Can NBC and Dow Jones offer a top business news service? It may be well resourced, but will the merger make money?

The wonder of it was that it took them so long to do the deal. For two years it has been assumed that NBC and Dow Jones would merge their international TV news operations sooner rather than later. Well, they certainly missed the ’sooner’ bit and now the two companies are praying it isn’t too late to salvage a world class - and viable - business news brand.

The wonder of it was that it took them so long to do the deal. For

two years it has been assumed that NBC and Dow Jones would merge their

international TV news operations sooner rather than later. Well, they

certainly missed the ’sooner’ bit and now the two companies are praying

it isn’t too late to salvage a world class - and viable - business news

brand.



Under the terms of the deal announced last week, CNBC Europe and Dow

Jones’s European Business News will merge to form a revamped CNBC. The

same will happen in Asia, with Asian Business News being folded into the

new regional operation. In the US, CNBC will have access to Dow Jones’s

newsgathering resources, including the Wall Street Journal. And,

worldwide, the new entity will also draw on the expertise of NBC’s new

’web TV’ joint venture with Microsoft, MSNBC (Campaign, 12

December).



In terms of resource, it is an awesome prospect. In terms of long-term

rationale, potential revenue and influence, however, it’s a lot more

questionable.



Pan-European TV channels attract around dollars 250 million a year -

somewhere around 1 per cent of all European TV revenues. Around 80 per

cent of that dollars 250 million is accounted for by three channels: MTV

Europe, Eurosport and CNN International. It’s the same in Asia - and

global satellite TV brands attract a minuscule proportion of worldwide

revenues.



This is a tiny medium - and yet the contenders keep queuing up. In this

sector, the mantle of young pretender now passes to Bloomberg, which

launched a 24-hour TV news channel earlier this year. Last week, it

served notice that it’s ready to be regarded as a serious player,

appointing CDP and New PHD to launch a profile-raising campaign across

Europe.



A couple of weeks ago, ITN invested in Euro News, a Brussels-funded

operation that clearly uses the ’Scorchio’ channel on Paul Whitehouse’s

the Fast Show as its model of best practice. But with ITN investment, it

could in time become a serious prospect. Last but not least, there is

BBC World.



Surely the future still looks bleak for everyone in this market? Robin

Kent, the managing director of Universal McCann Worldwide, agrees that

it’s a crowded sector. ’I don’t think anyone has been making money and

even CNN has been having a hard time of it recently. It was obvious

there would be casualties. On the positive side, NBC is TV-orientated

and Dow Jones is newsprint and business information biased. It’s a good

fit. But that doesn’t mean it will generate revenue.’



EBN and CNBC argued in the past that they were in a business niche

market and were not competing directly against the other news providers

But advertisers haven’t always seen it that way - they all sell what is

basically an audience of travelling business people. Will the merger

help to harden the market? Kent doesn’t think so.



’It is spread so thinly that the companies have real problems

demonstrating through research that they are able to deliver. In any

case, I don’t think price is the issue. Even if something is cheap

there’s no point buying it if it isn’t right. And the problem for news

channels is the amount of unsold airtime out there,’ he comments.



But Liz Workman, executive regional media director of Leo Burnett,

argues that ad revenue isn’t the only factor in this equation: She adds:

’EBN isn’t a terrible product and the new service has potential. But I

can see CNBC being encrypted and developed as part of a subscription

package with other channels. That would mean leveraging the NBC rather

than the Dow Jones part of the partnership - but people are

acknowledging that ad revenue will have an increasingly less important

part to play in this market.’



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