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Watch out, Money Honey - Rupert's TV Fox is prowling
Gideon Spanier, Evening Standard15 Oct 2007
Rupert Murdoch must be hoping October is his lucky month. Today he launches the Fox Business Network, his long-awaited financial TV news channel, in America. It comes exactly 11 years after he created the Fox News Channel. Then the sceptics thought Murdoch stood little chance of usurping CNN, the pioneer of 24-hour news. A decade later Fox News is number one, with its unashamedly Right-of-centre agenda, and Rupert's News Corporation is hoping to repeat the trick again with FBN. He has even got the same man in charge, Roger Ailes, who launched Fox News.
Murdoch is trying to appeal to viewers who haven't previously watched business news. So FBN will be less focused on the markets - "Wall Street meets Main Street" is the advertising pitch.
Arguably the News Corp boss faces a tougher challenge than in 1996 with not one but two well-established rivals: CNBC, owned by General Electric, and Bloomberg. Murdoch will have been wary of what happened to the last business channel that tried to bust this duopoly. His old rival, CNN, was forced to close down its offshoot, CNNfn, in 2004 after a nine-year struggle.
Many think the plight of CNNfn was part of the reason why Murdoch was so keen to pay $5 billion for Wall Street Journal publisher Dow Jones in the summer. Murdoch doesn't formally take control of Dow Jones until December but the lustre of its trusted brands such as the Journal, Barron's magazine and Financial News will give a big boost to FBN, says Alex de Groote, media analyst at Panmure Gordon.
Fox itself admits it's a tough market. "You look at the size of the audience on CNBC, Bloomberg's even smaller," said Paul Rittenberg, senior vice-president of advertising sales. "So it's, 'Why split it up even more?'" Murdoch's reasons are twofold: First, he has made a strategic bet that finance is one of the few areas of journalism that will carry a premium in the digital age when consumers expect general news to be free. He is banking on FBN and Dow Jones to give him a "win double".
Second, there is a lot of money at stake. Many mainstream news channels, including Murdoch's Sky News over here, barely turn a profit. But business TV is different. CNBC reportedly brought in $245 million in advertising last year and posted an operating profit of $335 million.
But is there room for three business channels? Murdoch may have to spend a lot to find out. He is said to have allocated $100 million for FBN's launch. Some analysts believe he may splash out $500 million before it turns a profit. FBN also faces another challenge. It will begin broadcasting to about 30 million homes, putting it not far behind Bloomberg's reach in North America.
But their rival, CNBC, can be seen in 95 million homes. So Murdoch, in a typically canny move, is charging cable distributors only about 15 cents a customer for FBN - about half the price of CNBC.
Indeed, Murdoch appears to be matching everything CNBC does, including finding a rival to its most famous anchor Maria Bartiromo, known as "the Money Honey". The News Corp. mogul quipped to investors: "We have to recruit some money honeys." True to form, FBN's presenting team will include an ex-model and a former flight attendant.
Murdoch does have one headache. Dow Jones has an exclusive deal with CNBC which allows it to use Journal reporters on-air to discuss news stories and the contract runs for five more years. Murdoch has argued Journal reporters can still appear on FBN to discuss other issues such as personal finance. Clearly he would rather there were no CNBC deal and he is expected to pay to end the contract early.
So is FBN going to succeed? Alex de Groote of Panmure Gordon is in no doubt: "Murdoch always wins."
That leaves one final question: Could FBN work in Britain? We already have CNBC and Bloomberg. "The Fox News brand hasn't played outside the US," says Adrian Monck, professor of journalism at City University and an ex-Sky executive. "You can't help but think the Wall Street Journal would be stronger internationally and have more potential as a global brand."
Food for thought for Murdoch.
