'Mini CNNs' Fill a Niche on Local Cable Channels 24-HOUR NEWS

Article excerpt

As the Fox News Channel and MSNBC jumped into the national 24-hour-news business last year, another genre of round-the-clock news was expanding even faster. While headlines focused on media moguls like Rupert Murdoch and Bill Gates, local news channels were quietly setting up shop and building audiences - from New England to the Pacific Northwest.

Today, 19 local all-news cable channels are in operation, with a combined audience of nearly 15 million households. Some are wholly owned by cable giants like Cablevision Systems or Time Warner. Others are media partnerships, such as a cable operator teaming up with a local television station.

What they have in common is that virtually all of them are losing money. Yet news executives and industry analysts say that turning a short-term profit isn't the purpose of these news providers. What drives them is the opportunity to deliver news one can't get elsewhere, and in doing so, to build long-term loyalty with both viewers and advertisers. Like mini-CNNs, all-news channels thrive on breaking news, from local crime and bad weather to traffic accidents and power blackouts. Most take a "field of dreams" approach to news gathering: Report it, and they'll watch. Statistics show 80 percent of viewers tune in to local news - as compared with slightly more than 50 percent who watch nightly network newscasts, according to David Bartlett, former president of the Radio-Television News Directors Association. When an Avianca airliner crashed on Long Island in 1990, for example, News 12, a local all-news channel, was first on the scene and fed TV stations around the world footage of the crash site and rescue efforts. The station won an Emmy Award for its news coverage of the disaster. One-third of the nation's 24-hour news channels are clustered in the Northeast, but all-news channels have recently been launched in Arizona, Virginia, Ohio, Florida, Illinois, California, Nebraska, and Washington State. That's heady progress for a genre that began only a decade ago when News 12 Long Island launched on Dec. 15, 1986. It took eight years for the station to turn a profit. For the last 18 months, it has simply broken even. "You don't get into this business to build value for the next quarter, but for the next decade," says John Hillis, president and chief of News Channel 8 in Washington, D.C. For a newspaper, broadcaster, or cable operator, partnership in a local all-news channel offers an edge in a marketplace that may soon be filled with programming delivered via satellite and by regional telephone companies - information providers who don't have to rely on cable operators or broadcasting to enter the home. "All-news cable channels have a strategic value to cable operators because they'll be exclusive to cable," says Spencer Grimes, a cable analyst at the investment firm Smith Barney. "Cable operators can live with an unprofitable venture like an all-news channel if it's used as a retention tool for customers." In covering city-hall news conferences and local school-board meetings, all-news channels are filling a niche local broadcasters have long ignored. …