Press: One-Two Punch

ABC-Group W cable team

When Ted Turner launched his Cable News Network last year, broadcasting insiders condescendingly predicted that the “Mouth of the South” had finally bitten off more than he could chew. They were convinced that American TV viewers, accustomed to half an hour of headline skimming on the networks each evening, would never tune in a 24-hour news channel in sufficient numbers to support Turner’s expensive satellite system. Barely a year later, CNN has corralled a potential audience of 8 million, won applause for its live coverage of breaking news, and is on the verge of turning a profit.

Now other broadcasting companies are getting on the bandwagon. Last week ABC Video Enterprises and Westinghouse Broadcasting’s Group W Communications announced joint plans for two all-news cable channels next year. Satellite NewsChannels will be offered free to cable companies (CNN charges cable operators 15¢ to 20¢ per subscriber) and will feature both a short and long look at events.

The first channel, scheduled to go into operation next spring, will mimic the all-news format used by many radio stations, with roundups of the day’s top stories aired at least twice every hour, and sports, weather and short features tucked in between. “Give us 18 minutes,” Satellite NewsChannels boasts, “and we’ll give you the world.” Satellite NewsChannels will carry film footage from ABC News but will not enlist the network’s on-camera correspondents. Using four of the Group W stations and a mini-network of other local stations around the country, the new channel will also produce a five-minute segment each hour of local and regional news, a bonus that CNN does not provide.

The second channel, to be launched late in 1982, will offer in-depth reporting and extended coverage of breaking stories. ABC will produce these longer segments, most likely utilizing its own personnel as reporters and narrators. After breaking network news molds with its late-evening Night line 17 months ago, ABC is clearly trying to launch another pre-emptive strike against CBS and NBC.

Says ABC News and Sports President Roone Arledge: “The combination of the two services is going to be something that’s not available on commercial TV.”

Start-up costs for this one-two punch are estimated at $35 million to $40 million, but that figure could grow. The broadcasts will be beamed off a new satellite, Western Union’s Westar IV, scheduled for launching in January. Since few local cable operators have equipment capable of receiving signals from Westar, Satellite NewsChannels may have to chip in for the necessary hardware. Installing a satellite dish, for example, costs upwards of $10,000. A more serious problem: ABC affiliates may grumble—or even defect to CBS or NBC—if the network’s top journalists begin turning up on competing cable outlets.

Network reaction to the ABC-Group W venture was muted. Even Ted Turner was quieter than usual. The fact that the ABC-Group W service will be provided free to cable operators puts CNN at a competitive disadvantage. On Wall Street, the price of Turner Broadcasting System Inc. stock dropped 3 points, 18% of its market value, within hours of the announcement of ABC-Westinghouse’s plans. The ultimate question, of course, is whether there is an audience large enough to support three all-news channels. Arledge, for one, is optimistic:

“There are news junkies in this world and there are more and more of them everyday.”