CNN: "The Newsroom"

CNN's embarrassing mistake on Thursday of declaring the U.S. Supreme Court overturned President Barack Obama's health care law was unforgivable.  The rush to be first prevailed over the need to be right for the desperate and ratings challenged CNN.  The incident was also a black eye for all television news.

The Newsroom, which premiered Sunday on HBO, was an overly dramatized attempt to decry the current state of the television news business. The program, which was filled with smart dialogue, internal conflict and self-righteousness, was a bit misleading about what happens behind the scenes at a cable news network.

Nonetheless, Aaron Sorkin should be praised for raising some important questions about television news. However, on Wednesday's CBS This Morning, Sorkin said, "News shows should be exempt from having to deliver ratings." Really? If there were no news ratings how would media companies pay their news gathering expenses?

Global news organizations, such as ABC, CBS, NBC, CNN and Fox, each cost several hundred million dollars to operate per year. For example, the Fox News Channel invests around $700 million annually, surpassing CNN for the first time in 2010. CNN has about 46 news bureaus worldwide, while Fox News has fewer than 20.

The idea that network news divisions were once allowed to be money-losing operations is not really true. No matter, today there is no way media companies can cover the massive costs of operating a quality and highly competitive global news organization by allocating funds from their other divisions. And why should they since the news business is a big business?

CNN and HLN (Headline News) combined make about $600 million in annual profits. The Fox News Channel makes more than $800 million in profits per year, and MSNBC about $200 million. The cable news companies benefit from two streams of revenue, advertising dollars and subscription fees. Fox News receives slightly more than CNN in advertising revenue per thousand viewers (CPM), but enjoys a huge advantage over CNN in monthly revenue per subscriber. Broadcast news organizations, such as CBS and ABC, are most heavily reliant on just advertising dollars.

In all cases news organizations are heavily dependent on ratings. Advertisers pay to have their commercials aired on newscasts based on how many viewers their ads reach. The higher the ratings the more a network can charge for its commercials. And if there is great demand for a cable news channel the subscription fees are likely to be affected.

In a report titled "The State of the News Media 2012" released three months ago, the Pew Research Center's Project for Excellence in Journalism highlighted the strength of the cable news business model. "One reason for the vigor is that the business model of cable news -- in which the cable channels receive half their revenue from fees bundled into monthly cable subscriptions from customers and half from advertising -- has proved over time to be remarkably resilient," the report said, "even as other sectors of the news industry continue to search for sustainable revenue streams."

But total cable news audience growth has pretty much flattened out. The news audience is increasingly more reliant on the Internet and mobile devices for information. Facebook and Twitter are impacting news coverage. And, to reinforce one of Sorkin's points, cable news programming often devolves into mindless chatter, hackneyed talking points and senseless spin. The topics are frequently predictable, the content is repetitive and news stories are often over-hyped.

NYU professor Jay Rosen wrote last year about his frustration with CNN:

"Too often, on-air hosts for the network will let someone from one side of a dispute describe the world their way, then let the other side describe the world their way, and when the two worlds, so described, turn out to be incommensurate or even polar opposites, what happens? CNN leaves it there. Viewers are left stranded and helpless. The network appears to inform them that there is no truth, only partisan bull. Is that real journalism?"

While all three of the cable news networks are facing ratings challenges, CNN has fallen and apparently it can't get up. Fox News has cornered the truly devoted conservative viewers, while MSNBC appeals to the liberals. That leaves CNN more or less in the middle trying to be all things to everybody in order to hang on to their loyal following. They seem to have lost their identity. Their programming strategy appears ad hoc, and their day-to-day production is uneven. CNN has one star, Anderson Cooper, but he is being misused. In fact, CNN only does well in the ratings when there is breaking news, but recently Fox News has been winning this category too.

Last month Turner Broadcasting President and CEO Phil Kent described some of CNN's problems as "self inflicted." CNN reports to Kent, so it was particularly noteworthy when he said, "We haven't put the best shows on the air." That's for sure, and nothing erodes viewer loyalty more quickly than poorly produced shows.

CNN can improve their current ratings performance just by increasing its original reporting, improving its writing and story-telling, focusing on more relevant stories and helping viewers understand why they should care about the issues it highlights. It can improve ratings by pursuing impactful investigative reports, challenging talking points and spin during newsmaker interviews, replacing some of its overused contributors, doing a better job of designing and executing programs, providing better teases, intros and tags, adding extra value in every report and using some imagination. These steps will give viewers more of a reason to watch CNN for longer periods of time at a sitting, and reason to return again more frequently each week.

At the same time CNN should think about a longer-term strategy. What new approach can it take to ensure its viability in the rapidly changing media landscape over the long haul? The times they are a changing.

Aaron Sorkin is a bold creator and a brilliant storyteller who produces with swagger and purpose, and casts his productions with strong and powerful talent. CNN is a fabulous news organization with many wonderful professionals. Perhaps there is a message in The Newsroom for CNN afterall.