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the rise and fall of CNN
Co-founder: Blame Ted for resisting innovation
By Kevin Downey
Reese Schonfeld is an old-time New York news guy who started out working for the news wires and ended up co-founding CNN and Headline News with Ted Turner in 1979. He was president and chief executive officer of CNN until 1982, when Turner decided to run the first 24-hour news networks himself. Schonfeld went on to start News 12, the first 24-hour local news network, and helped create The Food Network, where he served as president and CEO. He recounts his career, the creation of CNN, and its subsequent troubles in his book, “Me and Ted Against the World: The Unauthorized Story of the Founding of CNN.” Schonfeld is still passionate about the news and believes CNN can still be innovative and regain an audience.
Why did you think that a 24-hour cable news network could work? And when did you first realize that CNN would be a success?
Because I came from a wire service background and saw the flow of news
over the wires. I saw that you could do 24-hour news if you picked up
pictures. I never thought there would be a shortage of information with
sports, business, and all those things. Look at a
newspaper and try reading it out loud. It would take hours.
I was sure it
would work well. When did I know
CNN would work? The first day.
I
was thinking about calling Vernon Jordan to thank him for getting shot the
weekend before we got started. We got started on a Sunday and held off
until 6:00 p.m. That day then-President Carter was in a hospital with
Vernon Jordan, who was shot the night before. I knew that we had made it.
I learned
just two months ago that in 1980 Rupert Murdoch wanted to buy CNN from Ted
Turner. They knew it would work. And as far back as early 1982, I knew
that CBS and NBC offered to buy it. So there was no question that it would
work. Once we got it up and kept it running for a few months, people knew
it would work.
CNN’s ratings troubles have been covered in the press for years. But is it possible for news networks to get sizable ratings outside of events like the Gulf War and the O.J. Simpson trial?
People have an insatiable
need to know. It’s a great human characteristic. If you can advance the
news with things that they don’t know, they’ll stick with you.
We had a 1 rating for the
last six months I was there, so I know there is at least a 1.0 or maybe a 2.0
rating.
By May 1996, CNN was down
to a 0.4. Between the three [major networks] that exist, they can get a
2.0.
NY1 had a 1.5 rating in New York City in the first nine months last year,
CNBC had a 0.6, CNN had a 0.3, MSNBC and Fox had 0.1s and Headline News
had no discernible ratings. You’re talking 2.6 ratings points in the five
boroughs.
That’s not a lot of
people. You have seven million people in New York and two percent are watching,
so you have about 140,000 viewers. But that’s a respectable circulation.
Figuring that NY1 probably cumes 40 or 50 percent over the week, that’s
larger than the New York Times. If you include that, you can get a 3.0
rating.
Is CNN’s ratings problem simply a matter of too much competition? It seems that the concept of CNN sparked so much competition with other cable news networks and possibly better network news that they could not have sustained their audience.
CNN brought in all these
competitors. Nickelodeon has the same problem. It has all sorts
of competition with Cartoon Network, Disney Channel, Fox Family and a few
others. But in the same period that CNN lost 60-70 percent of its ratings,
Nickelodeon doubled theirs. They evolved but CNN has stuck with what they’ve
been doing since the beginning.
Local has always been CNN’s
weakness and local always out-rates national news. The local news loses
ratings when they go into national news.
An old story is when
Westinghouse was the first to make all-news radio successful. Successful
is weather and traffic. Primetime is 6:00-9:00 a.m. In New York, NY1
out-rates every other broadcast except ‘Today’ in the morning because
they give people what they want. They’ve got weather and traffic while
the others go to soft news.
Can CNN revive itself under AOL Time Warner and seemingly without the vision of Ted Turner? Can it be innovative enough to bring back viewers?
CNN has not been
innovative for the past 18 years. One of their problems is, when the news
networks began hiring from CNN, CNN hired from the networks.
I find it hard to think
of any major innovation that CNN has brought in, in the past 15 years.
Baghdad was a great accomplishment but that was using technology in an
exciting situation.
In the beginning we talked to the press and they
asked if we would not end up covering a lot of fires. And I answered that
we would cover fires until they burned out.
Baghdad was like the
Chicago fire. All three or four networks were airing live at the beginning [of
the Gulf War.] CNN brought in a direct link to Amman and was not cut off
like the networks. It was so great because they had voices over the
bombing. There were no pictures of the bombs, it was talk radio. It was a
great feat but it was not a breakthrough.
AOL Time Warner will be
eager to bring in innovation. Ted likes CNN the way it is and he doesn’t
want any changes. I brought in “Crossfire” and he didn’t like that
show. I’ve heard that unless an idea comes from Ted, he does not like
it.
At AOL Time Warner,
[co-COO, Bob] Pittman is innovative and [Turner Broadcasting division
chairman and CEO] Jamie Kellner will be terrific for the company.
I worked
on a series for Orion, and people there thought he was the best boss they
ever had. He proved how good he was because the people who worked for him
went on to head their companies. That’s [CNN’s] hope, and it may be
that Kellner will bring back innovation.
How significant was the loss of Lou Dobbs from CNNfn and Moneyline in 1999 and how much of a loss is Stuart Varney, who recently left?
The loss of Dobbs clearly
had an impact. They lost about one-third of their audience. He says
that was worth about $50 million a year and he’s probably right. The
loss from a viewer point of view was very bad and it showed the public the
infighting that was going on at CNN. That’s not to say that Dobbs was
easy to live with. But he knew what he was doing.
It’s an old story that
you can’t replace someone with nobody. They brought Stuart Varney back
and he did okay. What I’ve heard about Dobbs is that he is linked to NBC
for CNBC, and he may end up heading up the whole company.
What do the news networks, in general, need to do to be relevant? How well are they covering the problems on Wall Street, and does that represent a story that can help them gain ground?
I think the stock market
slump is a great story where there can be a lot of innovative reporting.
If you have good business reporters who know this business, you can make a
name for yourself right now that can carry you for years.
If I were running CNN, I’d
have a contract with Bill Clinton right now and replace Larry King.
There are all sorts of
stories, like HMOs, which are a topic of conversation at least once a
month in every family. If there is that much anger and conversation about
a topic, you can build a show around that and possibly make a difference.
The internet is pretty good for covering breaking news but do you think it will ever be viable as a news medium that holds viewers for a long period of time?
Not now, but in the end
it will be where you can get viewers for 30 minutes when they can get full
streaming video on their computers. There’s no reason they cannot get
viewers watching the news for a half hour.
We’re launching a
broadband streaming video, not including news, right now. We’re cutting
our pieces into four to six minutes, not half-hours.
The news is often not
very interesting. You have to make it seem that if they turn it off they
will miss the greatest news story ever. But that’s definitely not
happening now.
-Kevin Downey is a staff writer for Media Life.
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