On paper, it seemed like the switch from Financial News Network to the Consumer News and Broadcast Channel was a great move for cable operators.
CNBC, a 24-hour-a-day service which debuted nationwide April 17, was, as its name implies, the product of no less a TV powerhouse than NBC. It featured seasoned hosts such as Dick Cavett, a huge bankroll--reportedly $65 million--to see it through a building period and the kind of market research projections that programmers dreams about.
Unlike FNN, an 8-year-old service specializing in hard-core stock market and commodities coverage, CNBC was created to appeal to the everyday consumer seeking guidance in making major purchases as well as dabbling in the sport of the 1980s--investments.
"They had surveys and research, done by an independent researcher, that showed that even the viewers who watched FNN regularly would prefer CNBC," said Tom Belcher, general manager of West Valley Cablevision, a system serving 75,000 homes in the San Fernando Valley.
The researchers, however, never spoke to Geri Pearlman. All the demographic studies and the graphs and charts meant nothing to her on that morning that West Valley Cablevision switched, unannounced, to CNBC. She let them know, loudly and often, that she wanted her FNN.
"I'm just a homemaker," said Pearlman, who lives with her husband in West Hills, "but when I turned on the TV that morning and my FNN was gone, I got hysterical. . . . It turned me from a couch potato who used to watch the markets with my poodle in my lap, into a wild-eyed activist."
Officials at West Valley Cablevision said their decision to switch from FNN to CNBC was made neither to save money nor because the company had any vested interests in the new service. "If fact, we had to pay CNBC twice as much, per subscriber, than we had to pay FNN," Belcher said. Cablevision officials would not disclose figures, but according to FNN President David Meister, his service charges cable operators 3 1/2 cents per subscriber while CNBC charges 7 cents.
Belcher said that rumors about West Valley Cablevision owning a piece of CNBC arose because of a confusion over names. There is a system also called Cablevision on Long Island, N.Y., that has a vested interest in CNBC, but it has no connection to Cablevision Industries, the industry giant that has about 950,000 subscribers nationwide on 85 different systems, including West Valley Cablevision.
"We were very impressed with what we saw of CNBC before they launched," said David Testa, a Cablevision Industries vice president, speaking from the home office in Liberty, N.Y. "That was the sole reason we wanted it. It's a very good service and we think it will have broad appeal for our subscribers."
Locally, Belcher said he believed CNBC would garner a lot of attention and help attract new subscribers in the West Valley, where the system has signed up just over 40% of the potential customers in its area.
It turned out to be the old subscribers they had to worry about. On CNBC's launch day, all the Cablevision Industries systems made the switch without warning to their customers. "We usually announce any change at least 30 days in advance," Belcher said, "but we were afraid if we disclosed our plans FNN might quit us right away and our subscribers would be left without a cable financial channel until CNBC started up."
Pearlman, the faithful FNN watcher, reacted immediately. "I started calling everyone I could think of," she said. One of the people she reached was Belcher. "The calls started coming in that very first day," he said, shaking his head and smiling. "Lots of calls."
FNN, with headquarters in Los Angeles and New York, had built up a great deal of loyalty in its eight years of coverage centering on stock exchanges and other money markets. According to Pearlman, one stock trader in the West Valley felt the service was so crucial to his livelihood that he bought a satellite dish to pull in FNN.
The protest was not confined to money market professionals, however. "I can't say I really play the market," Pearlman said, "but my husband has some retirement income that we worry about and we have the ability to move it around. We based a lot of our decisions on the things I would hear about on FNN."
Indeed, Pearlman, who leaves FNN on during the day even when she is just puttering around the house, said she made one of her most crucial financial decisions of her life based on what she heard on the channel.
"You know the market crash on October 19, 1987, on a Monday?," she asked. "Well, on the Friday before that I was watching the ticker on FNN and listening to the things the people on the station and the guests talked about. It wasn't anything they said directly, but I just got a feeling. I pulled my money out of the stock market, all of it.
"When the market crashed on Monday we were out."