For Fox News, Ad-Sales Market Isn't Fair, Balanced - WSJ

[question everything]

By JULIA ANGWIN
Staff Reporter of THE WALL STREET JOURNAL

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Attracting a large audience can often let a TV show charge higher rates, because advertisers place a premium on the ability to reach a large number of people at one time. That's why giant events like the Super Bowl or the final episode of "Friends" command such high rates. But a large audience is not a guarantee of garnering premium prices. Media buyers say they generally pay Fox News ad rates that are about 75% to 80% of what they pay CNN -- even though CNN has only about half the audience of Fox News.

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Since Fox News sold its ads for extremely low prices during its early years, and can boost them only incrementally each year, it must negotiate from a lower starting point than CNN. Similarly, CNN is negotiating from the high prices it established during its heyday as the only 24-hour news channel. Although Mr. Rittenberg has whittled down the price gap tremendously, he admits he hasn't been able to close it altogether. He says he hopes to reach parity during this year's upfront negotiations.

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CNN has 3,800 employees world-wide and more than 14 different networks and services, such as CNN International and CNN Headline News. Its networks are available in more than 200 countries. By contrast, Fox News has a little over 1,000 employees and is distributed in more than 40 countries. Its best-rated shows are opinionated commentary programs, "The O'Reilly Factor" and "Hannity & Colmes." Although the rest of the lineup is news, those shows leave some advertisers with the impression that Fox News is sometimes too hot-blooded and partisan to be considered true journalism. "The Fox News Channel is not perceived as pure news, because it really is no different than talk radio," says Jon Mandel, co-chief executive of Mediacom U.S., a media-buying company. That should translate into lower ad rates, he argues. (Mediacom clients that advertise on Fox News include Staples Inc., Warner Bros. and GlaxoSmithKline PLC.)

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Fox News was founded in 1996 by Mr. Murdoch and Roger Ailes, a former Republican political consultant who made his name in television running CNBC, the business-news channel owned by General Electric Corp.'s NBC division. (Dow Jones & Co., publisher of The Wall Street Journal, is co-owner with NBC of CNBC television operations in Asia and Europe. Dow Jones also provides news content to, and derives revenue from, CNBC in the U.S.)

Mr. Ailes pitched Fox News as a "fair and balanced" alternative to a perceived liberal bias in mainstream media, but loaded up the prime-time schedule with conservative commentators. The snazzy graphics and opinionated coverage developed a loyal following.

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Write to Julia Angwin at [email protected]

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