Daniel Gross was online on Oct. 25 to chat with readers about this article. Read the transcript.
The on-air talent at Fox Business Channel, which debuted last Monday, is uniformly peppy. But since their smiling pusses flooded the airwaves, talking up the jargon-free virtues of capitalism and the sheer fun of business, the market has been grumpy. Have you noticed that the Dow Jones Industrial Average fell every single day last week?
It could be a simple case of bad luck. The stock market, after all, is famously unpredictable and moves in inexplicable, highly random fashion. On the other hand, maybe we shouldn't be surprised. Big old-media companies, with their long corporate-planning processes and general lack of urgency, are frequently slow to learn about new trends—and even slower to capitalize on them. As a result, by the time their new products launch, the trends they're designed to monetize have frequently ended.
There's plenty of evidence that big media plays can serve as contrary indicators. There's the magazine-cover thesis—the notion that mass-circulation mainstream magazine cover stories frequently foretell the top of a financial phenomenon. Time made Amazon.com's Jeff Bezos Man of the Year in December 1999, and Fortune put Krispy Kreme on its cover in July 2003, right when the doughnut-maker hit its peak. BusinessWeek ran a cover story proclaiming the "Death of Equities" in 1979, which was a great time to buy stocks. Book publishers fall into the same trap. Dow 36,000 was published just as the 1990s bull market ended. In 2005, sensing that the nation just couldn't get enough of literature by right-wing apparatchiks, Simon & Schuster shrewdly hired right-wing apparatchik Mary Matalin to start a new imprint, Threshold Editions, whose output seems to consist of Cheney family memoirs and knockoffs of popular books. Example: little-watched TV yakker Glenn Beck's An Inconvenient Book. TV shows that deal with hot business topics always seem to bubble up onto the prime-time network schedules at inopportune moments, like The $treet and Bullin late 2000, or Hot Properties in the fall of 2005.
Does this also apply to entire networks, including the latest brainchild of Fox News head honcho Roger Ailes? After all, decisions on the creation of new networks tend go through a much longer corporate planning process, not to mention negotiations with cable operators to carry the programming. Recent history provides mixed results. CNBC, which Ailes turned into the dominant business news channel in the 1990s, made a smart contrary move to expand in 1991, picking up failed rival FNN at a time when the economy was in recession. CNN rolled out CNNfn in 1995, in plenty of time to catch the 1990s-era bull market, but lost its nerve after the NASDAQ crash and the cavalcade of scandals. In October 2004, Time Warner, after a lengthy planning effort that likely started during the market doldrums of 2003, announced CNNfn would go off the air in December 2004.
In the middle of 2004, starting a business news channel would likely have been a brilliant contrarian play. As Jon Fine of BusinessWeek noted last November, "Murdoch & Co. first floated the notion of a 24/7 business channel two-plus years ago." CNNfn's audiences and advertisers, few as they were, would have been looking for a new home. And the market environment was favorable. (The markets have, of course, gone on a tear since CNNfn was canceled.)
But now? At a time when the bull market seems to be breaking down, when investment banks are beginning to cope with the aftermath of a credit orgy, at a time in which income inequality has surged to levels not seen since the 1920s, and when even rich people are abandoning the Republican Party—you have to wonder whether this is the most auspicious time to launch a new TV network that combines GOP talking points and simplistic market updates.
So, does the debut of the Fox Business Channel signify a top? They'll report. The market will decide.
Postscript: Ailes and company have described the rationale for a new business channel by noting that the field's dominating presence—CNBC—isn't sufficiently pro-business. Of course, CNBC already offers something like a Fox News version of economic and political coverage. Anchors parrot corporate America's preferred line on trade and taxes, sneer at Europeans, and routinely refer to Hillary Clinton as a socialist. It's nearly impossible to find centrists on-air, let alone left-wingers. Saying America needs Fox Business Channel because CNBC isn't sufficiently pro-capitalist is a little like saying Boston needs a new baseball team because the Red Sox aren't a sufficient object of local obsession. I'm sure there are much better metaphors/analogies to describe the purported need for a new entrant in a market to provide balance to the dominant force—by going even further over the edge. Please send yours to firstname.lastname@example.org. We'll run the best.