Media World: Why did CNBC slump in July?

The stock market's best July in 20 years did not do CNBC much good.

Ratings for the No. 1 business news network were down 24 percent year-over-year among viewers in the key 25 to 54 age demographic; among total viewers, ratings slopped by 28 percent. There also were double-digit declines for CNBC's top shows, including "Squawk on the Street," "Street Signs" and Jim Cramer's "Mad Money." Viewership for the "Kudlow Report," hosted by the hyper-grumpy Larry Kudlow, fell 34 percent while the extraordinarily spunky Suze Orman saw her ratings in the key demographic plunge 43 percent.
The viewership declines came amid some high-profile ratings gimmicks, including documentaries on the pornography business and the sport of ultimate fighting. Moreover, given that controversial Wall Street and auto industry bailouts continue to generate controversy, the declines are particularly noteworthy.

CNBC has argued for years that Nielsen's ratings system does not accurately reflect its viewership. While the ratings company gauges television viewing habits at home, many of CNBC's financial-sector viewers tune it in at work. Ratings on cable news channels are usually hurt in July because many anchors go on vacation and are replaced by less-popular substitutes.

Nonetheless, some observers argue that viewers are tuning out CNBC because they don't like what the are seeing. This became particularly clear earlier this year, when CNBC's ratings dropped after its slap-fight with the "Daily Show's" Jon Stewart. Given that rivals Fox Business News and Bloomberg TV are not measured by Nielsen, it is difficult to measure the degree to which CNBC's perspective is driving its numbers.

According to Chris Roush, who authors the Talking Biz News blog and teaches business journalism at the University of North Carolina, "CNBC was really clicking on all cylinders a year ago. I don't see the same thing happening right now. They seem to be stretching too much to make stories work, and I think readers notice that stuff. Plus, I think more people tune into CNBC when things are more tumultuous, and that's not been the case for the past few months."

CNBC, which attracts about 241,000 viewers during a broadcast day, rejects Roush's criticism. Year-to-date through July, ratings in the key demographic and for total viewers "approximately matched our measured ratings for the first seven months of 2008," said Jennifer Dauble, a CNBC spokeswoman. CNBC's Web site gained 1.5 million viewers in July and its mobile WAP site saw a 2,000 percent gain in page views from a year ago. Ratings also rose in Europe and Asia, she said.

"CNBC is stronger and better than it has ever been which is probably why we just completed yet another record breaking quarter and first half for revenue and operating profit," Dauble told DailyFinance in an email.

CNBC has the same problem that other cable news channels face: people like to tune at times of great uncertainty or turmoil. When times are getting better, they lose interest. For CNBC, there is the added problem of viewers becoming numb to the drumbeat of bad news.

"There is a lot of other types of information that are not as positive as the stock market," said Brad Adgate, senior vice president and director of research at Horizon Media, the largest independent media services company, in an interview.

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