A detailed analysis of CNN, including its history, corporate culture, strategies, competition, finances, and plans for the future.

1. 1
Christina Kohler
Re: CNN/Time Warner Inc.
Date: April 1, 2016
A Look into Cable News Network and Time Warner
Introduction
The news media industry is changing at a fast rate, as large sectors of news network
audiences are shifting viewing habits to digital content. Now is the perfect time for media
companies and networks to change their strategies in order to accommodate the changing
industry. Audiences viewing habits, new technologies, and the increased competition in the
industry have created an opportunity for cable networks to strategically change for the better.
Consequently, instead of letting the changing media environment hinder their business,
companies can find new areas for revenue. One cable network in particular, CNN, has been
recently implementing new methods for growth in the industry. Whether they are truly successful
or not is a question many are asking.
History of the Cable Industry: CNN and Time Warner
According to Encyclopedia of Communication and Information, cable television provides
“video services” to “approximately two-thirds of all television households in the United States”
(Schement, 2002, p. 91). CNN is a national program supplier, and as such charges local cable
operators “fees based on the number of subscribers to the system” (Schement, 2002, p. 92). The
fees are paid to a program supplier, which gives consent to carry their programming.
“Programming is the greatest expense of any cable system operator (Schement, 2002, p. 92).
Rise of Cable News Network

2. 2
On June 1, 1980, Ted Turner, a broadcasting executive, created CNN, “television’s first
24-hour all-news service,” as part of Turner Broadcasting System, a division of Time Warner
Inc., since 1996 (Erickson, 2014). According to the book, CNN Making News in the Global
Market, Ted Turner called CNN “America’s news channel” and used satellites to deliver the
network across the country to cable operators (Flournoy & Stewart, 1997, p. 1). Because of this,
Turner could reach consumers without needing a “network of local broadcast affiliates to
rebroadcast his programs” (Flournoy & Stewart, 1997, p. 1).
Although CNN was a new innovative sector of Turner Broadcasting System (TBS), at the
company’s beginnings only “20 percent of U.S. television households” received cable television,
and CNN only reached 1.7 million of those households, “far fewer than were needed to make a
profit” (Flournoy & Stewart, 1997, p. 1). According to Encyclopedia of Communication and
Information, approximately two years later Turner launched CNN Headline News, which
delivered “thirty-minute newscasts around-the-clock” (Schement, 2002, p. 100). “Industry
executives predicted a quick death for CNN,” and this prediction was proved wrong as CNN
continuously covered major news events, such as the attempt to assassinate President Ronald
Reagan in 1981 and the Challenger space shuttle tragedy in 1986 (Schement, 2002, p. 100;
Erickson, 2014). This constant coverage of major events helped CNN remain in the industry.
This new kind of 24-hour cable network was “redefining television news” (Schement, 2002, p.
100). As a result of its extensive coverage, CNN became a “popular and respected source for
news” (Schement, 2002, p. 100). Although CNN started out on uneven footing, Ted Turner’s
new ideas for cable news were likely reasons for its eventual success.
In addition to the popularity of its constant news coverage, Turner’s cable channels and
the increase of other cable channels, such as ESPN, HBO, Nickelodeon, and Disney, countered

3. 3
cable’s limitations in reaching the public by “making cable more attractive” (Flournoy &
Stewart, 1997, p. 2). As a result, CNN was soon reaching “four out of five U.S. cable homes, and
nearly 40 percent of all U.S. TV homes” (Flournoy & Stewart, 1997, p. 2). While CNN was
doing well under TBS, Turner looked toward other strategies to expand the success of his cable
networks and many of these strategies are still used today.
Time Warner Inc.’s History and Portfolio
According to the Media Data Base of the Institute of Media and Communication Policy,
Time Inc. was a news magazine, founded in 1922 in New York City. The Warner Brothers
entertainment company emerged in 1923 (“Time Warner Inc.,” 2015a). “Warner extended its
business through the production of television” in the 1950s and 1960s (“Time Warner Inc.,”
2015a). And in 1969, Steven Ross, the CEO of Kinney Nation Service, purchased Warner
Brothers. Then in 1989, the leaders of Warner and Time, considering the economic advantage of
consolidating numerous media divisions into one, “decided to merge their companies” (“Time
Warner Inc.,” 2015a).
After this merger, in 1996, the head of Time Warner bought Turner’s CNN-Group and
became its parent company, making TBS a division of Time Warner (“Time Warner Inc.,”
2015a). The head of Time Warner, Gerald Levin, merged with AOL in 2000 and the company
became AOL Time Warner. This merger failed to remain in place and Warner and AOL
officially split in 2009 (“Time Warner Inc.,” 2015a).
The media and entertainment company, Time Warner Inc. is CNN’s parent company.
Three divisions comprise Time Warner’s product portfolio: Turner, which consists primarily of
“cable networks and digital media properties,” Home Box Office, which consists of “premium
pay television and streaming services,” and Warner Bros., which consists of “television, feature

4. 4
film, home video and videogame production” (“Time Warner Inc.,” 2015b). The company
continues to produce content within the “traditional TV ecosystem,” as well as extending outside
the ecosystem to on-demand viewing and new digital products (“Time Warner Inc.,” 2015b).
The Turner division owns CNN as one of its many networks. Turner’s portfolio includes
domestic and international programming television networks and other television and digital
platforms for entertainment, sports, kids, and news (“Time Warner Inc.,” 2015b). CNN’s
position in its parent company’s portfolio falls under Turner’s news programming segment. CNN
is currently moving toward original programming and documentaries in addition to its traditional
news programming (“Time Warner Inc.,” 2015b).
CNN and Time Warner Inc.’s Corporate Culture
What does it mean to have a corporate culture? Corporate culture is the company’s
character or personality. The foundation, which a company is built upon, establishes the
traditional norms and values that stay with the company. From its beginning, CNN took a
different approach toward news delivery. CNN’s tradition of airing breaking news is the core of
its corporate culture (Küng, 2000, p. 150). CNN tries to deliver daily live breaking news
coverage quickly. CNN’s immediate and live coverage of breaking news may produce a strong
“sense of higher purpose” among employees and motivate them to produce content that can
make a difference in world events (Küng, 2000, p. 152). This cultural attitude of CNN may affect
its strategies for reaching a wider audience and deliver news a specific way.
Another potential cultural characteristic and possible strategy of CNN is its balanced
approach to delivering the news. As a result employees could potentially believe it is best to deal
only in facts. This possible culture and company value implies that employees focus on the
information rather than opinions. According to the author of the article, “Has CNN’s All-News

5. 5
Strategy Become Old News?,” CNN focuses on the story to “drive the audience, rather than
opinions” (Sherman & Lee, 2012).
CNN’s brand reputation is built on the idea that the company began delivering news
differently through its 24-hour news service and global reach. This creates a corporate culture,
which may produce an innovative attitude among employees that may allow CNN to take new
approaches and risks unlike its competitors. This cultural aspect of the company and its
employees could potentially stand the test of time as news shifts more to digital platforms.
Time Warner Inc.’s corporate culture and attitude is similar to CNN’s in that it stands out
among others as an innovative media company based on its history (Time Warner, 2014, p. 1).
Because CNN is one small unit in the massive company, its culture is likely more concentrated
and understood among employees. Time Warner, because of its influence over multiple divisions
in which smaller networks are owned, maintains a culture where its strategies are secure in
comparison to the competition.
CNN’s Strategies: Tradition and Times of Change
A cable network has strategies to increase or maintain revenues and ratings in time of
changing technology. A few of these that CNN started using at the beginning of the company’s
creation have remained with the current company. In addition to its long-standing strategies, in
response to changing consumer behavior in the digital age of media, CNN is moving toward new
strategies. These recent strategies have been planned and executed as a way to combat major
current issues and problems CNN and its parent company, Time Warner Inc. are facing. Below,
CNN’s strategies are discussed, in addition to the current problems.
24-Hour News
Since the start of the company in 1980, CNN has had 24-hour news coverage. Although

6. 6
CNN’s start was unpromising, the usefulness of having news 24 hours a day was recognized.
And even today, CNN continues to release news all day every day. According to the book, Inside
the BBC and CNN Managing Media Organizations, CNN’s “core concept” was (and still is
today) to concentrate only on news and to cover it in an “entirely different way” (Küng, 2000, p.
78). The 24-hour news service could be considered CNN’s most critical feature, as it has made
the company’s brand a reliable source for information at any point of the day.
Globalization
Another strategy is CNN’s use of the international market to reach a larger audience. At
its beginnings, Turner believed the global market “appeared to offer new opportunities for
growth” (Flournoy & Stewart, 1997, p. 2). In 1985, Turner put CNN and Headline News
domestic signals “on an international satellite…thus creating CNN International” (Flournoy &
Stewart, 1997, p. 3). A significant moment in CNN’s history of global expansion was during the
Gulf War in 1991; “its wall-to-wall coverage” produced CNN’s highest ratings and led to talk
about the ‘CNN factor’ or ‘CNN effect’, where CNN was “thought to be inadvertently shaping
news media events by virtue of its aggressive live television coverage” (Flournoy & Stewart,
1997, p. 6-7). This aggressive strategy refers to the company’s ability to cover news before its
competitors. CNN tries to be the first to cover a story live regardless of where it takes place. As
the company continued expanding, CNN sought to appeal to a worldwide audience and banned
words and phrases such as ‘foreign’ and ‘here at home’ from its newscasts” (Erickson, 2014).
According to the 2015 10-K Report, provided by the Securities and Exchange
Commission, CNN Worldwide “reaches approximately 300 million households” internationally
and is a “portfolio” of over 20 “news and information services across cable, satellite, radio,
wireless devices and the Internet in more than 200 countries” (“Time Warner Inc.,” 2015b, p. 6).

7. 7
Reaching the global market is the central strategy of CNN because it gives the company a
larger reach. From its start, the company has maintained its brand reputation as “a credible
source of international news on the basis of its on-the-spot reporting” (Flournoy & Stewart,
1997, p. 7). As of 2015, TBS still focuses on preserving “CNN’s leadership in worldwide
breaking-news and political coverage” (“Time Warner Inc.,” 2015b, p. 6).
CNN Family
Another original strategy that CNN has maintained since its start is its family of
networks, which includes “CNN U.S., CNN International, CNN en Español, CNNj, CNN.com,
CNN Airport Network, CNN Radio, CNN Newsource and HLN” (“Time Warner Inc.,” 2015b).
Each of these 24-hour networks has its own channel; therefore, CNN is able to reach large
audiences. With so many channels, CNN has “an insatiable demand for programming” (Flournoy
& Stewart, 1997, p. 3). It can take one news story and air it over the many channels repeatedly in
different ways.
This family of networks under CNN is still present today and reaches broad segments of
the population. CNN still continuously airs breaking news and chooses different channels
throughout the day to do so. As a result, news is available at all times to consumers. According
to authors, Flournoy and Steward, CNN is efficient because of its capability to “adapt” the same
current event story to its different networks (1997, p. 4). Its “centralized newsgathering
operation” produces news content, which CNN networks can choose from and air, “depending
on their audience” (Flournoy & Stewart, 1997, p. 3-4). This strategy is useful because CNN has a
higher chance of appealing to a particular segment of the population and as a result its audience
will grow.
Programming

8. 8
Programming is a large expense for cable companies; therefore, useful programming
strategies are important. Another original feature CNN is the use of personalities to deliver news,
such as Larry King who hosted “one of CNN’s most popular series” (Erickson, 2014). CNN’s
most recent programming “staples” include Anderson Cooper 360 ° and The Situation Room
(Erickson, 2014). Instead of having generic news programs for each part of the day, anchors have
their own distinct television news show. Each show has segments pertaining to different news
and may approach the news stories differently depending on the show. Having personalities
deliver news gives CNN and other news networks an entertainment edge when airing news. This
strategy provides the viewing population choices of shows to pick from depending on their
preference and thus might increase the size of CNN’s audience.
CNN has traditionally been an all news network, but as of 2015 CNN changed this
strategy and plans to “increase the amount of original programming” over time (“Time Warner
Inc.,” 2015b, p. 6). Jeff Zucker became president of CNN Worldwide in 2013 and went head first
into his “ambitious remodeling project” in which he focused less on news programming during
some parts of the day and filled the time slots with shows such as, the food and travel show,
Anthony Bourdain: Parts Unknown (“CNN Has Made the Most Dramatic Transformation,”
2015). Jeff Zucker’s risky strategies seem to disregard CNN’s original prime-time format, which
was to air only news all day every day. With original programming and the shift to “nonfiction
programming and documentaries” to attract younger audiences, Zucker has attempted to broaden
“the definition of news at CNN” (Steel, 2014). Appealing to a younger audience is an important
task because at this time, younger generations are less likely to care about cable television. While
the strategy of including original programming in CNN’s prime-time line-up may be successful,
this strategy is risky due to higher costs to produce “an hour of an original series” compared to

9. 9
“an hour of news” (Steel, 2014). In addition to the high cost, when a big story hits the news
networks, the new non-fiction shows will be temporarily stopped (Steel, 2014).
Despite Zucker’s efforts to step outside the news sector to include factual programming,
he does remain focused on CNN’s news programming. Part of his remodeling strategy is to focus
CNN’s news resources on a single news story “for days or even weeks on end” (“CNN Has
Made the Most Dramatic Transformation,” 2015). According to the article, “How Jeff Zucker Is
Seeking to Reshape CNN,” Zucker wants CNN to emphasize breaking news and focus on “two
or three major stories throughout a given day” instead of having a “scattershot report of
headlines,” which was CNN’s old strategy (Steel, 2014). Instead of a wide variety of news, CNN
delivers concentrated news on a few events, which may appeal to more people.
Zucker’s changes to the traditional all news networks proved successful in 2015, when
prime-time ratings surged 10 percent (“CNN Has Made the Most Dramatic Transformation,”
2015). Author of the article, “CNN Aims to Show Advertisers It Can Balance Breaking News,
Originals in Upfront” says that CNN has aired 12 new original series since Zucker became
president. For 2016, CNN has picked up two more original series and “five new documentary
films” (Poggi, 2015). CNN has continued to pursue Zucker’s implemented strategy of original
programming in addition to news as it appears to favor well with the company thus far.
Digital Age
The new age of digital news could be a blessing or a curse. While the age of digital media
poses challenges on the cable industry, it may be an opportunity to expand CNN’s market.
According to Time Warner’s 2014 Annual Report, Time Warner is forced to respond to changes
in technology and consumer’s desire to have more control over “when, where and how they
consumer content,” because of the problems they pose such as new technologies drawing large

10. 10
audiences away and “discouraging younger audiences from subscribing” (Time Warner, 2014, p.
13). Consequently, CNN’s most pressing strategy planning is focused on using digital media to
increase ratings and revenue rather than letting it hinder the company. Like other cable networks,
CNN is trying expand its “digital operation” (Steel, 2014). At the time of The New York Times
article, CNN ranks seconds among cable news networks, and the company “has added 50
employees in the last five months to its online division” (Steel, 2014). In addition CNN ranks as
the “third-most-trafficked news and information digital outlet” (Steel, 2014). And according to
Time Warner’s 2014 Annual Report, CNN’s digital platforms are continuing to grow in terms of
usage and its online news site was number two in 2014, which pulls it ahead of its “cable news
network peers” (Time Warner, 2014, p. 9).
The company has also developed mobile products, increased the amount of short form
video content online, and intensified its online political news in order to expand its digital
presence (“Time Warner Inc.,” 2015b). As reported by an article from USA Today, the president
of CNN Worldwide, Jeff Zucker, believes CNN’s “future lies heavily in digital” referring to
CNN’s political news online presence (Rieder, 2015). CNN is taking a risk in starting a new
operation within the business to adapt to recent changes in the media. Ed O’Keefe, vice president
of CNN Politics says, the current mission is “fostering a digital first mentality at CNN” (Rieder,
2015). Zucker, O’Keefe, and Smolkin, the executive editor, “envisioned an operation with three
key components: breaking news, smart enterprise and analysis, and original, high-quality digital
video” (Rieder, 2015).
Another strategy in the shift towards digital, according to Time Warner’s 2014 Annual
Report, is the company’s TV Everywhere strategy, which has been applied to all of Time
Warner’s networks (Time Warner, 2014, p. 8). This strategy gives subscribers access to content

11. 11
on multiple devices using Internet connection. Turner, under which CNN falls, has turned to live
streaming for subscribers (Time Warner, 2014, p. 8). According to the 2015 10-K Report, CNN
launched CNNGo in 2014, allowing subscribers to watch news and original programs live and on
demand (“Time Warner Inc.,” 2015b). CNNGo gives consumers “control over their TV
experience” and gives users additional CNN content (Time Warner, 2014, p. 8). Consumer’s
viewing habits continue to change in the media industry, but CNN is expected to continue
planning strategies to accommodate this changing consumer behavior. CNN’s current new
strategies and operations, although recent, seem to be promising and hopefully will become
integrated within the cable company’s business.
“Courageous”
A consequence of the emerging digital media technologies mentioned above is changing
consumer behaviors, which has had a negative effect on advertiser revenue. CNN and other cable
networks’ audience is shifting to digital technologies to view content. Therefore, few people are
watching traditional television, and as a result advertisers are not able to reach them. According
to the Time Warner’s Annual Report, in addition to this, people are frequently using new “digital
video recorders to skip advertisements” (Time Warner, 2014, p. 14). Consequently, ratings are
down and advertisers place a lower value on advertising time from the networks because few
people will see it. Additionally, advertisers’ have shifted towards advertising on digital platforms
and are willing to pay less because of the unlimited space digital media offers (Time Warner,
2014, p. 14-15). Advertisers will pay less for advertising space for the same size of the audience.
In response to decreasing advertising revenue due to a decrease in ratings and an increase
in digital media usage, as reported in the press release, “Turner Broadcasting Debuts Branded
Content Studio: Courageous”, Turner has launched its studio for in-house branded content called

12. 12
Courageous (2015). Producing in-house content is a strategy to make up for the lost advertising
revenue. This studio takes advantage of CNN’s production capabilities and news brand
reputation to meet “marketing objective of advertising partners” and will be “distributed across
CNN”s global portfolio of linear and digital properties” (“Turner Broadcasting Debuts Branded
Content Studio: Courageous," 2015). Creating a separate division devoted to in-house branded
content production is a strategy to potentially create a large new revenue source that traditional
advertising revenue no longer provides.
The Competition: MSNBC and Fox News Channel
In the mid-1990s, CNN’s competition increased and many new 24-hour news networks
were started, “creating a ‘gold rush’ for news services” (Küng, 2000, p. 109). From this wave of
new competition came MSNBC and Fox News Channel, both 24-hour news services just like
CNN. MSNBC and Fox News were both created in 1996 (Schement, 2002, p. 105). MSNBC and
Fox News are US networks and CNN’s national competitors. These are CNN’s primary
competitors because they offer similar products: 24-hour news coverage on breaking news, and
are strategically competing to get ahead, especially MSNBC and CNN which close in ratings and
revenue.
According to NBC’s website, NBC Universal, a division of Comcast Corporation owns
MSNBC, a news network giving a daily analysis of headlines and reaching more than 96 million
households (MSNBC, 2016). It is a 24-hour every day news service and delivers breaking news,
live news coverage, and documentary programming. It also delivers news and other additional
show content across many platforms. These platforms include MSNBC.com, a new digital
platform called Shift and its Sirius XM radio. There are also apps for iPhone and iPad for live
streaming and programming clips (MSNBC, 2016).

13. 13
Reported in an article from The Wall Street Journal, MSNBC’s has branded itself as a
left leaning network, a characteristic that has remained in place, until now (Flint, 2015). This
brand has been its strategic position in the industry, competing with CNN, which has taken a
more middle ground, bipartisan approach to delivering the news. CNN focuses on story rather
than opinions to “drive its audiences” (Sherman & Lee, 2012). According to Joe Flint, a
journalist for The Wall Street Journal, MSNBC could be taking a less left leaning approach
(2015). This could cause even more competition with CNN, as MSNBC would be using CNN’s
traditional strategic position in the industry. MSNBC is retreating from its approach in order to
“reverse a ratings slump” (Flint, 2015). Overall, the company is facing similar challenges as
CNN, including declining ad revenue, which is discussed below under “CNN’s Finances
Compared to the Competition.” In addition to this problem, there is also a decline in ratings and
subscribers not willing to pay. MSNBC still remains left leaning, but is slowly changing its
format and getting rid of some personalities (Flint, 2015).
Fox News Channel, as a cable company, is facing similar problems, but has remained
ahead of both CNN and MSNBC. According to the Encyclopedia Britannica, in 2013, Fox News
was transferred to 21st
Century Fox after “News Corporation split into separate media and
publishing entities” (Ray, 2014). Although CNN started before Fox News Channel, Fox News
made “steady gains” against CNN and in 2002 surpassed CNN, a lead that it has retained
throughout the decade (Ray, 2014). Fox News Channel brand, different than CNN and MSNBC,
is a right leaning news network and relies on opinions as well as facts of the news (Sherman &
Lee, 2012). The company “forged strong links” with many members in the Republican Party and
eventually established a more conservative approach to news delivery.
Current Financial Results: Time Warner, CNN, and Competition

14. 14
Time Warner Inc.’s financial statement is represented in Table 1 below. The data were
collected from Yahoo Charts, showing the revenue, operating profit margin, and net profit
margin over the last six years from 2010 to 2015.
Table 1
Time Warner Inc. (In billions)
Dec 31, 2015
Dec 31,
2014
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Gross Revenue 28.12 27.36 26.46 25.32 28.97 26.89
Operating Income 6.87 5.98 6.27 5.5 5.81 5.43
Operating Profit
Margin 24.43% 21.86% 23.70% 21.72% 20.06% 20.19%
Net Profit 3.83 3.83 3.69 2.93 2.89 2.58
Net Profit Margin 13.62% 14.00% 13.95% 11.57% 9.98% 9.59%
Table 1 represents figures for revenue, operating profit margin (operating income divided
by revenue) and net profit margin (net profit divided by revenue). Revenue is all the money that
comes into a company. In the case of Turner, a division of Time Warner and owner of CNN,
most of the revenue comes from subscription, advertising, and content revenues (“Time Warner
Inc.,” 2015b, p. 122). Operating income is the revenue minus expenses and net profit is operating
profit minus taxes and depreciation. Net profit is the company’s bottom line. Profit margin is the
percentage that a company retains as profit. The table shows that revenue rose from 2010 to 2011
and then began to drop until 2013 when it picked back up again. Since 2013 revenue rates have
been increasing and so has the net profit. These numbers show an overall positive increase in
revenue for the company.
According to Yahoo charts, Fox News Channel’s parent company, Twenty-First Century
Fox made $28.99 billion in revenue for 2015 (Twenty-First Century Fox Income Statement and
$31.87 billion in 2014 (Annual), 2015). In 2014, NBC Universal, MSNBC’s parent company,
had $25.4 billion in revenue and $9.6 billion of which came from cable networks (Szalai, 2015).

15. 15
In terms of parent companies, Twenty-First Century made the most in revenue in the last year
and in 2014 compared to the other two parent companies. This could be a reason for Fox News
Channel’s success in revenue as well. MSNBC’s parent company had the lowest amount of
revenue, which could explain MSNBC’s low revenue compared to its competing news networks.
CNN’s Role in Finances
Table 2 represents the revenues (in millions) of Time Warner’s three divisions for the
years 2015, 2014, and 2013. The total revenue amount should be similar to the revenue amount
in Table 1 for those years. The table is from Time Warner’s 10-K Report.
Table 2
Gathering specific revenue for CNN is difficult, therefore, looking at Turner’s revenue
will provide an understanding of how much of the parent company’s revenue comes from CNN.
For all three years, Turner, HBO, and Warner Bros. have remained in the same ranking in terms
of how much revenue they provide for Time Warner Inc. Turner is second, providing Time
Warner Inc. with 37.7 percent of its total revenue of $28,118M in 2015. Looking at this chart,
one can see that CNN, under Turner, plays a significant role in the total revenue for Time
Warner. All three divisions of Time Warner significantly impact the company’s revenue.
CNN Finances Compared to the Competition
Table 3 below represents the net profit for CNN and its national competitors Fox News
Channel and MSNBC for 2013 and 2014. Information for the revenue and profit of these

16. 16
subsidiaries for 2015 was difficult to find. The table was taken from Pew Research Center on
Journalism and Media.
Table 3
The data in Table 3 show that Fox News is well ahead of CNN and MSNBC in profit,
making more than them combined. Reasons for this could be numerous: higher advertising
revenue, or higher ratings and therefore, higher subscriptions. CNN fell second in profit for 2014
and this position is currently the same.
In terms of ad revenue, MSNBC is lagging. The ratings “slump” MSNBC has
experienced last year has put MSNBC behind CNN in 2015 and has hurt advertising sales.
MSNBC has not yet been hurt badly, but the trend of decreasing ad revenue could eventually
hurt the company in a big way (Flint, 2015). CNN has faced this same problem, as mentioned
earlier, but has been strategizing ways to reverse the revenue decline. Since the publication of
Flint’s article in August 2015, MSNBC will take in $217.2 million in advertising revenue. This is
low compared to CNN’s projected ad revenue of $330 million and Fox’s ad revenue of $801.4 in
the year 2015 (Flint, 2015).
Ratings: CNN and Competition

17. 17
Dividing people watching the program by the total number of television households
calculate ratings for a television program. According to an article from The Wall Street Journal,
in the past, CNN has trailed MSNBC in prime time ratings, but is now ahead as of 2015 with
550,000 viewers (Flint, 2015). According to TVbythenumbers.com, which presents Nielson’s
ratings results, Fox News Channel remains far ahead in ratings, with 1,196,000 P2+ (persons
over the age of 2) viewers for the whole day on October 8th
, 2015, while CNN only had 419,000
and MSNBC 458,000 P2+ (Cable News Ratings for Thursday, 2015). MSNBC’s ratings are
higher putting CNN in third place. MSNBC and CNN are closer to one another in ratings,
making the competition more intense for second place between the two companies. During
primetime, MSNBC’s ratings were significantly higher at 849,000 P2+ and Fox News were at
2,136,000 P2+ while CNN’s were only 442,000 (Cable News Ratings for Thursday, 2015). For
the total day however, CNN’s rating for people aged 25-54 was 117,000 while MSNBC was
81,000. The people aged 25-54 is key for ratings because they are the ideal demographic for
advertisers.
According to Variety, although numbers seemed to be low for CNN in October, toward
the end of 2015, CNN and Fox News Channel celebrated their increase in ratings, partially due to
the presidential primary debates (Kissell, 2015). Fox News remained number one in ratings and
CNN “racked up strong debate numbers of its own” (Kissell, 2015). Nielsen’s current numbers
for December 29, 2014 – December 27, 2015 show that Fox News Channel was number one
among cable news networks in the 25-54 key demographic during primetime. The numbers also
indicate that in “its average audience of 349,000 viewers in the demographic was up 13%” and
CNN came in second with 243,000 and up 30%, while MSNBC was at 143,000, down 18%
(Kissell, 2015). This was CNN’s largest advantage over MSNBC in ratings in 10 years. (Kissell,

18. 18
2015). These ratings provide evidence that CNN and MSNBC will continue to compete for
second place, as long as Fox News remains largely ahead.
Conclusion
After analyzing and interpreting CNN and its parent company’s current strategic and
financial position in the cable news industry, one can come to the conclusion that CNN is trying
to prevent the changing media industry from affecting their business. Looking at the strategies
CNN has recently implemented and its increased ratings from 2014, the company proves itself
capable in finding new ways to reach audiences and maintain their revenue. From the
information provided concerning the competition, CNN is slowly improving and might be able to
secure itself second, in front of MSNBC. Unfortunately, what ratings will look like at the end of
2016 is hard to predict; however, the figures provide evidence that CNN could potentially
maintain its growing ratings, which could eventually help with the recent unsteady flow of
revenue. The information regarding CNN’s position in the market, show CNN’s strength of
strategizing around current issues facing the company. The strategy for tackling the decline in ad
revenue shows this strength.
Based on the information and the position of CNN in the market, it is clear that the
company does not need to urgently cut back. With its new digital focus, as well as new branded
content area and new programming strategies, it can be assumed that the company will be
looking for new employees. These emerging sectors of the company are exciting and important,
as they will determine CNN’s new strategic position in the new digital age of media. The area of
tradition news coverage will converge with digital platforms and many people will be excited to
advance this part of CNN.

19. 19
References
Cable News Ratings for Thursday, Oct. 8, 2015. (2015, October 09). Retrieved April 01, 2016,
from http://tvbythenumbers.zap2it.com/2015/10/09/cable-news-ratings-for-thursday-oct-
8-2015/
Cable TV: News Channel Profits. (2016). Pew Research Center. Retrieved April 01, 2016, from
http://www.journalism.org/media-indicators/cable-news-channel-profits/
CNN Has Made the Most Dramatic Transformation. (2015, May 9). The Buffalo News (New
York). Retrieved March 27, 2016, from LexisNexis Academic database.
Erickson, H. L. (2014). Cable News Network (CNN). Encyclopædia Britannica.
Flint, J. (2015, August 12). MSNBC's Reboot: More News, Less 'Leaning'. Wall Street Journal -
Eastern Edition. pp. B1-B2.
Flournoy, D. M., & Stewart, R. K. (1997). CNN: Making News in the Global Market. Luton,
Bedfordshire, U.K.: University of Luton Press
Kissell, R. (2015, December 30). Cable News Ratings: CNN on the Rise in 2015; Fox News
Channel Remains Dominant. Retrieved April 01, 2016, from
http://variety.com/2015/tv/news/cable-news-ratings-cnn-top-gainer-fox-news-channel-
dominant-1201666151/
Küng, L. (2000). Inside the BBC and CNN: Managing Media Organizations. London:
Routledge.
MSNBC. (2016). Retrieved April 01, 2016, from http://www.nbcuniversal.com/business/msnbc
Poggi, J. (2015, March 10). CNN Aims to Show Advertisers It Can Balance Breaking News,
Originals in Upfront. Retrieved April 01, 2016, from http://adage.com/article/special-
report-tv-upfront/cnn-aims-balance-breaking-news-originals/297517/

20. 20
Ray, M. (2014). Fox News Channel. Encyclopædia Britannica.
Rieder, R. (2015, September 15). CNN Politics ‘Creating a New World’ of Digital News. USA
Today. Retrieved March 27, 2016, from LexisNexis Academic database.
Schement, J. R. (2002). Encyclopedia of Communication and Information (Vol. 1&2). New
York, NY: Macmillan Reference USA.
Sherman, A., & Lee, E. (2012). Has CNN's All-News Strategy Become Old News?. Business
Week, (4276), 19-21.
Steel, E. (2014, October 3). How Jeff Zucker Is Seeking to Reshape CNN. The New York Times.
Retrieved March 28, 2016, from http://www.nytimes.com/2014/10/04/business/media/at-
crossroads-cnn-seeks-to-reassert-itself.html?_r=0
Szalai, G. (2015, February 24). NBCUniversal Posts Quarterly, Annual Earnings. Retrieved
April 01, 2016, from http://www.hollywoodreporter.com/news/nbcuniversal-posts-
quarterly-annual-earnings-777347
Time Warner. (2014). Time Warner Annual Report 2014. 1-138. Retrieved from
http://www.timewarner.com/sites/timewarner.com/files/ckeditor/public/files/TWX_2014
_Annual_Report.PDF
Time Warner Inc. (2015a, May 6). Media Data Base. Retrieved March 25, 2016, from
http://www.mediadb.eu/en/data-base/international-media-corporations/time-warner-
inc.html
Time Warner Inc. (2015b). 10-K Report. Retrieved from
https://www.sec.gov/Archives/edgar/data/1105705/000119312516477965/d280491d10k.
htm

21. 21
Time Warner Income Statement (Annual). (n.d.). Retrieved March 31, 2016, from
https://ycharts.com/financials/TWX/income_statement/annual
Turner Broadcasting Debuts Branded Content Studio: Courageous. (2015, June 8). Retrieved
March 31, 2016, from http://www.turner.com/pressroom/turner-broadcasting-debuts-
branded-content-studio-courageous
Twenty-First Century Fox Income Statement (Annual). (n.d.). Retrieved April 01, 2016, from
https://ycharts.com/financials/FOXA/income_statement/annual