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Mon 27 Dec 2010 12:00 AM

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Presidential sweet

When Barack Obama wanted to reach out to a global audience, he called CNBC. President and CEO Mark Hoffman tells Ed Attwood what makes the network such a unique proposition for the planet’s most powerful people, and how it has emerged rejuvenated from the global recession. Take heed, the Middle East: what may appear a stateside affair is a lesson in how to make the news of the world.

Presidential sweet
Hoffman stresses the importance of being where the action is, in person.

It’s any TV network’s dream. Out of the blue comes a call
from the sitting president of the US, requesting a town-hall-style
chat with one of your lead anchors on an hour-long prime time special. Mark
Hoffman, president and CEO of CNBC, isn’t about to hand out tips to enquiring
hacks about how to get that all-important interview with Barack Obama, but the
truth is that Obama’s decision to plump for CNBC over the host of other US
networks may well have been an obvious one.

“There’s a standing request from almost every US domestic
news organisation to interview the president, and I think we offered a unique proposition,”
Hoffman smiles. “An hour of time, commercial-free, for an audience that is very
hard to reach in the populist media. I think the time was right for the White
House to do that and I think it was very effective for them and very effective
for us as well.”

So how did the network emerge as the medium of choice for
the world’s most powerful men and women? Well, original content has certainly
been a big draw. On all its platforms, CNBC is now interviewing just under a
thousand people a week. That mass of original content – both opinion and fact –
has fast become must-see material for that small percentage of the planet’s
population that moves the levers of international industry.

“There is a fundamental concept in business buyers and
sellers, fear and greed, and at the cross-section of that is truth,” Hoffman
points out. “The market figures it out and it’s our job to try and help the
business community and investors rationalise some of that information –
certainly not all of it, but a good chunk of it.”

But the firm also seems to be one of the few to be emerging
from the global recession with its credit intact. The reason? During Wall
Street’s toughest times – including the Lehman Brothers collapse – millions
tuned in to watch CNBC’s anchors and reporters provide blanket coverage of the
action. In the period since then, TV numbers may have subsided to an extent,
but Hoffman is certain that the network’s target audience has grown.

“I would say that we have a core audience around the world.
What happens is that in times of crisis, that audience tends to spend more time
with us,” he explains. “So at least in places where the audience is measured,
it looks like the audience grew. Although there is a populist phenomenon, this
is a relatively niche brand of content and in crises, I think you see a more
populist participation with the content, and then as crises settle, or
ameliorate, audiences tend to do the same.”

However, on the digital side Hoffman is far more confident
that new users who flocked to the website, during the more dramatic
points of the credit crisis, have opted to stay. He estimates that traffic to
the website doubled or tripled in the heart of the crisis, and has “more than
doubled” in comparison to the previous period, even when the big stories had
somewhat settled down. The CEO puts this down to the power of the television
brand pushing views to sample new media extensions and staying with them.

Part of the reason behind CNBC’s enduring financial success
– Hoffman says it is on track to post a fifth year of record-breaking profits –
is the make-up of its viewers. He describes them as “literally the most
educated and affluent viewers in the world”, a formidable and tough-to-reach
grouping that advertisers are happy to pay big bucks to target.

“We’re not focused on being all things to all audiences.
We’re really focused on being a particular brand of content, which yields an
affluent, highly educated slice of the media pie and that’s been a strategy
that has been highly monetisable,” the CEO says. “It’s an audience that’s very
tricky for advertisers to find – and we’ve found that living in that space has
made us absolutely appropriate and necessary when advertisers are looking for that audience.”

Back in the Middle East, however, and Hoffman is visiting Bahrain to mark the opening of CNBC’s latest
bureau, which complements the existing CNBC Arabiya (Arabic language) office in
Dubai. It’s all
part of a worldwide strategy that attempts to position CNBC in as many business
markets as possible. Alongside English-language channels, the company is
working on local language franchises, of which there are now 12.

“We want to be in countries, cities and regions that have a
financial impact and this fits in with what we’ve done in the last few months,”
says Hoffman. “From the beginning of the year, we’ve opened up a
Korean-language channel in Seoul and we’ve also
added a regular report on China
that accesses 400m homes. It’s all part of a global strategy to be where the
news is.”

The network’s recent moves suggest a focus on emerging
economies, and the CEO says the strategy has already produced strong editorial
dividends. With regards to the Bahrain
bureau, the seven-strong team will produce a monthly programme about the
region, as well as filing daily, on a tri-anchored programmed based in Singapore, London
and Manama.
Hoffman will not be drawn on how the bureau will grow over time, or indeed the
amount of capital CNBC has invested in its latest venture, but he does say the
firm “has committed in a substantial way”.

For Middle Eastern businesses, the new bureau could provide
a great window on the region for the rest of the world. Hoffman is keen that
local firms should take advantage of local programming to broadcast the Gulf’s
story outside the Middle East.

“It’s what’s happening here regionally, with companies,
investors, with the puts and takes of finances – and the region is getting
exposure globally on a daily basis,” he says. “We welcome business
participation from the region in the concept we’re creating. We’re looking to
tell the Middle East business story to the
rest of the world – that’s why we’re here.”

From the outside perspective, Hoffman says that external
interest in the Middle East is growing
considerably, with key players keen to know the major investment plays taking
place inside the region. The Bahrain
office simply ensures a complementary offering for the region. While CNBC
Arabiya tells the Middle East’s story to the Middle East, English-language CNBC
International will tell the world’s story to the Middle East, and vice versa.

“There will be a tremendous amount of travel out of here,
using it as a hub or a base of operation. The concept we look at everywhere is
content that is critical to business and investors,” the CEO says. “That’s a
general view, and you’ll find that everywhere we go. That’s a very nice thing
about CNBC as a brand – it is consistent editorially around the world, and it’s
consistent with who watches it and uses it.”

Elsewhere in the world, CNBC has also leveraged strong
relationships with other content providers, such as Dow Jones, Yahoo! and the
New York Times in the US, as well as with other firms in the US and Asia.
Hoffman doesn’t say whether the company is planning a similar sort of
partnership with providers in the region, but if the opportunity arises, it’s
surely something that CNBC will consider.

“In many cases it’s an exchange of content – which is really
the way of the world now – it’s how digital operates,” the CEO says. “We place
some content with New York Times – they place some with us, and it brings
people from the New York Times to CNBC and there’s an extensive video section
on the New York Times website which brings consumers back to us. Just the
syndication of content, especially on the digital side, is a big piece of the

Hoffman is also considering newer technologies, such as
mobile streaming, that have thus far failed to really get off the ground in the
Middle East. CNBC may have a subscription
mobile product elsewhere in the world, as well as facility that allows viewers
to stream English-language content via the website. Plans are not definite as
yet, but the CEO says that the firm is making sure it is resourced
appropriately to ensure it will be in a position to implement those
technologies should the need arise.

Talking of subscriptions, Hoffman also points out that the
issue of paid-for digital content is one that CNBC is looking at closely. Both
in the US and the UK, major
papers such as the Wall Street Journal and the Times have both put up
subscription firewalls over most or all of their online content. It’s caused a
certain amount of consternation on both sides of the Atlantic,
but is largely being seen as a referendum on whether all news providers will
adopt the same method in the future. The Times recently announced that around
105,000 users had handed over card details to secure access to its site since
July, in comparison to a pre-paywall average of 3.1m unique UK individuals
every month.

“Yes, we’ve looked at it, but we have decided not to turn
over big pieces of the digital puzzle – specifically – into more of a
paid environment,” says Hoffman. “But we will have products that we think are
appropriate that will be ad-free but subscription driven. In the main, we’re
more of an advertising-focused business on the digital side.”

Again, clearly, CNBC’s healthy advertising revenues are
paying off. But when questioned as to how he sees the paid-for digital debate
resolving itself in the future, Hoffman is disarmingly honest.

“I think there are a lot of people who would try to tell you
what the landscape will look like in five years time, but I’m not one of them,
I really don’t have any idea,” he adds. “Look back five years – in the Middle
East, you are working in an environment with a fairly robust print – elsewhere
is the antithesis of that. On the TV side, a two revenue-stream model has been
very effective for us. If we find the right way to do that digitally, we will
attempt to do it there as well.”

For the future, CNBC will continue to commit to the emerging
regions, and the CEO says that there are “a number of spots on our target
list”. As we head into 2011, it’s likely that the firm will try and add another
two or three locations during the course of the next 12 months or so. Certainly
Hoffman recognises that even CNBC can’t afford to rest on its laurels. At any
news organisation, coverage and original content – the more the better – are
key mantras.

“We need to be focused on content that is beyond enterprise;
it needs to be essential and it needs to be new,” he says. “I think there is a
danger in the world of quickly finding content to reach a level of
commoditisation and I think the ability to break news, which is an important
element of CNBC, to instantly react to and get the appropriate divergence of
opinion around things as they
break, is essential. The driving concept behind our editorial is fast,
accurate, actionable and unbiased. If we can achieve those four things, I think
we’ll be in good shape.”