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NBC-MICROSOFT NEWS VENTURE
DECEMBER 14, 1995
TRANSCRIPT
NBC, and computer giant, Microsoft announced plans for a 24-hour cable TV news service, and a companion information service on-line . Margaret Warner talks with Jane Hall, media reporter for the "Los Angeles Times."
MARGARET WARNER: Welcome, Ms. Hall.
JANE HALL: (New York) Thank you.
MARGARET WARNER: All right. Microsoft's going to invest something like over $400 million over the next five years in this, NBC half that. What are the economic prospects of this project for these two companies?
MS. HALL: Well, I think long-term the economic prospects for the on-line service wants--they're counting on PC's, the growth of PC's. It'll be small in the beginning, because they are counting on high speed modems that most people don't have, but eventually, I think this is probably the more exciting part of a venture. I don't know what the predictions would be, but in terms of cable news, CNN made $240 million in profit last year, and that's why everybody wants to do that. That's why people--people see that and say, let's see if we can get a piece of that. But I actually think the computer piece is the more exciting, and, and the more interesting idea that NBC has.
MARGARET WARNER: Well, let me ask you first one or two questions about the cable TV part, the 24- hour news service. As you said, CNN made $240 million, but their market really isn't that big. Is the audience out there big enough to support now that there will be three of them, ABC, this NBC-Microsoft, and CNN?
MS. HALL: Well, I think it's an interesting question. People I've talked to say there's probably room for two. They don't know if there's room for three. And Rupert Murdoch, I think, is flirting with it, as you said, but doesn't have a domestic news division. This is a very big factor, as you probably know, abroad. CNN is in every embassy, every hotel room. They have a hundred million subscribers abroad, and sixty-seven million here. What happens in terms of audience is that during the Gulf War or another crisis, their audience goes way up, and then it goes down. So in terms of the niche, they're going to be splitting a small audience, but there is a lot of advertising revenue to be had from this. And the potential is there.
MARGARET WARNER: And is it bigger? Are you saying it's bigger internationally potentially than it is domestically?
MS. HALL: Yes, it is. There are a lot of countries that are just now getting CNBC abroad, NBC is taking its programming abroad, they're buying pieces of foreign operations, such as the super channel. That's where the growth, I think, will be probably.
MARGARET WARNER: Okay. Now, let's talk to the--talk about the on-line service which I know you think is really more interesting. What are people going to see on this new on-line--you don't call it a channel--but service?
MS. HALL: Well, when--as I say, you can't really get this now, but eventually, you could watch the NBC Nightly News and see Tom Brokaw talking about the budget crisis and then you could go to your personal computer and call up information on the pros and cons, interviews that they'd done say with Sen. Pete Domenici and Tom Daschle on the opposite side of these issues, you could call up footage, you could enter personal information about yourself. It could be very, very interesting. You could personalize the news. That's the idea. Now, again, this is not yet available because there aren't the modems for the full speed video that this would require.
MARGARET WARNER: In other words, what you're saying is right now most people's computers can't handle really sophisticated video?
MS. HALL: Right, right. But the feeling is that this will grow. They are betting that this will grow, and for Microsoft, this gives them access to content. That's why I think, Margaret, they're in this business. They want content that will hopefully drive people being interested in the whole area of PC's. They want the brand names of NBC basically.
MARGARET WARNER: And NBC, I gather, is going to do all the news gathering. It's going to be the news operation for both of these services?
MS. HALL: Right. NBC will have editorial control, and, you know, the interesting thing is one of the reasons all of the broadcast networks are interested in getting into this is that they're already doing this. During a crisis, Peter Jennings is on the air for a certain time and then they have entertainment programming, so the thinking is they can amortize--I mean, these are their words-- amortize their news gathering, use footage they're already gathering from their affiliates. But this is not at all assured that, you know, these are going to be successful ventures.
MARGARET WARNER: And then what exactly, though, would be the interactive part of the on-line news?
MS. HALL: Well, as I say, you could enter information, you could get footage. Interactive is in the sense that you interact with your computer and you can--you can customize what you want to know basically. That's the interactive possibility of it at this point.
MARGARET WARNER: But you don't see them putting NBC News on computer?
MS. HALL: Well, I'm not sure exactly how that would work. NBC--you mean the nightly newscast?
MARGARET WARNER: The nightly news.
MS. HALL: Well, I don't know. CNN now has pieces of their newscasts on a home page. I suppose in theory you could put the entire nightly newscast. I think the idea is for this to be an ancillary thing that you can--you can add to, you can bring your own needs to, rather than simply watching the newscast. It wouldn't be--it wouldn't be very efficient to put the whole newscast on computer, I don't think.
MARGARET WARNER: Well, thank you, Ms. Hall, very much. I'm sure we'll be back to discuss it again. Thanks.
MS. HALL: Thank you.
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