NEW YORK (Reuters) - Here’s a novel idea: Fox Business Network should focus on covering business news.
At least that’s what Kevin Magee, executive vice president of the News Corp-owned cable news network, is urging his staff to do.
Unhappy with Fox Business’ focus on politics, Magee fired off a memo to employees reminding them that the network was not created to be a light version of its sister Fox News Channel.
“I’ve been asked to remind you all again that they are separate channels and the more we make FBN look like FNC the more of a disservice we do to ourselves,” Magee said in the memo dated Oct. 5, carrying the subject line “Fox News and Fox Business.”
“I understand the temptation to imitate our sibling network in hopes of imitating its success, but we cannot,” Magee went on to say in the memo. “If we give the audience a choice between FNC and the almost-FNC, they will choose FNC every time. Earnings, taxes, jobs etc give us PLENTY to chew on.”
Fox Business, which was launched in October 2007 with $100 million in initial capital, sought to take Wall Street to Main Street by covering business stories for ordinary people -- seeing a market as CNBC and Bloomberg Television cater primarily to financial professionals.
But four years on, Fox Business Network’s ratings remain far behind those of CNBC -- a disappointing performance in comparison with Fox News, which in four years rose to top then-market leader CNN and has reigned ever since.
In an interview with Reuters on Monday, Magee confirmed sending the memo and said that heading into the U.S. presidential election next year it was worth restating the importance of Fox Business finding its own voice and audience.
“There is always going to be overlap between economics and politics, but we need to maintain two separate services,” Magee said. “We can cover the political angle, but our focus should be on our charter of gaining and producing wealth.”
Magee said he decided to send the memo after a conversation with Roger Ailes, chairman and CEO of Fox News Channel and chairman of the Fox television stations group. Ailes ran CNBC until 1996.
The launch of Fox Business Network was part of News Corp chief Rupert Murdoch’s plan to dominate coverage of global business news, following the acquisition of Dow Jones & Co Inc, publisher of the Wall Street Journal.
Murdoch at the time said he was considering launching versions of the network in other countries and planned to invest $300 million over the next three years, by which time FBN would overtake CNBC in ratings.
The first part of Murdoch’s goal has been achieved, with versions of Fox Business available in Japan and Italy. But so far the network has been unable to seriously challenge, much less eclipse, CNBC in the ratings.
“Rupert wants a competing news network to CNBC, not another Fox News,” said a person familiar with the matter who spoke on condition of anonymity. “Right now it’s obvious they don’t cover enough financial news.”
According to ratings agency Nielsen, which only began measuring the network’s daily audience in March, Fox Business averages 76,000 viewers from 6:00 a.m. to 4:30 p.m. during the week. From 4:30 p.m. to 8:00 p.m., its audience grows to 85,000 before falling back to 56,000 during the prime-time hours of 8:00 p.m. to 11:00 p.m.
By comparison, CNBC averages 263,000 viewers from 6:00 a.m. to 6:00 p.m. and 206,000 viewers in prime-time during the week. Nielsen said the audience for Bloomberg Television is too small to meet its minimum reporting threshold.
“There were huge expectations that Fox Business would eclipse CNBC in the ratings that thus far have not come to fruition,” said Brad Adgate, senior vice president for research at Horizon Media.
On News Corp’s quarterly earnings call in August, Murdoch said Fox Business now breaks even on a cash flow basis, which meant that while it does not make any money it is no longer losing any either. He also noted that there have been times when Fox Business has beat CNBC head-to-head in the ratings.
Magee said that ratings fluctuate because business news is seasonal and often event-driven, with higher viewership during earnings or the debt ceiling negotiations, for instance.
Overall, he said he was very pleased with Fox Business’ ratings growth, noting that the network’s audience is up nearly 40 percent year-over-year.
Fox Business’ audience could also benefit from gaining access to Wall Street Journal journalists, who have been under an exclusive contract with CNBC that expires next year.
Part of the reason Murdoch wants Fox Business to focus on financial news is because he believes it will help widen distribution of the network, according to the source.
Fox Business is available in about 58 million homes, compared with the more than 90 million homes that CNBC reaches. In theory, more carriage should equal higher ratings and more advertising dollars.
Magee said Fox Business is currently negotiating more carriage deals and that gaining additional distribution is a bonus to focusing coverage on financial news and away from politics but that the main goal is to gain audience share.
When Fox Business does score in the ratings, it has usually been because of its political rather than financial coverage.
At the height of stock market uncertainty over the debt ceiling talks in Washington in August, for example, Fox Business increased its daytime audience 256 percent to 128,000 viewers at one point, according to the Los Angeles Times.
“It has been tough for Fox Business to make inroads because business news is well represented by other networks,” said Adgate. “They have struggled to distinguish themselves as a brand and create a destination network in part because it is relying too much on the Fox News model.”
Reporting by Peter Lauria; Editing by Tiffany Wu and Steve Orlofsky