|VYING FOR VIEWERS|
July 12, 1999
The NewsHour Media Unit is funded by a grant from the Pew Charitable Trusts.
DAVID WALKER: Good evening. I'm David Walker.
TERENCE SMITH: When CNN began operations 19 years ago, it seemed a radical notion-- news, 24 hours a day, seven days a week. Who would watch that? Americans-- that's who, lots of them. As the years passed, the audience for all news, all the time, grew.
CNN EMPLOYEE: What router is American on?
CNN EMPLOYEE: How soon do you think that's going to be?
CNN EMPLOYEE: Attention, "Show Biz," That's router 29.
TERENCE SMITH: Especially at moments of crisis, when television becomes something akin to a national nervous system. Perhaps the best example, the 1991 Gulf War, when Americans could watch bombs descending on Baghdad in real time.
MARK JURKOWITZ: It's convinced Americans that this is the place to be in a moment of crisis.
TERENCE SMITH: Mark Jurkowitz covers media for the Boston Globe.
MARK JURKOWITZ: When it's Monica Lewinsky, when it's Littleton, when there's ever a big event now, in the same way that people used to turn on the radio every hour on the hour to get the news headlines, it's become America's headline service.
|America's headline service.|
TERENCE SMITH: In television news, as in life, imitation is the sincerest form of flattery. CNN's success eventually spawned competitors.
BRIAN WILLIAMS: I'm Brian Williams, NBC News, joining you from the MSNBC studios, where -
TERENCE SMITH: In1996, Microsoft and NBC joined forces to create MSNBC.
BRIAN WILLIAMS: It appears that this aircraft somehow exploded in midair.
TERENCE SMITH: Followed that same year by the latest entry, the Fox News Channel. All-news cable has changed not only the nation's news habits, but the news business itself. Since the all-news cable channels are on most of the time in most of the nation's newsrooms, they help set the national news agenda. Newspapers are providing more analysis, and the network news shows more "news you can use" and background, all in an effort to compete with the all-news cable channels. Americans have become accustomed to the instant reporting that is the staple of the cable news channels.
TERENCE SMITH: All-news cable is accused of presenting non-news as news, incremental news as news, moving the story inch by inch.
JUDY WOODRUFF, CNN Prime Anchor: You mean a story in progress, so to speak? Guilty as charged, because that is who we are.
TERENCE SMITH: Judy Woodruff, formerly the NewsHour's chief Washington correspondent, is an anchor with CNN.
JUDY WOODRUFF: This audience understands that the news is an ever-moving target; that at 1 o'clock in the afternoon, you may know 25 percent of the story, and it may be 10 o'clock at night before you've got the whole story, or the next morning. And the audience is comfortable with that, I think.
TERENCE SMITH: But with the arrival of MSNBC and Fox News Channel, the intense competition among the three has changed the look and tone of cable news itself.
BRIT HUME, Fox News Channel: We are on in newsrooms; we are on in politicians' offices; we are -- we do get into the bloodstream, all of us.
TERENCE SMITH: ABC's veteran White House correspondent, Brit Hume, joined the Fox News Channel in December of 1996.
BRIT HUME: There were some assumptions, I think, also that CNN made about how to do it, that the news was going to be the star, and they weren't going to necessarily go for stars. And I think now that there's competition that they're going to have to rethink a lot of that; that they may have to be more lively, more interesting, less gray. They're a little -- the problem is that they're a little dull.
TERENCE SMITH: MSNBC added familiar faces from NBC's network lineup. Brian Williams, Tom Brokaw's heir apparent at "Nightly News," anchors MSNBC's prime-time news show. Williams says cable news gives reporters the one great luxury that network news denies them: Time.
BRIAN WILLIAMS: The White House correspondents will say, "I'm constricted. I had had to throw some stuff out of the half-hour newscast version. Can I lengthen the piece for you?" Come one, come all.
TERENCE SMITH: So that's your advantage, time?
BRIAN WILLIAMS: Yes. I think so, and context, and a different audience.
|The big three: CNN, MSNBC and Fox.|
TERENCE SMITH: In the competition for the cable news audience, there is CNN, and then there are the other two. CNN is carried by virtually every cable system in the country and is available in 75 million homes. MSNBC now reaches some 49 million homes; Fox, 41 million. CNN is ahead in the ratings war as well. In March, for example, CNN reached a 24-hour average of 389,000 households; MSNBC, 138,000; Fox, 102,000. All those figures jumped when the bombing of Yugoslavia began in late March. Kim Hume is Fox News' Washington Bureau Chief. A veteran television news executive, she is Brit Hume's wife.
KIM HUME: In the atmosphere that the news channels are in now, I mean, we are competing, you know, tooth and nail. I mean, we really -- this really matters, because this is survival.
TERENCE SMITH: But audience share is not the only distinction that separates the major cable channels, including the all-business channel CNBC.
REESE SCHONFELD, Founding CEO, CNN: They all have different philosophies.
TERENCE SMITH: Reese Schonfeld is often described as the father of 24- hour news programming.
REESE SCHONFELD: CNN gets the CEO audience; CNBC gets the CFO audience; and Fox and MSNBC seem to be competing for the UFO audience.
TERENCE SMITH: CNN, with correspondents in 34 news bureaus around the world and its availability in many hotel rooms overseas, provides a substantial diet of international news.
CORRESPONDENT: CNN Jerusalem.
TERENCE SMITH: MSNBC and Fox tend to stress domestic events. Except when there's a big story abroad, like the war in Yugoslavia. But observers see an ideological distinction among the channels as well.
REESE SCHONFELD: It's clear that Fox's position is always to be the most furthest to the right.
TERENCE SMITH: Brit Hume does not dispute that, but he says that Fox's ideological tilt is only noticeable in contrast to that of the other news organizations, which he describes as liberal.
BRIT HUME: We're probably noticeably in our coverage to the right of the other news organizations, which puts us, I think, right smack dab in the center.
TERENCE SMITH: Reese Schonfeld believes it's numbers, not ideology, that drives MSNBC.
REESE SCHONFELD: MSNBC will do whatever it takes to get the most audience, and if that includes bringing in Oliver North, that's fine. If they could find some left- wing equivalent of Oliver North, I think they'd hire him in a minute just for the ratings.
TERENCE SMITH: And CNN?
REESE SCHONFELD: CNN is too disorganized, as it always was, to have any real overall direction in terms of politics.
TERENCE SMITH: But 24 hours is a long time to fill in television. The need to fill so much air time inexpensively has led MSNBC and Fox to intensive-- some say, obsessive-- coverage of a single big story.
BILL O'REILLY: Should Ken Starr shut up and quietly slip away into the night?
TERENCE SMITH: The consequence: Endless hours of talk television.
MARK JURKOWITZ: These cable networks are really very much like one of those kind of 1950's monsters that we used to see in the movies that ate Chicago.
SPOKESMAN: Is there enough evidence to charge anyone with the murder of Jonbenet Ramsey?
MARK JURKOWITZ: If you were trying to program it, what would you want to do? Would you want to have to tell 1,000 different stories that day, or do you want to say, "hey, here's the next story that we can essentially beat to a bloody pulp"?
TERENCE SMITH: And the stock in trade is verbal warfare. (Everyone shouting at once)
FOX MODERATOR: Dick and Heather, please -- nobody's getting heard. Everybody's talking at once.
MARK JURKOWITZ: It is very much professional wrestling. Let's call it the argumentative version of professional wrestling without the actual head butts and the flying blood.
MSNBC MODERATOR: When we come back, I'll introduce you to the guests, a fine and combative panel today.
TERENCE SMITH: Critics complain that endless talk takes time and assets away from stories that are difficult or expensive to cover. But cable news proponents say the critics are ignoring the sheer quantity of hard news they do provide, coverage that far surpasses anything on network television.
BRIAN WILLIAMS: "Food fight" has become the pejorative of the moment. The "Brady Bunch" boxes of four-way debates have become the vehicle of the moment for this medium, when we're not doing a straight recitation of the day's events, when we're not going to NBC news correspondents. Again, television critics see that, not the fact that in the average hour, we're going to Andrea Mitchell at the State Department, Bob Hager over at Transportation, Claire Shipman and David Bloom at the White House.
TERENCE SMITH: Kim Hume says viewers respond to the mix.
KIM HUME: We do a headline service for three or four minutes at the top and bottom of every hour, and then in the half hour in between the newscast, we deal with the story of the day, the most interesting, most compelling thing that we can find to put on the screen. And it really works, because that's what a viewer is interested in. They're looking for something compelling.
TERENCE SMITH: CNN officials admit that they can feel the hot breath of competition from MSNBC and Fox, but Judy Woodruff says the audience tends to come back to CNN when real news breaks.
JUDY WOODRUFF: When something important comes along, they're going to turn to you; they're going to come back to you, because they know that's where they can count on the information that they're getting, because you didn't succumb along the way every day to whatever the lowest common denominator was.
TERENCE SMITH: As business ventures, cable news channels can be winners and losers. CNN lost money for years, but reportedly made more than $250 million last year. MSNBC, in which Microsoft has invested close to half a billion dollars, lost an estimated $40 million in 1998. The network claims it will make a profit by 2000 or 2001. And Fox News Channel, part of Rupert Murdoch's media empire, still runs seriously in the red.
TERENCE SMITH: Does this operation make money?
BRIT HUME: No. This operation loses money. It doesn't lose nearly as much as it did at first, and it's -- well, it's hit all its projections in terms of, you know, turning a profit, but it's - it will lose money now, and we expect for a couple more years.
TERENCE SMITH: What does it lose in a year?
BRIT HUME: I think it's losing about $80 million to $90 million a year. Even for Rupert Murdoch, that's not pocket change.
TERENCE SMITH: Boston University Economics Professor Michael Salinger has consulted for the cable industry. He says the prestige of owning a cable news operation is not enough to justify such losses.
MICHAEL SALINGER, Boston University: Simply because they have the money to spend on it doesn't mean that big companies are going to be willing to lose money, after all. They have shareholders to report to, and that's the money of the shareholders going down the drain.
TERENCE SMITH: Salinger says in a billion- dollar industry, cable news operations do not need huge numbers to be profitable.
MICHAEL SALINGER: If there are 100 million television households, if you get 1 percent, that's a million households, and that's not a small number.
TERENCE SMITH: As CNN has demonstrated, there is money to be made in all-news cable, but is there room for three such channels? Will one conglomerate gobble up the channel of another? Not even the experts know for sure. But one thing is certain: Americans have come to expect news on demand. Radical as that notion may have seemed two decades ago, it's become a permanent part of the nation's news landscape.
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