Why Television Networks Want to Be Like CNN
ABC, FOX, and NBC aim to join in with 24-hour news channels
NEW YORK — WHEN Ted Turner started his 24-hour Cable News Network (CNN) in 1980, it was disparaged in newsrooms across the country as "Chicken Noodle News." Known for its low pay and inexperienced staff, it was dismissed as a minor irritant that would soon vanish.
Fifteen years later, CNN is in 67 million American homes. Its profits are soaring, and its international reach is growing. Suddenly, the network giants who once looked down their well-paid noses at CNN are racing to copy its success.
"Everyone knows there's room for more than one CNN, but nobody knows how many more," says Peter Herford, professor of journalism at Columbia University in New York.
Global media mogul Rupert Murdoch kicked off the latest round of competition two weeks ago at a meeting in Boston by casually mentioning his plans to challenge CNN. Within a week, ABC followed suit with a full-court press conference to announce that its 24-hour news channel would be set to compete by 1997. That prompted NBC to remind a sometimes absent-minded press that it announced plans to start a 24-hour news service last January.
"It really is an enormous number of competitors going into a market that is relatively narrow," says Larry Grossman, the former president of NBC News. "Yet if they want to stay major players in the news services, they really have no choice."
For the consumer, media analysts say, the competition can only improve the quality of TV news. For the networks' news operations, it's a way to strengthen their financial viability, analysts say, particularly now that network audiences are shrinking.
"Network news divisions still don't pay for themselves in terms of the evening newscasts," Mr. Herford says. "This is a way to amortize their product over a larger distribution system."
But their success will depend largely on their ability to get "clearances" (slots) on cable systems. While the technology exists to create 500-channel systems, most cable systems still have 60-100 channels, and most of them are full.
"One of the key reasons The Monitor Channel didn't succeed was the difficulty we had in securing clearances on various cable systems," says David Cook, editor of The Christian Science Monitor. He headed up the Monitor's failed 24-hour cable-news venture five years ago.
In the mid-1980s, NBC also eyed a 24-hour cable news operation. In fact, the network tried to buy a stake in Mr. Turner's CNN, which was faltering financially. But according to Mr. Grossman, NBC - believing that CNN would never make a profit - refused to meet Turner's price.
Turner then persuaded the nation's two largest cable-system operators to invest. Time Warner (which recently announced plans to buy all of Turner Broadcasting) and TeleCommunications International (TCI) control more than 50 percent of the nation's cable systems. The investment gave them a financial interest in ensuring that CNN had no competitors.
"That also ensured that we couldn't start our own 24-hour news channel then," says Grossman, who notes that NBC's cable venture CNBC gained access only after pledging to focus on financial news.
During its press conference last week, ABC officials were vague about their distribution plans, except to say that discussions with Time Warner and TCI were under way. Some analysts think Capital Cities/ABC has the clout it needs to gain access to the cable systems, particularly because it owns controlling interests in ESPN, A&E, and the Lifetime channel. That clout is enhanced by Disney's intention to buy ABC.
But not all analysts are sanguine about its success.
"ABC is known for its very high-quality news operation, so anything they do on a 24-hour basis is a net gain for the public," says Everette Dennis, executive director of The Freedom Forum, a media-studies foundation in New York. "But if the public can't get it, it's pointless no matter how good it is."
While NBC network officials are not commenting on specifics, cable access would likely be a key element in their plans as well. NBC is reportedly also negotiating with the Microsoft Corporation to become an equity partner. That alliance could allow the network to bypass cable distribution and access homes via the Internet.
Alliances with direct-broadcast-satellite providers like RCA are another way NBC and ABC could bypass cable.
While all three challengers were vague in discussing their plans, none was more so than Fox's Rupert Murdoch. According to a spokeswoman, the Australian was speaking extemporaneously when he threw down the gauntlet to Turner's CNN. She says Murdoch has no "immediate" plans to start a domestic 24-hour news channel.
"I'm not going to disregard the possibility for some future competition," says Steve Hayworth, CNN's vice president for public affairs, who finds all the talk of competition "healthy."