Friday, August 29, 2014

CNN: Living Proof That Market Dominance Does Not Necessarily Last

People under 30 probably have no direct memory of it, but at one point, CNN equaled news.  And if you did not believe that, Darth Vader told you so.  This week, however, layoffs and "managerial changes" are convulsing the network.

When movies wanted to include realistic news references in the early 1990s, they cited CNN.  They were everywhere and showed everything.  Why wait for Dan Rather and Tom Brokaw's updates at the top of the hour or their full broadcast at 6:30?  You could see it now on CNN.

The era of CNN's ownership of modern news came only a little over a decade after the retirement of CBS' Walter Cronkite.  It also came in most major newspapers' most profitable years.

What happened?

Part of the problem emerged in the 1990s when a personal friend of President Bill Clinton's was chosen to lead CNN.  Regardless of the resulting coverage, this created at least the perception, if not the outcome, of a conflict of interest. 

A real or perceived liberal bias opened the market for competition.  This included the conservative leaning Fox News and (at the time) the even more conservative MSNBC.

Does anyone remember when MSNBC featured Ann Coulter, Laura Ingraham, and Tucker Carlson?

Viewers latched onto Fox News, which eventually became the leading cable television news outlet.  Others turned away from television (and tangible newspapers) altogether and started using the internet as a primary news source.

CNN struggled to adapt while trying to maintain their image as the "real" news source.  A 2012 Pew survey praised CNN for keeping 55 percent of its broadcast focused on news (as opposed to 45 percent for Fox News and less than 10 percent for MSNBC.) 

Recent hires should have helped.  Jake Tapper headlines one of CNN's premiere spots.  He is one of the few media figures respected from all ideological points of view.

Problems, however, continued. Reports of extravagant overspending in times of declining ratings dog the news of layoffs.  And these layoffs and early retirements affect many of CNN's most senior, most experienced, and core personnel.

Whatever the problems are, clearly CNN has still not discovered the solution to its viewership and profitability woes in this competitive media age.  The network built its reputation and market dominance in an era of no competition. Only figuring out a way to regain competitive advantage can bring it back towards what it once was.

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