Just how many more news bulletins can the global business community
take? Alasdair Reid studies the players in a crowded market
In the last year or so, there has been a deluge of satellite channels
aimed at the business community. Targeting this premium audience -
affluent consumers who also have control of corporate purse-strings -
has always been an obsession for media owners.
International channels make sense because those in the upper reaches of
the business community reputedly spend half their lives jetting around
the globe signing deals.
But recently, this reasoning has been taken to extremes. CNN
International has been around since the 80s, but it has now been joined
by BBC World, European Business News, CNBC and Euro News. Even NBC
Europe, which was previously a general entertainment outfit called
Superchannel, has been given more of a news and information bias.
Just how much news can business people take? They already have one of
the most sophisticated press sectors devoted to them and the domestic
airwaves have also become crowded. When Channel 5 launches next year,
judicious channel-hopping will allow UK viewers to select an almost
uninterrupted schedule of terrestrial television news and current
affairs from teatime to 11.15pm, when most captains of industry are, of
course, snugly tucked up in bed. And they can always fill in any gaps by
tuning in to Sky News - on air around the clock. The same news-saturated
scenario is found in the major European markets. Is there room for the
international channels?
As expected, the channels themselves maintain there is. They may be
niche offerings, but they insist that the appetite is there. BBC
Worldwide is run by European Channel Management, a joint venture owned
by BBC Worldwide, Cox Communications and Pearson. Wayne Dunsford, the
marketing director, says pre-launch research was very positive: ‘Our
focus so far has been on gaining distribution on cable networks. It has
been hard work as there is a problem with cable capacity in some of the
major markets such as Germany and the Netherlands, but we are pleased
that we are now in 24 million homes. We have also been putting a strong
emphasis on getting into hotel rooms because it is important for
advertisers to be reassured that we are being watched there. We are
giving it our best shot in terms of distribution and then our prospects
will be based on the quality and range of programming that the BBC
offers. When the distribution is there, we are confident we will achieve
higher audience appreciation than our rivals.’
But, as Dunsford indicates, distribution is a major headache for this
sector. The arrival of digital transmission technology will create
almost unlimited cable and direct-to-home (and hotel) satellite
capacity; but, in the interim, even well-established channels such as
CNN are being thrown off cable networks across Europe to make space for
mainstream domestic offerings. In September, for example, the UK’s two
largest cable operators, TeleWest and Nynex, began reviewing the
position of all the international news channels as they tried to find
room for the Granada Sky Broadcasting channels.
Even when distribution problems are solved, that doesn’t guarantee an
audience - whatever the market research says. David McMurtrie, the
director of international media at MediaCom London, says he is not
convinced by the thinking behind narrowly focused dedicated business
news channels. ‘I totally disagree with the concept that business people
never switch off,’ he explains. ‘When travelling, they are bombarded
with media to and from the airport, during the flight, in offices and in
their hotel rooms. They are not reliant on broadcast media at all. For a
channel to stand out in that morass of choice it has to offer something
really special.’
McMurtrie says MediaCom clients use NBC Europe and CNN - which he
maintains people turn to first even if they might not watch for long -
but he is just as likely to recommend Eurosport because business people,
he believes, have usually had enough of business by the time they return
to their hotel rooms.
David Cuff, the broadcast director of Initiative Media, shares this
scepticism. ‘They keep telling us that this is demand-driven but the
truth is that there is just too much news around, both on terrestrial
and satellite,’ he says. ‘Who really wants it, especially when there’s
such a wide variety of other channels to chose from? The news channels
all offer something in programming terms but there isn’t much that is
distinctive about them. They are all chasing the same audience and there
is a limit to how far you can fragment any market.
‘It makes you wonder where their revenue is to come from,’ Cuff adds.
‘My view is that they are all run as loss leaders. You wonder how long
owners will continue to subsidise them.’
One of the major problems in attracting ad revenue is a lack of reliable
audience data. Niche channels barely register on domestic meter panels
across Europe and the pan-European surveys that take in business viewing
do not provide the accuracy or reliability that agencies need. All of
the channels in this sector are planning to make substantial investments
in individual research projects but a robust trading currency will take
time to establish.
Despite this, Liz Workman, the regional media director of Leo Burnett,
is more optimistic about the sector’s prospects. ‘I think they all have
something to offer and it’s not impossible to take a view on their
audience performance if you apply common sense to the available research
data,’ she says. ‘From their point of view, the good news is that pan-
European television spend is going to keep growing. But they have to
explore avenues beyond the traditional 30-second spot advertising - such
as partnerships between advertisers, content providers and media owners
in areas such as sponsorship and masthead programming.
Digital technology will also help too, not just in easing distribution
problems but in allowing channels to develop subscription revenues.’
But even Workman believes the market is too crowded and that there will
be casualties. Most observers agree - and the market will be further
fragmented when MSNBC, a news channel run by NBC in partnership with the
software giant, Microsoft, comes to Europe next year. Are all these
channels just too specialist to survive?
CNN is the strongest brand - it has been around the longest and has a
reputation for breaking international news - but it remains very US-
oriented in its coverage. In the long run that could be a turn-off for
viewers on this side of the Atlantic, especially if competitors get
their acts together. The channel with the best European credentials is
Euro News. Backed by the European Broadcasting Union and part-funded by
the European Community, it takes news feeds from all of Europe’s major
public service broadcasting channels across the Continent and repackages
the material with dubbed voiceovers in a choice of five languages. But
production values are less than slick - there are no on-screen anchor
presenters - and it comes across as a worthy but somewhat chaotic lucky
dip of stories.
BBC World also trades on the depth of its European coverage and it
schedules a wide range of material including documentaries and lifestyle
programming as well as hard news. ‘We are aimed at a business audience,
not business news bores,’ Dunsford comments.
European Business News, backed by Flextech and Dow Jones, the publisher
of the Wall Street Journal, is also moving towards this broad church
philosophy. Launched last year as a purely business channel, it began
introducing lifestyle programming ‘designed to appeal to the businessman
in everyone’ back in September. ‘Other business channels are either
American or aimed squarely at financial professionals,’ Rob Benyon, the
managing editor of EBN, comments. ‘That formula is out of date. Real-
time financial and market information is important but, on its own, it
is not enough. People now have broader interests - it has as much to do
with living as trading.’
Those comments are aimed directly at EBN’s closest rival in terms of
positioning, CNBC, which is fully committed to a purely business and
financial news schedule. The NBC organisation is in the fortunate
position of having a two-pronged attack, with NBC Europe providing
programmes for the business person in a more relaxed mode. But Peter
Bullard, the European director of CNBC, believes EBN is going down a
blind alley. ‘I think it’s a big mistake to try to be all things to all
people or try to take the business person through their whole biorhythm.
I happen to be a fan of the Financial Times, which succeeds because it
remains true to the purity of its offering,’ he says.
‘We have that same tight focus on business and financial information.
All of our competitors have things that I like, but the reality is that
when you switch to them you don’t have a clue about what you’re going to
get. Viewers always have the remote button to hand and infra-red can be
a cruel form of democracy. If they want business information, they know
where to come.’
These channels are backed by organisations with deep pockets and all
insist that they are here to stay. But it could be a painful war of
attrition. A straw poll among agencies reveals that the more specialised
channels, EBN and CNBC, are regarded as the ones with the toughest task
ahead. Indeed, earlier this year there was speculation that the two
channels were in merger talks. Many observers think that would make
sense but both sides now deny that a deal was ever on the cards. They
are digging in for a long campaign.
‘No-one should doubt our commitment,’ Bullard warns. ‘NBC is owned by
General Electric, the most successful company in the world. We have a
broad base of resource, management expertise and political acumen. We
could buy almost any company we wanted to - but the deal would have to
make sense. Why should we want to merge with EBN? It has nothing to
offer us.
If anyone thinks they can put us out of business in Europe, they have to
reckon on putting us out of business in the US first. If there are
casualties in this market, we won’t be among them.’
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