This Is CNN

Two weeks ago, Kaplan was "reorganized" out of his job and replaced by an opaque operating committee of Turner Broadcasting executives. The stated reason for Kaplan's dismissal was that ratings were down and that most of CNN's programming seemed devoid of wit or edge. Off the record and on background, CNN executives blamed Kaplan for the network's distress. Needless to say, the truth of the matter was much different from the spin.

This is not to say that Kaplan's tenure at CNN was successful. It wasn't really. It started badly (with the Tailwind documentary fiasco) and skidded sideways thereafter. As in all unhappy regimes, there were "Rick people" and "anti-Rick people" and enough hostility on both sides to make working at CNN a grind. Kaplan's management style did little to assuage these hostilities. Indeed, his temper and impatience probably exacerbated them.

But the signal failure of Kaplan's tenure was not what he did. It was what he didn't do. He didn't break the CNN culture. He didn't attract the most talented people in the business to work at CNN. He didn't significantly upgrade the quality of the programming. He didn't gain control of all the various moving parts of CNN (CNN International, CNN U.S., CNN/SI, CNN. com, CNNfn, etc.) and meld them into a collaborative venture. He didn't hook up with content partners who would have and could have made CNN much smarter and faster. And he didn't spend nearly enough money advertising and marketing CNN to the world.

Kaplan didn't do these things because his corporate superiors didn't want him to and prevented him from doing so. They protected the CNN culture. They wouldn't pay for the most talented people. They wouldn't budget the money required to upgrade programming and maintain CNN's coverage of breaking news. They purposely chopped up the CNN empire into fiefdoms and disallowed any one person from gaining control of the whole. They only entered into strategic partnerships after being acquired by Time Warner and then only with Time Warner properties (and called it "synergy"). Two years ago, they spent exactly $1 million on marketing and advertising. Last year, their first-ever major ad campaign cost $15 million. But that still pales in comparison to the marketing budgets of Yahoo! or AOL.

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Take them one at a time. The CNN culture is sort of retro-Southern gothic. Most of the people who work there have never worked anywhere else. They see themselves as Georgians doing battle with hostile Northern forces. When they first started, they were the Jedi against the evil New York network empires. As they came of age, they slowly became an essential news source. The high-water mark was probably the period from the Gulf War through the 1992 presidential campaign. At that time, you couldn't follow the news without CNN, because what was important happened on their air.

But the CNN culture didn't change. Indeed, success made it worse. Insularity combined with self-satisfaction to produce the worst of both worlds: arrogant stupidity. And by 1996, the competitive set had changed dramatically. Instead of having no competition, CNN suddenly had two ferocious competitors: Fox News Channel and MSNBC. Instead of having no alternative media in its space, CNN suddenly had the Internet in its face. The impact was immediate and dramatic. Ratings slid, best customers left and all the while the CNN culture pretended that nothing had changed.

Kaplan's hiring was motivated in part by a hiring crisis. With more and more young talent going to the Internet and with veteran talent now being courted by Fox News Channel and MSNBC, the addition of Kaplan was seen as a way to attract proven talent to the CNN team. Kaplan was a great television news producer. CNN had all the time in the world to fill up with programming. It seemed like a good idea at the time.

In the event, Kaplan did hire Jeff Greenfield away from ABC News, but that was about as far as he got. No one else signed on, in part because Kaplan couldn't offer them better salaries and in part because the CNN culture was so off-putting. Fox News Channel and MSNBC had the added advantage of being based in the New York metropolitan area, which made it easier for people who had lives here to do something new without having to move to Atlanta. The great talent migration never occurred.

CNN was also averse to paying for programming. The ideal CNN program was one studio, a gaggle of gasbags and (hopefully) a hot story. It was cost-effective to the max and it worked just fine so long as CNN was a monopoly provider and hot stories (Gulf War, OJ, plane crashes, etc.) broke out intermittently. It ceased working when competition arrived. CNN's response was that the competition was "tacky" and "only for Internet geeks." This is the dictionary definition of "sticking your head in the sand."

Bad as the talent/investment problem was, it paled in contrast to CNN's ridiculous management structure. The notion that CNN.com was a discrete entity and that it was separate and apart from CNN "domestic" and CNN "international" and CNN "financial news" and all the rest was beyond stupid. But there it was. Kaplan loyalists, after a week in Atlanta, would return to dinner parties in New York and Washington and tear their hair out when discussing the nonintegration of CNN assets. The new management structure is arguably worse than the previous one, since another layer of bureaucracy has been added to the mix. If CNN wants to compete in the new environment, it will have to integrate all of the moving parts into a cohesive whole, achieving economies of scale along the way. For now, the fiefdoms rule. That is not Rick Kaplan's fault.

The other major downside to fiefdom management is that it gives upstarts the idea that they can deconstruct parts of the CNN model without having to compete with the whole. Thus CNBC and a host of Internet financial news sites eat CNNfn for lunch. Thus ESPN and a host of Internet sports news sites eat CNN/SI for lunch. Thus MSNBC and FNC and a host of Internet news sites eat away at CNN's "domestic" news offerings. CNN's response has been to create more fiefdoms: CNN Airport News, CNN Hotel News. Which would you rather do? Dial up the Internet at the airport and do your e-mail, check your calendar, get the weather forecast and read the news or sit morosely in some plastic chair and watch happy chatters tell you the latest showbiz news?

To compound all these problems, CNN spends very little money promoting itself and marketing its various product offerings. The vast amounts of money Yahoo! and AOL and Lycos and Excite spend promoting their latest offerings and services pays off. Yahoo! has well over 100 million unique site visits every month. AOL has 24 million subscribers. CNN's customer base has eroded substantially over the course of the last 10 years. It's not likely to get better if CNN only promotes itself inside CNN programming and CNN.com.

All is not lost, however. It seems likely that federal regulators will approve AOL's acquisition of Time Warner. Once that happens, there will be new management for all Time Warner properties. AOL might sell CNN for cash. It might try to revivify the CNN brand. The latter seems more likely than the former, since CNN offers priceless leverage in the political sphere.

If AOL decides to "fix" CNN, the first thing they should do is disband the operating committee that replaced Rick Kaplan and install a streamlined management team that understands the reality of the new economy marketplace for news and has the authority to break the CNN culture. Left to its own devices, CNN is on a path to becoming a second-generation CBS News: remembered for its past glory, ignored by all concerned.

A brief note: This is my last column for New York Press, at least for the foreseeable future. My consulting work no longer leaves me enough time to do this job properly. Thank you for reading and thanks especially to Russ Smith for the opportunity to talk to you every two weeks. I enjoyed it.