tuning out

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CNBC Ratings Prove Investors Just Don’t Care

I am fascinated with the stock market and with media — not just because both are passions of mine, but also because both fields are very much in the midst of a painful transition. So it’s fun to find areas where these two spheres of influence overlap.

And that’s just what I found when perusing the recent ratings for CNBC and Fox Business Network.

The Nielsen Media Research numbers for CNBC and FBN this May (well, the end of the May reporting period even if the calendar month isn’t finished yet) tell an interesting story. Namely, that most people might not want or — dare I say it — need financial media as much in 2013.

And frankly, if you’re tuning out CNBC and forgoing stock picking in favor of a low-cost index fund, then you deserve a round of applause.

As a pundit, stock picker and market windbag myself, this is almost sacrilegious to say. But I’ll do it anyway.

Consider that May was CNBC’s lowest-rated month in total viewers since April 2005. That’s seven years! Meanwhile, in case you’re wondering, the S&P 500 is up 37% since 2005 and more than 16% year-to-date.

And lest you think Fox Business Network was sucking up all those lost viewers, even FBN saw declines year-over-year in many time slots.

Here are the Nielsen comparisons for this May:

  • 6 to 9:15 a.m.: CNBC ratings rolled back 13% overall and 31% in the 25-54 age group, comparing May 2012 to May 2013. Fox Business Network was down 19% overall and 12% in the key demographic.
  • 9:30 a.m. to 5 p.m.: CNBC dropped 15% overall and 7% in the younger demo. FBN saw a nearly 20% drop in overall ratings, according to Nielsen, but held steady in the younger demo.
  • 5 to 8 p.m.: CNBC ratings dropped 25% overall but actually posted a gain of almost 11% in the key demographic group. FBN slumped about 33% in overall ratings and a painful 59% in the 25 to 54 age group.
  • 8 to 11 p.m.: CNBC ratings plummeted 32% overall and 34% in the 25 to 54 age demo. FBN saw the younger demo roll back but actually saw significant gains in this timeslot with a 42% surge overall.

It’s worth noting that Fox has a much smaller viewership in some of these segments — for instance, it’s 6 a.m. to 9:15 a.m. viewership in the 25-54 age bracket dropped just 1,000 people according to Nielsen from 8,000 in 2012 to 7,000 in 2013… so it doesn’t take a lot to move the needle on a percentage basis. By comparison, CNBC went from 45,000 to 31,000. So keep the scale in mind.

But even so, aside from Fox’s boom in prime time, there isn’t much good news in these ratings for either company.

Investors are tuning out across the board — with some of CNBC’s lost viewers over the last seven years gone forever.

Of course, it’s more than the rise of low-cost index funds that’s killing market punditry in general and hurting CNBC in specific.

The first is, of course, is that Fox Business Network didn’t exist until the end of 2007 — and its launch stole a bunch of viewers.

Then, of course, there’s the financial crisis and resulting washout in investor interest. Why watch any financial network if your family finances stink?

But most damningly, there has been a slow and steady bleed at CNBC that has persisted since 2010 despite improving stability in the stock market and housing market. Even Fox’s initial growth appears to have leveled off.

That makes me wonder whether any growth is left — and whether the “new normal” of current ratings are the best that either network is ever going to do.

Of course, Fox continues to tinker since it’s a young network. Money with Melissa Francis (a steal from CNBC by the way) just got off the ground about a year ago, and a strong showing during election season seemed to power its prime-time lineup — momentum that has continued lately.

But CNBC is now shaking things up too — with a woeful (both in content and ratings) reality show, Crowd Rules, and Kelly Evans now at the anchor desk for CNBC’s flagship Squawk on the Street markets segment. Both moves have been welcomed with declines compared to previous programming.

Specifically, with Evans on board Squawk on the Street is down 20% year over year and 33% in the key 25-54 demographic — and down 11% overall from the average across 2013 before her arrival.

If all this bull market mania and big programming changes can’t result in growth … it makes you wonder whether any growth is to be had. Hell, CNBC aired the NHL playoffs during prime time this month and did the same with the Olympics last summer. Coupled with its reality TV offering, maybe it’s admitting that 24 hours of market news is just too much.

Although I am admittedly part of the frenzied financial media, I have to agree. It’s important to be informed and stay on top of things. But unless you have a passion for the markets like me and truly enjoy this stuff, you’re better off sticking your money in an index fund and tuning out — like so many others.

Which funds? I like the Vanguard 500 Index Fund (VFINX), which charges just $17 per $10,000 invested and gives you built-in diversification so you don’t have to chase individual picks. Or maybe the SPDR S&P 500 ETF (SPY), which charges even less — just $11 per $10,000 invested — and gives you the same “set it and forget it” way to play this bull market.

I’ll keep on running my mouth, and I hope that a small group of interested folks continue to put food on my table. But for those at CNBC who expect things to get back to the go-go days before the crisis, it looks like they’ve got some lean years ahead.

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Jeff Reeves is the editor of InvestorPlace.com. Write him at editor@investorplace.com, follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook.

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