. Last Updated: 07/27/2016

Networks Flip Switch On Cable News Plans

NEW YORK -- The television industry is braced for high-stakes drama as the broadcast networks take on Ted Turner's CNN, which for 16 years has been the only major player at the cable news table.


When NBC and Microsoft Corp. flipped the switch Monday on MSNBC, their 24-hour news network and on-line computer service, the two communications giants placed a very large bet on the future of news on cable -- $500 million during the next five years, executives there say.


The competition will grow in the fall with a Fox entry from media mogul Rupert Murdoch, who is offering cable operators $11 per subscriber to get into the game.


NBC and Fox have taken a look at CNN's balance sheet: $578 million in ad revenue and subscriber fees in 1995 on CNN and CNN Headline News, and another $100 million in CNN International, while spending $300 million in news gathering. The newcomers also believe that cable news fits their global business plans.


The big question: Will the public be interested?


"Viewers aren't clamoring for more cable news channels," says Larry Gerbrandt, senior cable analyst for Paul Kagan Associates.


"The new players are buying their way in because news is something they own, and they don't want CNN to have the field to itself forever.


"There's room for more than one cable network," he adds, "but the challenge will be to make it more than a zero-sum game."


The promotional blitz for MSNBC goes after CNN in a pointed way: "The future of cable news, from the people you know." In contrast to CNN, which has promoted itself as the network that makes the news the star, NBC is using Tom Brokaw, Jane Pauley and other news luminaries to anchor its prime-time schedule, promote the new network and bring viewers in to watch.


Brokaw, who will write a regular column for the online service, has said he will anchor "InterNight" at least until after the U.S. presidential election in November. And as one of the proponents of the joint venture from the beginning, he says he's "very committed" to MSNBC.


In the meantime, CNN isn't idle. It recently launched CNNfn, a financial news channel, and is planning a sports news channel in conjunction with Sports Illustrated magazine, plus news services for shopping malls and doctors' offices.


Fox, meanwhile, is building a news division practically from scratch, and Ailes declined to provide details about his plans. He said Fox is spending $100 million to launch the service.


Fox is expected to announce this week that it will kick off the cable news channel in late October and that it has commitments to launch with more than 10 million subscribers, thanks to a partnership with cable system operator Tele-Communications Inc.