Two Upstarts vs. the Big Three

By Janice Castro

Satellite technology spurs the growth of pioneering TV networks

Even the visionaries on Manhattan's Broadcasting Row slept soundly that autumn night in 1957 when the space age was born with the launching of Sputnik I. In those days CBS and NBC owned the U.S. television audience, with tiny ABC, known then as "the Almost Broadcasting Company," struggling to catch up. In the years that followed ABC closed the gap, but it is not simply a three-way rivalry any more. Proliferating communications satellites--the progeny of Sputnik--now offer an alternative method of linking up new networks, cheaper and more flexible than the long-distance telephone lines through which the Big Three send most of their signals.

One year ago this week, Media Maverick Ted Turner launched his Atlanta-based Cable News Network, a pioneering 24-hour, all-news channel that feeds cable systems nationwide via satellite. A few days later, local station WPIX-TV in New York City started Independent Network News, using a satellite to bounce a daily prime-time national news show to local stations across the country. Says INN News Director John Corporon: "The bird has changed all the rules so that the independents can play in the game." Indeed, industry experts say that CNN and, to a lesser extent, INN, are largely responsible for the unprecedented 4% decline in Big Three news audiences during the past year.

Recalls CNN President Reese Schonfeld, 49: "When we started up and I saw that it could work, there were tears in my eyes." If Schonfeld could have predicted his balance sheet, those might have been tears of sorrow. Starting with a scant potential audience of 1.7 million and a paper-thin $25 million annual budget,* CNN soon faced operating costs close to $3 million per month during the heat of an election summer. News Director George Watson, the former head of ABC's Washington bureau, quit in frustration after two months of broadcasting; others followed. Most threatening of all, RCA (parent company of NBC) tried to prevent CNN from using its Satcom I satellite. But Turner beat RCA in court, and after absorbing losses of more than $20 million in the first year, his network now encompasses cable systems reaching 6.3 million homes, and is growing fast. Says he: "In one week we added 58 cable systems."

Primarily a headline service, CNN can be quick and resourceful when the news is hot, tends to flag when it is not, and is often plagued by technical glitches. Nevertheless, network hot dogs who used to call it "Chicken Noodle News" are be ginning to feel the heat: Turner is currently suing the Reagan Administration and the three networks for denying his news teams full participation in pool coverage. ABC learned to its horror last month that it may not be able to transmit live news coverage from London of Prince Charles' July wedding. Reason: CNN, along with CBS and NBC, booked the available satellite time before ABC got there.

Besides its regular news team, CNN brings in special contributors, ranging from Barry Goldwater and Phyllis Schlafly to Hamilton Jordan and Bella Abzug. Its burgeoning audience seems willing to bear with the rough edges, and positively seems to relish the down-home feeling of such featured staffers as Weatherman Flip Spiceland, House Veterinarian Herb Tanzer and Mike the auto mechanic. Best of all, claims Turner, the network should be profitable by year's end.

INN'S record is already being written in black. At 6 o'clock every evening, while Dan Rather, Frank Reynolds and John Chancellor are preparing their evening newscasts in Washington and New York studios, INN'S Bill Jorgensen is banging out his own newscast on a worn black typewriter in the crowded WPIX newsroom in midtown Manhattan. A few hours after some 40 million viewers have seen the three networks' news programs, an estimated 3 million more in 51 cities watch the show anchored by Jorgensen, Pat Harper and Steve Bosh. The result is a revolution in local news markets.

Carried by Westar II, INN'S feed provides the kind of national and international coverage few local stations could produce themselves, and at a bargain price: it is free. In exchange for the right to sell three minutes of national advertising, INN provides the show on a barter basis to affiliates, which can sell three minutes of local ads. Says Corporon: "Everybody makes money. And a national news show adds to a local station's prestige, so a little station tends to grow."

Some Big Three network executives charged with keeping their affiliates in line have been disappointed to see a handful carrying INN'S news along with the uptown variety. That trend is likely to continue as the profitable little network branches out: next October INN will add a half-hour midday news show. Within a few years, says Corporon, "we could have five or six programs on the air." For the moment, however, INN'S greatest contribution is to knee-high stations like KGSW in Albuquerque, N. Mex. Says General Manager Erick Steffens: "Before, if a Mount St. Helens erupted, or there was an earthquake in Italy, we'd have to put up a slide and try to describe it. Now we don't have to be ashamed."

--By Janice Castro

*ABC, CBS and NBC each spend upwards of $100 million a year for news operations.

With reporting by Mary Cronin, Joyce Leviton

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