Financial media a winner during economic crisis

ByABC News
October 25, 2008, 11:01 PM

NEW YORK -- This financial crisis has really redefined the notion of "talking heads." On business news channel CNBC, at any one time, 10 of them can be crowding the screen, to the point that it looks like a school picture come to life.

That's one way the financial-oriented media is trying to capture attention and, during Wall Street's turmoil, squeeze profits from gloom.

Now, 24 hours a day, there are television spots, blog posts and news sites all clamoring for investors' attention. Some say that's only adding to the market's volatility by repeating ideas that often don't deserve mention and giving credibility to sources who pump their own interests.

"What the 24-hour news coverage does is it creates the currency of momentum," said Mark Collinson, a partner in CCG Investor Relations. "In the old days, you might have picked up the Wall Street Journal and read about something. Now it's blasted at you 20 times by 5 o'clock."

People are looking for answers. Do they hear only noise?

"If you watch television for anything other than entertainment, then you're losing money," said Barry Ritholz, CEO and director of equity research for Fusion IQ and author of Bailout Nation: How Easy Money Corrupted Wall Street and Shook the World Economy.

Whether propelled primarily by personal or professional investors or merely the curious who are watching the market like a wild sporting event CNBC is on pace to have its best month ever in daytime ratings. The Fox Business Channel, which has struggled to make its presence felt since being launched a year ago, hit the 100,000 mark in viewers a few times for the first time ever.

Fox Business decided one Saturday morning, with little promotion, to do a question-and-answer session about the market. Executives were stunned by the volume of phone calls and e-mails, said Kevin Magee, Fox executive vice president in charge of the network.

The popular business blog The Big Picture, run by Ritholz, has seen its traffic double, and had a record-setting September.