Product Differentiation in National TV Newscasts: A Comparison of the Cable All-News Networks and the Broadcast Networks

Article excerpt

The three traditional broadcast newscasts on ABC, CBS, and NBC are continually losing their customers. According to Nielsen Media Research, during the 1995-96 broadcast year, the combined rating/share of the three broadcast evening newscasts dropped to 23.3/49. They lost three percent of viewership or about 650,000 homes compared to the 1994-95 year (McClellan, 1997b). Sixteen years ago, the three newscasts were watched in 41.2% of all American TV homes (Zoglin, 1996).

By contrast, CNN and CNN HN have steadily increased their share of total U.S. television news-viewing minutes every year in relation to the three broadcast networks (Baldwin, Barrett, & Bates, 1992). People named CNN their favorite network for news. Although CNN's average rating is not high, many news-viewers tune to CNN at times of crisis (Fouhy, 1996). For example, the half-hour from 12:00 to 12:30 a.m., August 31, 1997, CNN's coverage on Princess Diana's death, generated a 6.5 rating or 4.6 million households (Forkan, 1997).

The year 1996 witnessed the entry of two new national all-news networks into the market which has long been monopolized by the incumbent, CNN. A joint venture of NBC and Microsoft launched Microsoft/NBC (MSNBC) on July 15 with 22.5 million cable subscriber homes (Mifflin, 1996). Then on October 7 an international media mogul, Rupert Murdoch who attempted to buy CNN in the mid-1980s, started Fox News Channel (FNC) with 17 million cable homes (Zoglin, 1996). The sudden proliferation of cable news programming might have affected not only the incumbent, CNN, but also the major broadcast newscasts and, of course, television viewers.

The objective of this study was to compare the evening newscasts of the cable all-news networks and the major broadcast networks, as well as to make comparisons between the 24-hour cable news channels. While broadcast networks target a mass audience, most cable networks play to a relatively small audience. The evening newscasts are compared on the basis of their news story topics, news delivery formats, international news coverage, and their unique, that is, unduplicated news stories.

Previous research on national and local news has focused heavily on duplication or consonance of news values and news treatment due to common values in the newsroom or the structural nature of the broadcast industry (oligopoly). Very little research has analyzed news judgement on the basis of the unique or non-duplicated stories of competing networks (Atwater, 1984). Also, studies on the comparison of news programs offered by different electronic news media (e.g., broadcast vs. cable news networks) are rare (e.g., Media Institute, 1983; Stempel, 1988) and no study has yet made a quantitative analysis of the cable all-news market.

The Federal Communications Commission (FCC) has encouraged multichannel television to increase diversity in television programming. It is assumed that competition creates diversity in the marketplace of ideas, facilitating broad discussion of important issues (Shoemaker & Reese, 1991). In this regard, news and public affair programs significantly contribute to the realization of the FCC's goal--to obtain diversity by providing vital information and interpretation for the viewing public (Atwater, 1983).

In seeking to identify program differentiation in the cable and broadcast news programs, this study explores systematically what and how each additional network contributes to greater diversity and uniqueness in overall news programming in the daily information pool.

Product Differentiation

Price leadership and product differentiation are two strategies that firms can employ when confronted with competition (Porter, 1980). In the multichannel industry, since price competition for audience is rare, media firms need to differentiate their products from their competitors. Product differentiation occurs "when, owing to differences in physical attributes, ancillary service, geographic location, information, and/or subjective image, one firm's products are clearly preferred by at least some buyers over rival products at a given price" (Scherer & Ross, 1990, p. …