New news channels slow out of the gate

NEW YORK (AP) — The launch of two more all-news cable channels last year gave Americans more chances than ever to watch news whenever they want. So far, the reaction is a huge ho-hum.
There are 97 million homes with televisions in the United States, but on a typical day, the number of people watching Fox News Channel or MSNBC could fit comfortably into a baseball stadium — with room left over for a few CNN fans.
“An awful lot of money is chasing very few viewers,” said ABC News Chairman Roone Arledge, whose network abandoned plans to start an all-news channel of its own.
The people running the news networks say the slow start is no real surprise, that they’re in it for the long haul.
Two things they’ll need for the trip: deep pockets and patience.
The two operations had the misfortune of starting at a time when many in the news business have been bemoaning the lack of compelling stories — a lackluster presidential campaign, no foreign policy crises.
At the same time, they seemed to be created more because their organizations had the capability, rather than to reach an audience that wasn’t being served, said Larry Gerbrandt, a cable industry analyst for Paul Kagan & Associates.
“There are just too many choices (for news) and in that environment, people tend to go to familiar brand names like CNN,” he said.
The partnership between Microsoft and NBC News took to the air last July and is now available in an estimated 34 million cable and satellite TV homes. Fox, which started three months later, is available in more than 20 million homes.
Nielsen Media Research in April measured Fox News Channel’s average daily audience at 22,000 homes, while MSNBC’s was 21,000. CNN’s audience is about 15 times as much.
Advertisers aren’t exactly bowled over by MSNBC’s and Fox News Channel’s numbers when deciding where to spend money on commercials, said Jon Mandel of Grey Advertising, a media buying firm.
“We didn’t expect anybody to be watching and nobody is,” Mandel said. “Right now it would be more cost-effective (for advertisers) to actually call all of their viewers and ask them to sample their products.”
Mandel believes MSNBC is the better long-term bet because it is trying to position itself as the network of choice when there is a convergence of online and television news sources.
What’s most important for MSNBC now is to increase distribution and build a 24-hour news operation, said NBC News President Andrew Lack. “Cable news is not about the size of your audience,” he said.
For instance, MSNBC’s facilities and personnel were used to help NBC move aggressively on the story about copycat Heaven’s Gate suicide attempts. That enabled NBC to score unexpectedly high ratings and prevent news junkies from slipping away to CNN, he said.
MSNBC and Fox won’t say how much money they are losing; MSNBC sank $65 million into its gleaming new studio in New Jersey. Both operations predict they’ll be in the black by the year 2000.
“You must remember that CNN had kind of a long, slow start, too, and then it hit critical mass. And it had the field to itself in those days. It’s not to suggest that this is not a daunting undertaking. It certainly is,” Brokaw said.