This Is CNN

Written by John Ellis on . Posted in Breaking News, Posts.



Two weeks ago, Kaplan was
"reorganized" out of his job and replaced by an opaque operating committee
of Turner Broadcasting executives. The stated reason for Kaplan’s dismissal
was that ratings were down and that most of CNN’s programming seemed devoid
of wit or edge. Off the record and on background, CNN executives blamed Kaplan
for the network’s distress. Needless to say, the truth of the matter was
much different from the spin.


This is not to say that
Kaplan’s tenure at CNN was successful. It wasn’t really. It started
badly (with the Tailwind documentary fiasco) and skidded sideways thereafter.
As in all unhappy regimes, there were "Rick people" and "anti-Rick
people" and enough hostility on both sides to make working at CNN a grind.
Kaplan’s management style did little to assuage these hostilities. Indeed,
his temper and impatience probably exacerbated them.


But the signal failure of
Kaplan’s tenure was not what he did. It was what he didn’t do. He
didn’t break the CNN culture. He didn’t attract the most talented
people in the business to work at CNN. He didn’t significantly upgrade
the quality of the programming. He didn’t gain control of all the various
moving parts of CNN (CNN International, CNN U.S., CNN/SI, CNN. com, CNNfn, etc.)
and meld them into a collaborative venture. He didn’t hook up with content
partners who would have and could have made CNN much smarter and faster. And
he didn’t spend nearly enough money advertising and marketing CNN to the
world.


Kaplan didn’t do these
things because his corporate superiors didn’t want him to and prevented
him from doing so. They protected the CNN culture. They wouldn’t pay for
the most talented people. They wouldn’t budget the money required to upgrade
programming and maintain CNN’s coverage of breaking news. They purposely
chopped up the CNN empire into fiefdoms and disallowed any one person from gaining
control of the whole. They only entered into strategic partnerships after being
acquired by Time Warner and then only with Time Warner properties (and called
it "synergy"). Two years ago, they spent exactly $1 million on marketing
and advertising. Last year, their first-ever major ad campaign cost $15 million.
But that still pales in comparison to the marketing budgets of Yahoo! or AOL.



Take them
one at a time. The CNN culture is sort of retro-Southern gothic. Most of the
people who work there have never worked anywhere else. They see themselves as
Georgians doing battle with hostile Northern forces. When they first started,
they were the Jedi against the evil New York network empires. As they came of
age, they slowly became an essential news source. The high-water mark was probably
the period from the Gulf War through the 1992 presidential campaign. At that
time, you couldn’t follow the news without CNN, because what was important
happened on their air.


But the CNN culture didn’t
change. Indeed, success made it worse. Insularity combined with self-satisfaction
to produce the worst of both worlds: arrogant stupidity. And by 1996, the competitive
set had changed dramatically. Instead of having no competition, CNN suddenly
had two ferocious competitors: Fox News Channel and MSNBC. Instead of having
no alternative media in its space, CNN suddenly had the Internet in its face.
The impact was immediate and dramatic. Ratings slid, best customers left and
all the while the CNN culture pretended that nothing had changed.


Kaplan’s hiring was
motivated in part by a hiring crisis. With more and more young talent going
to the Internet and with veteran talent now being courted by Fox News Channel
and MSNBC, the addition of Kaplan was seen as a way to attract proven talent
to the CNN team. Kaplan was a great television news producer. CNN had all the
time in the world to fill up with programming. It seemed like a good idea at
the time.


In the event, Kaplan did
hire Jeff Greenfield away from ABC News, but that was about as far as he got.
No one else signed on, in part because Kaplan couldn’t offer them better
salaries and in part because the CNN culture was so off-putting. Fox News Channel
and MSNBC had the added advantage of being based in the New York metropolitan
area, which made it easier for people who had lives here to do something new
without having to move to Atlanta. The great talent migration never occurred.


CNN was also averse to paying
for programming. The ideal CNN program was one studio, a gaggle of gasbags and
(hopefully) a hot story. It was cost-effective to the max and it worked just
fine so long as CNN was a monopoly provider and hot stories (Gulf War, OJ, plane
crashes, etc.) broke out intermittently. It ceased working when competition
arrived. CNN’s response was that the competition was "tacky"
and "only for Internet geeks." This is the dictionary definition of
"sticking your head in the sand."


Bad as the talent/investment
problem was, it paled in contrast to CNN’s ridiculous management structure.
The notion that CNN.com was a discrete entity and that it was separate and apart
from CNN "domestic" and CNN "international" and CNN "financial
news" and all the rest was beyond stupid. But there it was. Kaplan loyalists,
after a week in Atlanta, would return to dinner parties in New York and Washington
and tear their hair out when discussing the nonintegration of CNN assets. The
new management structure is arguably worse than the previous one, since another
layer of bureaucracy has been added to the mix. If CNN wants to compete in the
new environment, it will have to integrate all of the moving parts into a cohesive
whole, achieving economies of scale along the way. For now, the fiefdoms rule.
That is not Rick Kaplan’s fault.


The other major downside
to fiefdom management is that it gives upstarts the idea that they can deconstruct
parts of the CNN model without having to compete with the whole. Thus CNBC and
a host of Internet financial news sites eat CNNfn for lunch. Thus ESPN and a
host of Internet sports news sites eat CNN/SI for lunch. Thus MSNBC and FNC
and a host of Internet news sites eat away at CNN’s "domestic"
news offerings. CNN’s response has been to create more fiefdoms: CNN Airport
News, CNN Hotel News. Which would you rather do? Dial up the Internet at the
airport and do your e-mail, check your calendar, get the weather forecast and
read the news or sit morosely in some plastic chair and watch happy chatters
tell you the latest showbiz news?


To compound all these problems,
CNN spends very little money promoting itself and marketing its various product
offerings. The vast amounts of money Yahoo! and AOL and Lycos and Excite spend
promoting their latest offerings and services pays off. Yahoo! has well over
100 million unique site visits every month. AOL has 24 million subscribers.
CNN’s customer base has eroded substantially over the course of the last
10 years. It’s not likely to get better if CNN only promotes itself inside
CNN programming and CNN.com.


All is not lost, however.
It seems likely that federal regulators will approve AOL’s acquisition
of Time Warner. Once that happens, there will be new management for all Time
Warner properties. AOL might sell CNN for cash. It might try to revivify the
CNN brand. The latter seems more likely than the former, since CNN offers priceless
leverage in the political sphere.


If AOL decides to "fix"
CNN, the first thing they should do is disband the operating committee that
replaced Rick Kaplan and install a streamlined management team that understands
the reality of the new economy marketplace for news and has the authority to
break the CNN culture. Left to its own devices, CNN is on a path to becoming
a second-generation CBS News: remembered for its past glory, ignored by all
concerned.


A brief note: This is my
last column for New York Press, at least for the foreseeable future.
My consulting work no longer leaves me enough time to do this job properly.
Thank you for reading and thanks especially to Russ Smith for the opportunity
to talk to you every two weeks. I enjoyed it.


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