the next big story Cable: NBC and Microsoft race into uncharted territory in a gamble that could change the face of TV news. This, NBC insists, is not CNN.

THE BALTIMORE SUN

MSNBC might sound like something you don't want in your Chinese food, but NBC and Microsoft are betting $420 million that you will want it on your television screen.

MSNBC is the 24-hour all-news cable channel that arrives today in 22.5 million homes. It has been called the future of network news by a number of analysts, and, given its resources and the fact that all four of the major television networks vowed to be in the 24-hour cable news business by the end of the year, that seemed like a fairly safe assessment until recently.

But, in May, ABC News abruptly reversed itself and announced that it was indefinitely postponing its plans for an all-news cable channel, and CBS News now says it sees no need for another cable news operation that duplicates what already exists on CNN.

So, is MSNBC a big deal or a big hype? And, if it is such a big deal, why are ABC and CBS pulling back? Does MSNBC look like it really could be the future of network television news or more like a replay of the multimillion-dollar pay-per-view debacle called Triplecast -- the spectacular failure by NBC to get viewers to pay for extra cable coverage of the 1992 Olympics?

"Is MSNBC a big deal? Absolutely. It's a very, very big deal. These are probably the two largest companies launching a new network in the history of television," said Dr. Douglas Gomery, a University of Maryland media economist who writes "The Economics of Television" column for the American Journalism Review.

"Is it a big gamble? You betcha. None of us knows what the new media world is going to look like, but we do know there is no sure thing in it. MSNBC is the biggest gamble in television news since the founding of CNN 15 years ago."

Mark Harrington, the vice president and general manager of MSNBC, acknowledges the risk and uncertainty, but says there is one thing he can guarantee those who tune in to his channel: They will not see a clone of CNN.

"We are not going to do the 'newswheel,' " he said, referring to the formula used by CNN and many radio stations, with certain kinds of stories grouped together at certain times on the hour and repeated throughout the day.

"We'll pick the best three, four or five stories a day and focus on them -- not the rat-a-tat-tat of CNN or 'Headline News,' " explained Bob Epstein, MSNBC's daytime executive producer.

That is about as specific as MSNBC executives were willing to get last week in regard to their programming plans for the hours of 9 a.m. to 7 p.m. weekdays: Coverage of the day's major news stories and an anchor desk featuring Jodi Applegate (from KTVN-TV in Reno), John Seigenthaler (former editor and anchorman in Nashville), John Gibson (best known for his O. J. Simpson reporting on NBC's CNBC channel) and Ed Gordon (of the Black Entertainment Television cable channel).

Things are a bit more firm on weeknights. Jane Pauley will be the host of "Time and Again," an hourlong program airing at 7 weeknights, which uses NBC News archives to look at major events of the 20th century. At 8 p.m., there's a talk show called "Internight," which will use rotating interviewers from a roster that includes Tom Brokaw, Katie Couric, Bryant Gumbel, Bob Costas and Bill Moyers.

"The News With Brian Williams," featuring the NBC News White House correspondent and heir apparent to Brokaw, will air at 9. Following Williams at 10, it's "The Site," a program to be produced for MSNBC by Ziff-Davis Publishing and will offer news and discussion about new technology.

MSNBC executives all stress technology, and there is good reason for that: Everyone in the traditional media wants to make it onto the Internet, but for most it is uncharted and confusing territory. NBC, meanwhile, through its partnership with Bill Gates, appears to be in the driver's seat of one of the biggest and sleekest vehicles on the information superhighway.

There will be some 400 employees working together in the MSNBC newsroom in Fort Lee, N.J., and the Microsoft operation on its campus in Redmond, Wash., -- linked through computers and television technology.

Viewers who want even more information than MSNBC is offering on a given story can get it by switching to computer and signing onto MSNBC on the Internet (http: //www.msnbc.com.) -- the on-line companion of the cable channel that also launches today.

NBC affiliates (like WBAL in Baltimore), and NBC-owned stations (like WRC in Washington) will have their own web pages on MSNBC on the Internet, as well as windows to insert local programming on MSNBC cable.

All of the various aspects of MSNBC will be coordinated so the considerable resources of NBC News -- its 25 bureaus, 1,200 journalists, 215 affiliate stations and Super Channel in Europe -- will be brought to bear on providing better and more in-depth information than can be found anywhere else on cable or the Internet for events ranging from the Olympics to the national political conventions.

But such promises and correlative future-talk about how new media technology is going to transform the ways we think and live are always grand. If half of what was promised for the first wave of cable channels in the late 1970s had been realized, we would have all been earning Ph.D.'s, getting married and finding God through our remote-control devices by 1985.

Even Harrington admits there are innumerable details and practical problems in making cable television and the computer add up to something greater than the sum of their parts that he and his colleagues at MSNBC haven't even thought of yet.

Many unknowns

"There are all sorts of things we don't have answers for, because no one's had to wrestle with this before," Harrington said. "We'll be inventing all this starting on day one. For example, what is the shelf life for a story or pictures? It's different for television than it is on the Internet. We'll just have to invent it as we go along."

One problem that has already cropped up is how NBC will promote the MSNBC cable and Internet operations over the air on NBC.

For example, what happens if Jane Pauley tells viewers at the end of "Dateline NBC" that they can get more information on MSNBC on cable or MSNBC on the Internet about a story they just saw on the network newsmagazine? If it comes near the end of a 10 p.m. Tuesday broadcast of "Dateline," won't she be hurting NBC affiliates by directing viewers away from their late local newscasts?

This is not hypothetical. At the end of two NBA playoff games last month, Bob Costas told NBC viewers they could see a complete postgame package by switching to cable channel CNBC just as the late local news was about to start on NBC affiliates like WBAL.

"And I can tell you there were a few ruffled feathers about the way CNBC was promoted during the NBA playoffs, with the network hearing from the affiliates loud and clear," said Phil Stolz, vice president and general manager of WBAL-TV. "So, yes, there is some concern about how MSNBC is going to be promoted on NBC."

Delivery systems

That might seem trivial to a cosmic cyber-thinker like Bill Gates, but with the new balance of power between affiliates and networks clearly favoring the former, NBC cannot afford to vex those who control the distribution of such over-the-air programs "NBC Nightly News With Tom Brokaw" and "ER."

For all the talk of cyberspace, the real story of MSNBC has more to do with the mundane, nuts-and-bolts business of network distribution -- how TV programming actually gets to viewers.

One of the biggest reasons that all the networks wanted into the 24-hour cable news business was amortization.

"It's a way of finding a second outlet for material you're already paying to gather," explained Andrew Heyward, president of CBS News. "Absent that or some other way to do so, you might end up having prohibitively expensive news costs."

The other reason is brand identity: Big-name anchor talent that you are already paying to sit at the network anchor desk can create instant brand identity on the sea of cable channels, even create a non-stop synergy of cross-promotion for your news division.

So, why is NBC making the move, while CBS and ABC pull back? NBC was the only network with a cable distribution system in place, and Fox is the only network willing to pay the excessive costs it will take to build one.

Starting at 9 a.m. today, MSNBC will simply take over the America's Talking channel, which NBC came to own for virtually nothing through a provision of the 1992 Cable Television Act, which its corporate masters at General Electric were savvy enough to exploit. That takeover will instantly put MSNBC in 22.5 million homes.

In the case of Fox, thanks to his deal with cable giant TCI -- which owns individual cable systems like the one in Baltimore City -- owner Rupert Murdoch's all-news channel is expected to debut in about 10 million homes later this summer. But Murdoch is reportedly paying about $10 a subscriber to TCI to have his channel distributed in their cable system homes.

Too costly

That $100-million-plus cost of distribution -- $225 million if you want to match MSNBC's reach -- is what drove ABC News out of the market, according to ABC News President Roone Arledge.

"It became more and more apparent as we looked at the numbers that there is no light at the end of the tunnel -- not at $10 a subscriber," Arledge said.

So, in the sense of having Gates as a partner and entry into 22.5 million homes, MSNBC could already be considered a success.

But being in 22.5 million cable homes doesn't mean viewers in that many homes. CNN is in 68.5 million homes, yet its highest-rated newscasts and shows, like "Larry King Live," rarely attract an audience of more than 700,000 homes or about 1 percent of the potential audience.

Cable channels play a shell game with ratings, refusing to let Nielsen release the figures that measure actual viewership. And Harrington said last week that ratings won't be used to measure success -- a surprising statement given the fact that his bosses at NBC live and die by them.

"I don't think the ratings are going to matter," Harrington said. "NBC and Microsoft are in this for the long haul. They've made a large financial commitment over a five-year period to really launch this and get it up and running."

AJR's Gomery agrees that the two corporate giants are deeply committed and in it for the long run, but adds, "Don't think they're not nervous about it or won't be looking at the ratings for MSNBC to see how they're really doing. These are big companies spending big money and making big talk about changing the world. With Bill Gates and General Electric and what they are trying to achieve, again, I say this is a very, very big deal -- underline big -- that could also make for a big, big embarrassment. It's not obvious. The future of television news is anything but obvious."

Pub Date: 7/15/96

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