NEW YORK — Since November, when the Dow Jones industrial average dropped a historic 554 points, CNBC’s audience numbers have been on the rise, and now parent company NBC has big plans for its 9-year-old cabler: to double profits, bringing them to the $250 million mark by 2000.
The investment community seems to think the plan from NBC prexy Bob Wright and CNBC prexy and CEO Bill Bolster is solid.
“CNBC is a hidden gold mine for NBC,” says Prudential analyst Nicholas Heymann. “At what could be called a challenging time for NBC — having lost football and ‘Seinfeld’ — CNBC will be a big part of the steroids that keep NBC strong.”
CNBC is available in 65 million homes, putting it far ahead of CNN’s financial cable offering, CNNfn (currently in 9.5 million homes), but CNN’s 7 p.m. biz show, “MoneyLine With Lou Dobbs,” for instance, continues to pound CNBC’s “Business Center,” averaging 0.6/434,000 and 0.2/124,000 respectively (for the period Oct. 14 – Feb. 20).
Stepping out of the ratings morass, and looking at the big picture for a moment, a major part of the master plan for CNBC was announced in December: the television and Internet alliance between NBC and Dow Jones, which will increase CNBC’s global reach.
The deal is expected to trim losses for both over the long haul. Dow last year lost $48 mil on its TV efforts, including WBIS, while NBC lost and estimated $40 mil on overseas forays. It also calls for Dow’s Asian and Euro channels to be merged with CNBC channels under the CNBC umbrella, with the combined networks to be jointly owned by both companies and operated by a committee of NBC and Dow execs.
The attitude has been no gain without pain, and roughly 60% of CNBC’s 250 employees in Asia are being pinkslipped, along with 10 Dow staffers.
WSJ and CNBC honchos have been in no hurry to announce specific plans about what the new programming will actually look like, but behind the scenes, print reporters have been training for their on-camera work, and some are beginning to show up on air.
Jump on competition
Formal fanfare is expected by mid-to-late April, but plans to date include putting WSJ reporters on the air from different U.S. and international bureaus throughout the day, and NBC having “advance access” to all Dow Jones info for broadcast and Internet. Loosely translated, it means the WSJ will tip off CNBC about its morning stories to give the cabler a jump on the competition.
CNBC knows it can’t hold the same high-end crowd it has during the day into the evening — “those people just don’t watch a lot of TV at night” — but, with a mix of political and legal talkers, and the occasional movie thrown in, primetime has seen growth.
With the new weekend ‘high-profile” series, and a piece of the upcoming NBC Olympics pie, CNBC hopes to get a little of the young professional male demo as well.
Above all else right now, though, Bolster will tell you that inhouse development and ownership of intellectual property is tantamount to the cabler.
“The idea here is that unlike some of the other networks having to pay huge licensing fees for sports and entertainment, we’re sort of building our own studio and making our own content.
“We’re not renting. We’re owning,” Bolster beamed.
Advertisers also seem to be buying the CNBC buzz. Since November, Deloitte & Touche, GTE, British Airways — and Dow Jones — have been among the crop of new buyers of CNBC time.
With profits for 1997 in $120 million range, CNBC is certainly not the most profitable cable net on the block. But as Bolster said, “We might be positioned to be just that.”