October 28, 2004


CNN is finally pulling the plug on its financial network. Are there any lessons to be learned from its demise?

1. If you are going to start a copycat cable network, make sure that either you offer different or superior content, or offer an obviously different point-of-view about the same content. CNBC owned the financial news franchise and CNNfn followed wanly, with absolutely no advantages over CNBC. We can argue about whether Fox News is fair and balanced, or can compare with CNN's news operation, but Fox News is nothing if not lively, essentially a video version of talk radio. It's easy to understand why Fox News pulls in more viewers than CNN. But can anyone tell me how WE (Women's Entertainment Network) is different from Lifetime, which occupied the women's entertainment space first?

2. Amortizing the cost of inventory is not sufficient reason to launch a cable network. When the cable spectrum exploded and all of a sudden consumers found their cable box LCD went up to 999, many of the major cable networks were worried they'd lose their share of real estate. Sure, HBO has a huge inventory of movies to exploit. But does anyone ever say: "Gee, I'm kind of hip -- I think I'll check out HBO-Z because it's edgy?" The cable networks that have spawned faceless channels have yet to create an audience. Maybe they would garner higher ratings if they figured out what viewers wanted to watch instead of determining what they can unload from their unused inventory.