing bureaus overseas, by putting a lid on salaries. We're certainly not going to see the kind of salaries that Peter Jennings, Tom Brokaw and Dan Rather get continue to be paid in the future because we don't have these anchor stars anymore.
And they continue to get a lot of advertising. If you want to reach 10 million people at one show in a single demographic, it's more expensive to reach them than it is to reach 10 million people by buying 10 ads on 10 different shows that each have a million viewers. Concentration makes a property more valuable.
BRAND: You know that they're concentrated. Is that because they're not going anywhere, they're not skipping channels and channel surfing?
GROSS: One of the other things that advertisers like about evening news audiences is that they're loyal. People tend to come back to the same show and sit for a half-hour every night. And these older people don't have TiVos. They're not recording it and skipping the ads, which, you know, defeats the whole purpose of selling ads in the first place. These are, in many ways, the sort or idealized TV viewers of 30 years ago who would sit, watch a show regularly and watch the ads.
BRAND: Opinion and analysis from Daniel Gross. He's the financial columnist for the online magazine Slate.
Thanks, Dan.
GROSS: Thank you.
BRAND: Stay with us on DAY TO DAY from NPR News.
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