Word Spy - CNN effect

CNN effect

(SEE.en.en uh.fekt) n. The negative effect on the economy caused by people staying home to watch CNN or some other news source during a crisis such as a war.

Example Citation:

Analysts will pay close attention to any outlook from retailers about consumer spending, which drives two-thirds of the economy. But most do not expect stellar results after Target Corp. and Wal-Mart Stores Inc. reported weak sales earlier this week, citing the Iraq war and poor consumer confidence.

"We could see some more profit taking as retailers release somewhat tepid results, since the quarter included bad winter weather and the CNN effect," said Tim Ghriskey of Ghriskey Capital Partners, a money manager in Bedford Hills, N.Y. "The CNN effect" refers to consumers who stayed home to watch coverage of the war in Iraq instead of going out and spending.
—"Leading Indicators Index to Be Posted," Los Angeles Times, May 19, 2003

Earliest Citation:

Frightened by the threat of terrorism and preoccupied with the war against Iraq, Americans are canceling vacation plans and choosing to stay close to home. ...

Concern about flying anywhere is the reason most often given for canceling trips. But some people say they are staying home for other reasons as well. Some potential travelers are riveted to their television sets, captivated by the constant news reports about the war, a condition that some people are calling the "CNN effect."
—Eben Shapiro, "Fear of terrorism is curbing travel," The New York Times, January 28, 1991

Notes:

This phrase is based on a simple premise: if a large percentage of the population is glued to their television sets during a crisis situation, then consumer spending will suffer accordingly. Naming this effect after CNN is based on the remarkable viewership numbers that network pulled in during the first Gulf war. It's no longer all that accurate, however, since Fox News drew more viewers than CNN during Gulf War II (or Dubya Dubya II, as some wags have called it).

Categories:

Economics
Retail
Effects
Television
Military

Posted on July 23, 2003