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DECISION 2000 / AMERICA WAITS

News Networks Seeing Windfall

Ad revenue: Even with the greater overhead, outlets are posting profits as election drama plays on. Operations hope to walk away with long-term rating gains.

November 25, 2000|ELIZABETH JENSEN | TIMES STAFF WRITER

NEW YORK — The ongoing election drama is providing at best a modest financial windfall for television news operations, which are setting their sights on achieving long-term rating gains--and thus increased revenue--from heightened twists and turns in the plot to pick the next U.S. president.

All-news cable networks in particular could benefit from higher viewership in the aftermath of the election story. Dominant CNN and relative newcomer Fox News Channel say they already have picked up about $1 million in extra advertising revenue since election night because of improved ratings.

Movie companies, in particular, have jumped on the limited ad time available, said Robert Romano, a spokesman for CNN parent Turner Broadcasting. Fox says it also has seen interest from pharmaceutical companies and financial services firms. MSNBC declined to comment for this story.

Viewership is running substantially higher at CNN since election night. The news network's average number of viewers recently has been around 923,000, about triple the number it was drawing in the third quarter of the year; Fox's increase has been averaging slightly more than that and MSNBC's slightly less.

The broadcast networks' evening newscasts and morning news programs also have posted sizable rating gains. NBC's "Today" show, for example, claimed to have registered the highest viewership in the history of morning television for the week of the election, Nov. 6-10, with a daily average of 8.4 million viewers.

Still, the ability of these television news outlets, including the news divisions of the broadcast networks, to reap a huge financial windfall is limited because much of their advertising time is sold in advance. "You can't go back and re-price," said Paul Rittenberg, senior vice president of advertising sales for Fox News Channel.

Fox, for example, had less than 15% of its inventory of ad time remaining, some of which normally would have been held back to give to advertisers if ratings fell short. Instead, with ratings up, much of that time can be sold, leaving the network virtually sold out, Rittenberg said.

In addition, some of the increased revenue already is being squandered on heightened production costs to cover the ongoing story in Florida, where few correspondents are regularly stationed. So far, the broadcast networks are estimated to have spent an additional $1 million to $2 million each for everything from overtime and reassigned crews to keeping broadcast studios "hot," or ready to go with a news flash on a moment's notice, a frequent occurrence in the last couple of weeks.

The networks also have had to compensate some advertisers for preempting shows, such as the daytime soaps, for news reports. Additional costs are "something in the seven figures," said ABC News President David Westin, although he noted that some of that money was likely already set aside for such a contingency.

Incremental expenses have been less pronounced for the 24-hour cable networks. Fox says it has spent relatively little more than it had already budgeted to cover the transition between administrations.

"We have had a little bit of luck," said Marty Ryan, executive producer of election coverage. "We had planned to deploy about the same number of people in Nashville or Austin [Texas] for the transition, so our transition is in Tallahassee [Fla.]."

The clearest beneficiaries, according to news executives, have been the advertisers who got many more viewers seeing their ads than they had bargained for. Recent demand among advertisers for news time generally has been soft, executives say.

Real gains for the news networks, meanwhile, may end up being reaped long-term. Fox's Rittenberg says he already has raised first-quarter 2001 advertising rates because he expects many viewers to stick with the news programming after the current election story subsides.

"You never slide back to the prior plateau," he said, noting that, once the presidential impeachment saga ended, Fox's ratings were 50% higher than before the story broke. And the postelection audience has been younger, he noted, which appeals to advertisers. "Everybody is watching, not just news junkies."

The television news outlets also are using the story to push their Internet sites, even through gimmicks such as CNN's constant on-air offer for viewers to sign up for a "president-elect" e-mail alert once there is a final decision on who will be the next president.

The preelection record viewership for http://www.abcnews.com had been Sept. 11, 1998--the day special prosecutor Kenneth W. Starr released his report to Congress, which brought 11 million page views, Westin said. By contrast, election night drew about 27 million site hits, he said, and Web site usage continues to run at almost double the normal daily usage of 4 million to 5 million hits.

Other news and information outlets, from newspapers to radio programs such as Rush Limbaugh's nationally syndicated talk show, also have cited record traffic for their Web sites since election day. Through last week, for example, visits to the Los Angeles Times' Web site, http://www.latimes.com, were running about 30% higher than usual levels, according to site editor Richard Core.

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