Abnormal Returns is on hiatus this week. However that does not mean that we are content-free. As we did last year, and the year before, we asked a panel of independent finance bloggers a series of (hopefully) provocative questions. We hope you enjoy these posts as much as we do putting them together. Check out answers to yesterday’s question on what the next big financial innovation might be. Feel free to jump in the comments with your own answers to the questions.
Question: Can financial TV (CNBC/BBTV/Fox Business) be fixed? If so, what you do differently if you were in charge? (Answers in no particular order.)
Tom Brakke, tjb research, @researchpuzzler: I’m not sure that it can be fixed. But it can be helped. One small example: Do the equivalent of a Charlie Rose show. Thoughtful, insightful, in-depth interviews that (at least sometimes) get past the marketing spin and “talking your book” to something deeper. The business is full of niches with interesting people and ideas. Wouldn’t it be nice to get a chance to explore some of them every now and then? That never seems to happen on financial TV (although I gave up on it a long time ago).
Morgan Housel, The Motley Fool, @TMFHousel: When Jon Stewart had Jim Cramer on his show a few years ago, Cramer made the point that it’s hard offer valuable programing when you have 17 hours of live TV to fill each day. Stewart replied, “Maybe you could cut down on that?” That’s ultimately what needs to happen to business news (and most online content).
30 years ago there was one hour of market TV per day, and handful of business newspapers and magazines. Today it’s 24 hours of news and an uncountable number of online outlets. What changed isn’t the volume of news, but the volume of drivel and interpretations of irrelevant events that we blow out of proportion.
Realistically, I’d like to see more focus on long-term business news, which Americans are still interested in, and less reactionary coverage to trading and speculation, which they aren’t.
Brian Lund, bclund, @bclund: No, it can never be fixed. Any forum where monetization is driven by ratings is almost surely broken and can rarely be of true value to the viewer, because the best way for producers to drive ratings in to create conflict, putting people on who are on polar opposites of an issue and then letting them berate each other in the most over the top way. It’s the financial version of gladiator fights, giving no value to the audience. The real question should be how can make it so the next generation looks to themselves for financial information instead of the talking heads on TV?
Robert Seawright, Above the Market, @rpseawright: I am often entertained by financial television, and entertainment is what drives ratings. Therefore, in that sense, there is little to fix. I would like less “What’s going to happen today?” and more longer-term analysis, but I suspect that I’m in the minority on that. Moreover, it can be very damaging to the individual investor. From that perspective, financial television can be fixed, but not in a way that would drive ratings success, because good investing for the vast majority of people should be boring and good television can’t be boring.
David Merkel, Aleph Blog, @alephblog: Financial TV is hopeless. Short-signal communications are almost always low value. All the best ideas take time to communicate, and require a lot of thought. Printed text will always beat video; more information per unit of time spent.
Bill Luby, VIX and More, @VIXandMore: I probably average less than an hour of financial news TV per month, but when I do watch, I seem to get more out of the Asian and European versions than their U.S. counterparts. The problem seems to be a mismatch between ratings, content quality and the target audience. If you want to chase ratings, you are going to see something that resembles tabloid TV cross-bred with reality TV that seeks to appeal to a mass audience. If I were in charge, I’d probably create a money-losing venture that focused on in-depth features. Imagine a 60 Minutes of the financial world. Alternatively, I just might leave the camera on Art Cashin all day just for the heck of it…
Dynamic Hedge, Dynamic Hedge, @dynamichedge: The job of the financial media two fold: sell advertising and provide programming. The relationship between these two groups is almost perfect. Viewers want seemingly random market movements and dry financial data explained in an emotionally appealing narrative. Advertisers, predominantly financial service firms, want lots of actionable ideas and opposing viewpoints to generate trade commissions. It’s a bonus if the overall investing process appears so complex that the viewer opts to give up and use one of their more comprehensive financial services.
The result of wanting the mundane explained as narrative is headlines (and segment lead-ins) like: Disappointing reports help push US stocks down and the subsequent Stocks open higher on Wall Street ahead of Fed. Blast those disappointing reports and their linear cause and effect on the stock market! Huzzah the subsequent expectation of a positive report and its opposing effect on the actual reports! Quick, bring in an octobox and find every single angle and opposing viewpoint. Now cut to advertisement for financial services to either “take advantage” of these reports/viewpoints for one low flat rate, or services that have even more professionals make sense of these dueling ideas. Repeat for infinity.
The result is viewers churned to death trying to chase the narrative to the pot of gold at the end of the rainbow, or an abdication of their financial future to the firm with the best retirement fantasy montage (sailboat, vineyard, I’ll take two of both). Both are not optimal outcomes.
As long as humans prefer their information in narrative format and financial service firms have something to sell, we’re going to have this problem. My personal feeling is that none of this is implicit or somehow dishonest or disingenuous. The financial service providers are providing services and so is the financial media. The users of the respective products have the final say on who gets their money and attention. The fact is markets mostly fluctuate day-to-day because of buyers and sellers, unknown to one another, making decisions they feel will better their lot in life for a variety or reasons. If there is a problem with the financial media, it is that the producers are too good at getting into the “variety of reasons”. The only true solution is to ignore these day-to-day happenings. This would result in a lot of dead airtime and will never happen. The way to mitigate the damage to the investing public more responsible voices on air advocating for the viewer (just have to make sure they can hold their own). Remember, the viewer decides whether or not they will pay attention to the Octobox. You can always turn it off.
Jared Woodard, Condor Options, @condoroptions: I’d carve out some grown-up time where the eyeball-maximizing, circus business model gives way to whatever smart guests really want to talk about. Professional jargon is allowed as long as you explain yourself, segments last longer than 30 seconds, and there’s a debate show, like the old Crossfire show on CNN, where you have to present evidence for your conclusions. I would cut out all the goldbug/anti-government stuff, which has limited appeal in a stable economy. Also, I would get Bart Chilton to commit to a regular story time / pop culture review segment.
Kid Dynamite, Kid Dynamite’s World, @kiddynamiteblog: This is related to the mandatory savings question. The answer is NO – financial TV cannot be fixed because people are greedy, stupid, and lazy. Financial TV is catered toward the TELL ME HOW TO MAKE EASY MONEY NOW mentality that dominates the American financial psyche. No one wants to watch intelligent financial discourse – they just want to read 140 character trade recos on Stocktwits…
Josh Brown, The Reformed Broker, @reformedbroker: Duh, the Josh Brown show. And my show is about investing – INVESTING, portfolio management, matching capital with liabilities, retirement income, strategies, probabilistic planning, financial technology breakthroughs and career advice. It is definitely not about stock picks or “trading the news”, there’s plenty of that already.
Thanks to everyone for their participation. Stay tuned for another question tomorrow.