Broadcasters find perils in the business of business shows
Whether the subject is Carl Icahn or Rupert Murdoch, the October market plunge or the trial of Drexel Burnham Lambert, business news seems to be more interesting these days. And plenty of broadcasters have leaped to take advantage of what they see as a demand for up-to-the-minute business reporting.
Take NBC, for example. In probably the best-organized and strongest move so far by a broadcast network into cable, NBC is preparing to launch a business-news network early next year as a rival to cable's existing Financial News Network. The service will be known as the Consumer News and Business Channel and is expected to do well.
``CNBC comes in with a great deal of clout, an ability to put out a slick product with a large number of subscribers,'' says Sharon Armbrust, an analyst with Paul Kagan Associates Inc., a market-research firm.
That fact, she adds, is already putting pressure on the Financial News Network. ``They're trying to beef up their position by getting support - investors - from within or without the industry in order to improve their product and get their deeper pocket, so that they can compete on equal footing,'' Ms. Armbrust says.
But Armbrust doubts there is enough space on cable for many more entrants, since many cable systems already have a shortage of channel capacity.
The result of this competition, predicts Mark Riely, an analyst with Eberstadt Fleming Inc. in New York, will be one clear leader in business news, ``just as MTV is considered the dominant purveyor and exhibitor of music videos.''
Furthermore, Mr. Riely says, despite the proliferation of radio and television broadcasts oriented toward business, the actual audience for such news is narrow. That sharpens his curiosity about CNBC.
``Why are they launching, and do they have a real sense of how significant their losses could be and how long they'd have to sustain losses?'' he asks. ``It leads one to wonder whether they are really doing this to bully FNN to sell out to them - at a price that NBC finds attractive.''
NBC has already failed twice with business-news formats on television. ``Strictly Business,'' produced for syndication by the network's WNBC-TV in New York, folded in April 1987, and ``Before Hours,'' a network venture in cooperation with the Wall Street Journal, ended its run earlier this month.
But the demise of those programs - and others in recent years, such as ESPN's ``Business Times'' and Walt Disney's ``Today's Business'' - has not diminished the hope of new entrants that they will create the right formula for success.
Several of the latest ventures are on radio, and it's no surprise. The AM dial these days is a troubled one, with perhaps two-thirds of the nation's 6,000 stations strapped for cash. A special opportunity exists for business-news broadcasters in radio, where they need only a small audience to make a profit.
The reason? An all-business station is like an all-religious or all-Hispanic station, says Ed Shane, a consultant who heads Shane Media Services of Houston. Although the audience itself may be so small that the station never shows up in the ratings, the broadcaster's loyal listeners will still attract enough advertising or sell enough programs to make a go of the operation, he says.
Thus, Business News Broadcasting, Business Radio Network, and Money Radio Network are competing to sell their 24-hour programming to stations across the country. But Mr. Shane expects a decline in the number of competitors. ``There are so many people scrambling for this niche, not everybody will be able to fill it.''
In the end, the approach that a network takes to deliver its reports will likely determine who finishes first.
There is the yet-to-be-started Business News Broadcasting, which will be very technical, Shane says, and is likely to win a loyal following in a tiny market.
``It looks like it's going to be the narrowest of them,'' he says. ``It really is, `Here's what's happening in the financial world.' I equate it to the pink pages of the Financial Times.''
And then there is the consumer-oriented Business News Radio, whose broadcasts sound much like those of an all-news station, with a business tinge. That approach, says Shane, answers questions like: Will gas prices go up? Will I be able to afford Christmas presents this year?
A study done last year by the Ford Foundation and the Foundation for American Communications found that the broad road to success has been in consumer-oriented, entertaining reports.
Although people want news about economic issues because ``they constitute the ground over which political and social affairs are played,'' the report said that ``the demand for accurate analysis of such affairs is likely to be dominated by the demands for entertaining or personally useful angles on such affairs.''
MONEY ON THE AIR: THE BOOM IN BUSINESS SHOWS `Adam Smith's Money World': Television. One full-time reporter. Half-hour weekly. Started: September 1984. Not profitable. Stations: 231 public stations. Based in New York. Transmitted by satellite. Produced by WNET.
Business News Broadcasting: Radio. Full-time reporters: 35. 24 hours a day. Start-up: January 1989. Profit expected at end of 1992. Stations: 12. Based in New York. Transmitted by satellite.
Business Radio Network: Radio. Full-time reporters: 16. 24 hours a day. Started July 4. Expected to be profitable in 1989. Stations: 15. Based in Colorado Springs, Colo. Transmitted by satellite.
`Business Update': Radio. Half-hour weekdays. Started 1985. Expected to break even: 1990. Stations: 72 public stations. Based in New York. Transmitted by satellite. Produced by CBS News for American Public Radio.
Cable News Network: Television. Full-time business reporters: 8. Three live half-hour weekday shows and hourly five-minute reports from 8:30 a.m. to 5:30 a.m. Four half-hour taped shows on weekends. First half-hour business show began June 1980, others followed. Profitable. Based in New York. Transmitted by cable.
Consumer News and Business Channel (CNBC): Television. Full-time reporters: not yet decided. 24 hours a day, weekdays. Start-up early 1989. No comment on when expected to be profitable. Decision pending on where to be based. Owned by the NBC-TV network.
Dow Jones/The Wall Street Journal: Staff: 400 journalists of WSJ. (1) ``Dow Jones Report.'' Radio. Two-minute reports, 15 times on weekdays. Begun August 1987. Expected to be profitable in 1989. Stations: 35 (on FM). Based in New York. Transmitted by satellite. (2)``The Wall Street Journal Report.'' Radio. Three-minute reports 18 times on weekdays from 6:50 a.m. to 9:50 a.m. Begun November 1980. Profitable. Stations: More than 90 (on AM). Based in New York. Transmitted by satellite. (3)``The Wall Street Journal Report.'' Television. Full-time reporters: 3. Half-hour weekly show. Started 1982. No comment on profitability. Stations: 100. Based in New York. Syndicated by satellite.
Financial News Network: Staff: 250 employees involved in news gathering. (1) Television. Business news from 6 a.m. to 8 p.m. weekdays. Network started November 1981. Profitable. Based in New York. Transmitted by cable. (2)``Business This Morning.'' Television. Half-hour weekdays. Started in February. Profitable. Syndicated to 149 stations, transmitted by satellite. Based in New York. (3)Twice hourly weekday stories. Radio. Start-up Oct. 3. Profit expected in 1989. Stations: 55. Based in New York. Transmitted by satellite. Joint venture of FNN and Starstream Communications Group Inc.
Money Radio Network: Radio. Full-time reporters: 20. 24 hours a day. Started in August. Expected to be profitable by the end of the year. Stations: 4. Based in Los Angeles. Satellite transmission. Produced by KMNY.
`Nation's Business Today': Two-hour weekday shows. Television. Started fall 1985. Breaking even financially. Based in Washington. Transmitted on ESPN cable. Produced by United States Chamber of Commerce.
`Nightly Business Report': Television. Full-time reporters: 33. Half-hour weekdays. Started 1981. Profitable. Stations: 270 (on public TV). Based in Miami. Syndicated by satellite. Produced by WPBT2 in association with Reuters news agency. `Wall Street Week With Louis Rukeyser': Television. One full-time reporter. Half-hour weekly show. Started November 1970. Profitable. On 300 stations of Public Broadcasting Service. Based in Owings Mills, Md. Produced by Maryland Public Television.
Information supplied by the broadcasters.