Notes from 2010 Media Summit: Interview with Jonathan Klein, President, CNN/US

The 2010 Media Summit opened on March 10, 2010 at the McGraw-Hill Building in Manhattan. My notes are below, with the caveats that they are my best rendition of the discussion, with no claim to accuracy; much of the discussion has been paraphrased, rather than being a direct quote of the participants; and I bring my own viewpoint and perspective to this discussion, which influences my perception of the discussion.

Introductory remarks were from Paul Bascobart, the president of Bloomberg BusinessWeek. He started out by saying that this was a particularly interesting year to review business models [Note: aren’t they all lately, and for the foreseeable future as well?] and predicted that the Summit’s sessions would include some “old-fashioned Italian fistfights.” He pointed out, as everyone in the audience presumably knew, that last year’s summit had been held in the midst of the financial crisis. The stock and ad markets were down, and iconic media brands were going out of business.

It was now three months since the acquisition of BusinessWeek magazine by Bloomberg. He proclaimed that they are on the cusp of the relaunch of an exciting new magazine. He said that it was going against the trends of the magazine business – there would be more stories with increased frequency of publication on thicker paper, an integrated newsroom with 2300 reporters, and on April 23, a new.businesweek.com.

He then introduced Josh Tyrangiel, who had joined Bloomberg BusinessWeek as Editor in November from Time, where he had been deputy managing editor at Time magazine and managing editor at Time.com. Josh (T) was to interview Jonathan Klein (K), the president of CNN/US since 2005 as the first event of the Summit.

T offered up a self-proclaimed softball question regarding the speed of change of the cable news business model. Is it feasible to have a non-partisan 24-hour cable news network?

K responded by pointing out that CNN had its most profitable year ever in 2009, concluding six years of double-digit growth. He attributed some of that growth to having about 20 different properties, including international, headline, online, airport, and a dozen or more countries. As for the benefits of this far-flung organization, he said that some of the first reporting on the Chile earthquake had been from CNN Chile.

T: Where’s the growth?

K: Online and mobile have enormous growth potential. The U.S. cable network is a growth area, since it has two fully-distributed networks – CNN & HLN.

T: There are very few independent media companies. What is an example of synergy from being part of Time Warner?

K: Synergy is driven by people. Some of CNN’s best joint efforts have been with HBO, for example, sharing talent, as with Fareed Zakaria on the Mumbai massacres. These efforts are driven by CNN’s relationship with HBO senior executives and can’t be simply mandated by Time Warner senior management. CNN Money is a successful joint effort with Time Inc.

T: Are these relationships a priority driven through the organization?

K: The business lunch should not be under-estimated. These relationships are best created in a non-pressured environment without reference to specific projects.

CNN also has 1000 affiliates, where they are fostering a climate of cooperation. CNN doubled its profit over the last 4 years due to working together with those affiliates. A premium is placed by Jim Walton, head of CNN Worldwide, to create such collaboration.

T: Does CNN employ people as access points between divisions?

K: CNN hadn’t done so previously. Now, however, CNN doing more in online video. There are two people pushing content from CNN into CNN.com, content that is not necessarily suited for TV.

T: CNN benefits from having two sources of revenue – subscribers and advertising. What about competitors who only have one stream?

K: Everyone in media is looking for multiple revenue streams. The model was created by Ted Turner and fostered by Phil Kent, head of Turner Broadcasting.

CNN is in the happy position of being indispensable at times, not always. That has
created a brand association desired by advertisers as well as cable & satellite providers.
CNN therefore has a focus on over-delivering in those situations because there are few
indispensable global brands.

T: With regard to competition, 24-hour cable news is like an umbrella. One can make a great umbrella or simply tell people it’s always raining. CNN ranks only 3rd in the 25-54 demographic, despite its profit in 2009. Is it a flaw to stick with quality?

K: Ratings are only one metric. CNN doesn’t sell any one show or daypart. Instead, it sells the overall reach of the network. The ways it gets ratings are more important than the ratings themselves. It over-delivers on real journalism.

As a result, CNN is number one in cumulative audience – the total number of people watching. In February 2010, CNN US had 100 million viewers, Fox had 91 million. Fox viewers stay longer, so that boosts their ratings. Also, ratings don’t count out-of-home, online, and mobile, further handicapping CNN.

T: Does it bother you to be in 3rd?

K: CNN thinks of itself as being in 1st place with more and higher quality viewers. It is number 1 in digital, both web and mobile, it is the #1 recognized name in international. Competitors, however, try to define cable news as primetime.

The real competition for CNN is actually social networking, especially at night, a phenomenon that has shifted from daytime as being primetime for the web. People on Facebook and Twitter are also sources of news. He wants CNN to be the most trusted source [Note: any recent studies seem to indicate that social networks are losing some credibility as sources of information. He is more worried about Facebook than about Fox.

T: Does he have a social media director?

K: CNN has a social media group, which is not segregated out as separate function. Instead, social media is integrated into everything.

He likened CNN’s move into social networking to the controversy he created as the first person at CBS News to put his email address on his business card. He feels that CNN similarly needs to be accessible and be part of the conversation. People crave information. Because it is easier to get, it creates its own demand. If CNN can solve the complexity, it can make information easier to access.

At the same time, he needs to keep an eye on expenses and quality/

T: What do people want on social networks?

K: People are looking for reliability – is the information true? They will spread nuggets of truth to their friends. Truth is the essential function among social networks. He doesn’t want to cloud CNN’s reliability with suspect partisanship. CNN is the number 1 source in digital due to its reliability.

CNN is the most dependable source of news.

T: Klein says that CNN is non-partisan. The Pew Research Foundation says that CNN’s audience skews Democratic while Fox skews Republican.

K: When you get a large audience, you get all kinds. [Note: this was a particularly non-responsive answer. T was asking about composition, not size, of the audience. Since this issue arises often with regard to CNN and Fox, Klein’s failure to have a more responsive, even if stock, answer, contributed to the sense that much of the discussion was based on the “party line.”]

Profitable businesses can be built around niches. CNN’s niche is people who crave reliable information about world. That niche is underserved due to the proliferation of partisan sources of information. Competitors get fringe audiences, and CNN gets the vast audience who wants dependable news.

T: What is the future of America if sources of news harden along ideological lines?

K: Changes prevent such hardening. Five years ago, there was no Facebook or Twitter. The constant is that people will want reliable sources of information, despite the growth of long tail interests. There needs to be at least some source seen as a non-partisan and straightforward source of information.

CNN has gained 50% more viewers than in the mid-1990s even with more competition. Competition forces you to be better as the audiences demand improvement. Then, the audience spreads the word about what’s good, as with the movie Paranormal Activity. He acknowledged that CNN had gotten criticism about its Iran election protest coverage and asserted that it had improved as a result.

T: CNN has to transition from being a logistics organization to being a reporting organization.

K: In the past, if there was no competition, just getting there to report the news is sufficient. CNN also benefited by airing news when no one else did.

Now, other news organizations can also provide the effect of being there. Depth of analysis is harder since more brainpower and creativity is required. That’s why they put Fareed Zakaria on the air. He would not have had a place on cable news 10 years ago since he’s not just about being there. Similarly, the rise of Ali Velshi is based on providing synthesis of information.

T: Isn’t synthesis similar to opinion?

K: There is a difference between someone who’s actually been somewhere vs. sitting in a cloistered environment and throwing bombs.

Many opinion leaders are informed but do not have the additional credibility of actual experience.

CNN anchors don’t advocate policy. Guests will advocate. He acknowledged that CNN is not perfect.

The best journalistic organizations rarely miss a step, citing 60 Minutes, the Wall St. Journal and Vanity Fair. They provide consistent, in-depth reporting and analysis.

T: Is such journalism possible?

K: The WSJ does it every day. CNN cancelled Crossfire because it had degenerated into mud-throwing. Anything that is around too long eventually becomes a caricature of itself, a circus [Note: Quite a generalization. What about 60 Minutes?]. The creation of the Situation Room program as an island of intelligent discussion resulted from CNN’s assessment of Crossfire.

T: What about stories regarding the balloon boy?

K: CNN always has to cover breaking news. After all, if the boy had been in the balloon, it would have been a disservice to not have covered the story. On the other hand, CNN moves off of a story when it veers into a speculative mode.

While CNN’s coverage included having the parents of balloon boy on Larry King with Wolf Blitzer that night, there was also no other major story competing for CNN’s attention.

In CNN’s defense, it dropped the story in general afterwards even though not everyone else did. Generally, cable news takes a story and speculates about it endlessly.

His experience from launching and running the FeedRoom is that Day 2 of almost any story drops off sharply with regard to audience interest. He is trying to bring that learning to cable news, that the audience tires of a story before the cable news networks do.

As an example, the Congressman Massa story is viewed as generally dead; the audience is already over it. Of course, an errant producer may cover the story anyway.

CNN’s tries to avoid speculative stories. Regarding Tiger Woods, CNN covered the automobile crash. “Once you get the picture, dial back.” CNN purposely did not get into the speculative phase with psychologists, sex addiction counselor, mistresses, etc. CNN tries not to feed that angle. It may be legitimate for other news outlets. CNN would interview Tiger Woods but not anyone who has anything to say about Tiger Woods.

TL: What is more important: good producers or good on-air talent?

K: Both. Producers tend to be deferential to talent. The key is having talent who understands news and producers who can help them achieve the desired quality. Examples include Jeff Zucker and Katie Couric at the Today Show. That symbiosis is why CNN hired Tom Bettag for Candy Crowley. At the same time, he wants viewers to have fun – he doesn’t want CNN to become CSPAN.

Too many producers and talent have been corrupted by the direction the business has gone toward less intelligent discussion and more fireworks. It was exciting when it started, but now everyone does it. There is an oversaturation of the meaningless and trivial. CNN has to deliver something more substantive and serious. By delivering that, CNN will build its audience as it did in 2009.

T: how’s the relationship between CNN and the White House?

K: It’s the way it was before. Some reporters [Note: presumably not at CNN] expected a golden age in White House – journalist relations. CNN pointed out to the news community that the White House is populated by hard-bitten politicians who will use journalists to accomplish their own ends.

Strangely, the White House is fixated on traditional journalistic outlets such mainstream broadcast, e.g. Sunday morning shows. The White House reverted to an old-fashioned media approach despite having won the presidency based on its facility with new media.

The White House mishandled its approach to Fox Networks by criticizing Fox but not attacking MSNBC, which supported them. It didn’t seem statesmanlike.

People are skeptical of authority, and reporters are supposed to do the same – hold the powerful accountable. For that reason, the Millenial generation and other like-minded skeptical audiences should love CNN.

T: How was CNN on the coverage of the financial crisis?

K: Ali Velshi is good at explaining the terminology. CNN could have done more on the issue of accountability for the crisis. The public is not clear on whose fault this is: Why did this happen? Who should we be angry at? CNN, however, doesn’t want to simply fan the flames to public resentment. It doesn’t want to just tap into public anger; it has to enlighten the audience.

TL: Do journalists understand the root causes of the financial crisis? Is that journalists don’t get it or that they can’t explain it?

K: Perhaps no one understands the root causes. The news media should at least set out theories about the causes and dissect and explain them in an intelligent way.

T: At the time of the crisis, should CNN have educated everyone?

K: CNN did launch summits to leverage the assets of Fortune and Money magazines. It had primetime discussions about the economy. But there needs to be significant frequency of programming before people realize you’re even making these sorts of efforts. Therefore, CNN’s new approach is in trying to do fewer things better, e.g., its new show with Ali Velshi.

T: Is there a ceiling on the ability of TV to explain complexity?

K: New technology allows more detailed explanations, such as John King’s electronic board during the 2008 election.

CNN did a study about consumer viewing habits. Consumers were asked about their favorite shows and how often they were viewed. On average, 15% of the episodes of their favorite shows were watched. The Sopranos has the highest score – 36.7% of the episodes were viewed

Therefore, networks have to be consistent due to lack of viewer frequency, and NPR is an example of a consistent news provider.

T: Was Lou Dobbs over the line with his commentaries on public policy?

K: CNN concluded that this is not what it wants to be about. It should let others engage in opinion to that extent.

Lou understood the difference of opinion with his approach. He wants to pursue advocacy journalism so he and CNN parted ways.

T: How does he feel about the depth of competition?

K: Fox fostered a culture of an Alamo-like environment: us against the world. CNN is more focused on all of the things that are changing in the competition for eyeballs. It prefers to engage in competition for quality of journalism, and on that score, feels that it is like the way the Yankees viewed the competition during their years of dominance.

T: What news asset do you most covet?

K: 60 minutes, due to its consistency over time. Executive Producer Jeff Fager updated a classic and took it up in quality, so he watches it all the time.

T: Would CNN do a magazine show?

K: Audiences may not want that format anymore. The preparation time can put you out of sync with the news cycle, even thought CNN does not want to just tell you what happened today.

In 2 years, there has been a 30% increase in the number of people getting their news digitally. To meet that growing demand, CNN will definitely provide additional news formats, such as investigative, long-form and documentaries.

T: Will there be a loss if evening network news shows go away?

K: No. We can’t cling to the forms and formats of the past. We have to question everything. CNN could decide to stay the course or evolve. It shouldn’t be like the ad agency depicted on MadMen, oblivious to the changes that are coming.

There would be no loss because there are so many sources of information. More sources mean that serious journalism is easier to do than before. Of course, journalists may not make the same amount of money as before. He doesn’t know anyone who gets into and stays in journalism for the money - it’s an obsession, not a profession.