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
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. …