ELIZABETH FARNSWORTH: Next, the field grows more crowded in the 24-hour news business. We begin with some background.
ANNOUNCER: Good morning. Welcome to Fox News Channel.
ANCHOR: This is Fox News now, all the news you need in 15 minutes.
ELIZABETH FARNSWORTH: This week, the Fox News Channel, or FNC, went on the air. It's the latest round-the-clock news organization offering hourly newscasts, analysis, and interviews. Owned by Rupert Murdoch's Fox Corp., FNC joins a crowded field.
ELIZABETH FARNSWORTH: It's been sixteen years since the grandfather of the all news network, CNN, launched its operation.
BERNARD SHAW, CNN: The skies over Baghdad have been illuminated. We're seeing bright flashes going off all over the sky.
ELIZABETH FARNSWORTH: World crises such as the Gulf War and the collapse of the Soviet Union have sparked the nation's appetite for news and at such times, CNN's ratings have risen dramatically.
SPOKESMAN: You're watching CNN, the world's most important network.
ELIZABETH FARNSWORTH: Over the years, CNN has grown to include other cable channels, such as Headline News, CNN Financial News, and soon CNN Sports, plus their online service, CNN Interactive. Last year, ABC and NBC announced they would challenge CNN's dominance of the all-news market, but then ABC withdrew when its losses over the first five years were projected at $1/2 billion.
SPOKESMAN: You're connected to MSNBC.
ELIZABETH FARNSWORTH: NBC's cable news channel, MSNBC, a joint venture with Microsoft, went on the air three months ago. It offers viewers a combination of seasoned NBC reporters, youthful commentators, and on-line information. The all-news ventures must compete with C-Span, which focuses on covering Congress, with Court TV, and with more than a dozen regional all-news channels, such as New York One in New York City, News Channel Eight in Washington, Chicago Land Television, and Bay TV in San Francisco.
SPOKESMAN: Welcome back to Fox in-depth.
ELIZABETH FARNSWORTH: There has been some speculation in the press that Fox News Channel will reflect the conservative political views of its owner, Rupert Murdoch, who has called CNN "too liberal." But Fox executives insist the channel will be there and balanced.
ROGER AILES, President Fox News: The American people are very smart. They know the difference between news, facts, analysis, commentary, opinion, spin, and BS. The others news organizations won't tell you the difference; we will.
RUPERT MURDOCH, Owner, Fox Broadcasting: Our goal is to have more facts and to be first, but our absolute promise is to be fair.
ELIZABETH FARNSWORTH: Fox's main challenge now is to get local cable operators to carry the new FNC. Those operators have a limited number of available channels. Adding Fox to the lineup may mean dropping something else, and in New York, Fox's headquarters, a struggle is underway with Time-Warner, which is carrying MSNBC, but so far has refused to carry FNC. As of now, the Fox News Channel will reach just 17 million households, compared to MSNBC's 25 million and CNN's 70 million.
ELIZABETH FARNSWORTH: The number of actual viewers at any given time, though, is far smaller than the number of households subscribing to cable. For example, CNN gets about 400,000 American viewers in an average hour. Here to give us some perspective on the 24-hour news phenomenon are two media watchers, Ken Auletta of The New Yorker Magazine and David Shaw of the Los Angeles Times. Thank you both for being with us. And beginning with you, Ken Auletta, does the market exist for three cable news channels?
KEN AULETTA, The New Yorker: (New York) That's a real question. The number--if you assume that the pie will not grow, that they will be splitting the CNN pie of four--you say four hundred thousand--four to six hundred thousand on an average hour, more if there's a crisis, if that pie doesn't grow and you have to split it three ways, then it's hard to see how the three networks, if they split it equally, will make money. If, on the other hand, you assume that the pie will grow, as Mr. Murdoch does, he assumes it will double, then, in fact, you may be able to make money, depending on whether others get into the game as well.
ELIZABETH FARNSWORTH: David Shaw, did Rupert Murdoch go in this mostly for money, or are there a lot of other considerations here?
DAVID SHAW, Los Angeles Times: (Los Angeles) Well, I'm neither a mind reader or a psychiatrist, but he's a very successful and very shrewd businessman. He also is somebody who has both a political agenda and a large ego, and I would assume that all three of those are factors in his decision.
ELIZABETH FARNSWORTH: Ken Auletta, do you have anything to add to that? I know you've spoken to him fairly recently.
MR. AULETTA: As has David. I agree with David. I think people do things for multiple motivations but one of the motivations, the first one that, that you mentioned and David mentioned, it should be noted that Murdoch has been willing in the past to lose money on behalf of news. He loses ten to fifteen million dollars a year by keeping alive the "New York Post," but he enjoys it, and it gives him a leverage and a platform in the capital of the United States.
ELIZABETH FARNSWORTH: Is CNN profitable at this point.
MR. AULETTA: CNN is very profitable. In fact, CNN is more profitable than the three network news divisions combined right now, but they've always been alone, and now they're going to have potential competition.
ELIZABETH FARNSWORTH: How is MSNBC looking so far? I know that there has to be patience, and they all say that you can't--you can't be profitable right away, but how's it doing?
MR. AULETTA: Well, I mean, as--if you look at the product, the product is fine. I mean, they are doing some interesting things. They have glitches, sure, they're doing some interesting thing, but the average national audience for, for MSNBC is probably smaller than the average audience for a New York City local news operation.
ELIZABETH FARNSWORTH: David Shaw, what is the significance of having a 24 hour news broadcast? Is it something that if you're a global player in the way that Rupert Murdoch is you just have to have?
MR. SHAW: Well, I think that that's true. I think that he wants to have this presence. I think that he wants to be able to provide news 24 hours a day and then get the respectability and the access that goes with that, and I think he wants to provide this service to some of his clients abroad. But I think there's, you know, a greater concern about impact of--the 24 hour news on all three channels competing with each other, and the increased priority that this seems to place on speed at the expense often of responsibility and accuracy.
ELIZABETH FARNSWORTH: So you think that 24-hour phenomenon has made that problem worse?
MR. SHAW: Oh, I don't think there's any question about it. I mean, you can certainly look back to the last presidential election when Gennifer Flowers came out with her accusations in a supermarket tabloid about an affair with President Clinton. Um, in times gone by, that probably would have been largely ignored, but because CNN went live with a press conference, with candidate Clinton denying it, that more or less forced other major news organizations to go with the story, rather than waiting to do their own reporting and find out if it had any validity.
MR. AULETTA: There's a lot of complaint, if you talk to candidates about the press filter function, that the press gets in the way, but actually this is an example of where the filter is needed because when you have a network newscast that is not live or you have a newspaper that is not live, that tapes things, or has time for editors to filter it through and to consider calmly is this a story we want to put on the air or we want to publish tomorrow morning, you don't have that filter when you have live television, and that's a real danger.
ELIZABETH FARNSWORTH: Do you think--what other--what else--what other kind of impact has--have CNN and MSNBC had on journalism, Ken?
MR. AULETTA: Well, it's had some positive impact in that you, you can get--viewers can get information all the time when they want it. They don't have to wait for the morning's newspaper and arguably, it makes some of the morning newspapers better because the newspaper, instead of reporting just what happened yesterday, which the viewer or reader already knows about, they can give him more context, and that is a positive in many respects but also, on the other hand, it leads to more news analysis and more dilution--
MR. SHAW: I'm sorry.
ELIZABETH FARNSWORTH: Yes, go ahead, David Shaw.
MR. AULETTA: I'm done.
MR. SHAW: You also have the problem that I think CNN, in particular, because it has done by and large I think a good, responsible job, has come to be a player in the diplomatic arena. I mean, there are world leaders who make decisions based on how it's going to look on CNN who are actually watching what's happening on CNN. I think there's some question in some quarters about whether we want the news media to become that much of an activist in the, in the international diplomatic arena.
ELIZABETH FARNSWORTH: Ken Auletta, you heard Roger Ailes say that Fox will try to be fair, and you heard Rupert Murdoch say that too. Rupert Murdoch does own a wide range of media. What do you think the chances are that Fox will be fair and unbiased?
MR. AULETTA: Well, it depends on which model you use. If you use the model of say the New York Post or the, or the Sun in London and some of those Australian newspapers, you'd have to say that he will use them as partisan platforms. If, on the other hand, you use the example of, of the national newspaper in Australia, which he started, which is very fair-minded, or The Times of London, you'd have to say that he is capable of presenting fair and balanced news. But, in general, Mr. Murdoch's record in this regard is not encouraging. On the other hand, he has vowed, as has Mr. Ailes, that they will do different this time, and the proof will be in the putting.
ELIZABETH FARNSWORTH: David Shaw, do you have anything to add to that?
MR. SHAW: Oh, I think Ken analyzed it correctly. My only question is it'll depend on what priorities he's going to place on this all-news channel, the specific reason why he's done some of the things he has done with the "New York Post" as opposed to letting alone the "City Village Voice" when he owned it. I think it'll depend on whom he wants to reach and what also, what he thinks he can get away with. He's going to get a lot more scrutiny on this news channel, I think, than he would have had on some of his other news organizations and publications.
ELIZABETH FARNSWORTH: David Shaw, is there enough programming? Is enough happening that these three all-news channels and the local ones around the country can actually be different from each other, or are they just going to start looking an awful lot alike?
MR. SHAW: Well, I remember that in the days immediately preceding the start-up of CNN, there were rumors that Ted Turner would have to buy up a lot of dilapidated hotels in South America and sent them on fire every few days just to have enough news to fill 24 hours. I mean, it turned out that we live in a world that generates a lot of news, and that was not necessarily the case, but I don't think that these three all-news networks are going to be able to differentiate themselves so greatly that it'll be different news. It'll be the same news packaged perhaps differently, maybe with different commentators. I mean, so far CNN has managed to get by without creating the level of star system that you see at ABC, NBC, and CBS. That may be one of the things that, that Fox or CNN or MSNBC will have to do to differentiate themselves. They may have to do it with name as well as with product.
ELIZABETH FARNSWORTH: Ken, what about that, do you think they might have to do that?
MR. AULETTA: I think they will try and differentiate themselves with brand name stars or personalities, but I think there's a danger here, and that is that one of these people, and Mr. Murdoch would be the most likely candidate to do this, will go down market, will decide to do more infotainment, more tawdry stuff as the "National Enquirer's" opening up a Washington office, the equivalent of that could take place in all news, and that's a real danger because you would you say we need to expand that pie, there are too few people consuming it, and therefore, one surefire way to expand it is to have more salacious news.
ELIZABETH FARNSWORTH: Ken--go ahead, David.
MR. SHAW: I was going to say I think that's an absolute likelihood. Certainly that's been one of the formulas for his success with his newspapers, and since most of the major news organizations, or at least many of them, have already become somewhat more sensational, somewhat more trivialized as witnessed, everything from, you know, the Menendez Brothers to John and Loraina Bobbitt to Heidi Fleisch, to O.J., O.J. morning, noon, and Nightline, I think that there's--as the market fragments and as television networks and newspapers and magazines, for that matter, are increasingly concerned about their shriveling audiences, one of the ways to get people into the tent is to do this kind of salacious, sensationalized, trivial, superficial kind of news, and certainly CNN and NBC so far haven't done that. It seems to me that that would be one way that Fox would try to differentiate itself and increase its market quickly.
MR. AULETTA: You had a--
ELIZABETH FARNSWORTH: Ken. Go ahead.
MR. AULETTA: --you had a model of that, by the way, in the O.J. Simpson trial. CNN, as serious and as respectable a news organization as it is, they carried that live, and if you talk privately to people who work for CNN, they were enormously frustrated that they couldn't get stories on from around the world because of O.J..
ELIZABETH FARNSWORTH: Well, Ken Auletta and David Shaw, thanks for being with us.
MR. SHAW: Thank you, Elizabeth.