TV News Services Scramble to Compete With CNN : Racing to Inform the Global Village 
International Herald Tribune
March 12, 1994
Erik Ipsen  

Competition in the all-news television business is suddenly taking off.

From northern Asia to southern Africa, these are boom times for television journalists as organizations scramble to hire staff and compete with Cable News Network, the pioneering U.S. network.

The BBC World Service news channel, already seen across Asia, will begin a news service in Europe and an Arabic-language service in the Middle East later this year. The U.S. network NBC broadcasts a Spanish- language news channel in Latin America, and the media entrepreneur Rupert Murdoch has said that he, too, will enter the fray.

"I have a sense of urgency," said Ian Frykberg, head of news and sports for Mr. Murdoch's London-based Sky TV. "Things are on the boil."

Sky has five bureaus outside Britain and is planning to add 15 more.

"Rupert Murdoch announced last September his intention to offer a news service to every continent in the world," said Mr. Frykberg. "It is his plan and my ambition to do exactly that."

CNN, with revenue from international operations of about $100 million, will move CNN International into a new $16 million headquarters in Atlanta next month and plans to open a new production center in Hong Kong by the end of the year.

"Our domestic marketplace remains important, but the biggest growth is coming from outside the U.S.," said Steven Haworth, a CNN spokesman.

The push into international markets by the broadcasters comes as many governments are becoming increasingly worried about the impact of such services. Nowhere is that more true than in Asia.

China has made it illegal for its citizens to buy or use satellite dishes. Prime Minister Mahathir bin Mohamad of Malaysia has now taken a similar stand. He recently banned STAR TV, the Hong Kong-based service in which Mr. Murdoch acquired a majority stake in September. STAR carries BBC's service.

If broadcasters are worried about the increasingly unfavorable political climate they do not show it.

"Over the years, we have weathered many storms from governments that did not seem that friendly," said Christopher Irwin, chief executive of the BBC TV news service.

For the BBC, the biggest threat is neither China's dispute with Britain over Hong Kong, nor India's unhappiness over the BBC's coverage of religious unrest last year. The biggest threat is Mr. Murdoch.

If he goes ahead with his plans to make Sky News international, the first victim of that push is widely assumed to be the BBC's deal with STAR TV, which is to be reviewed at the end of the year. At present, STAR TV is by far the BBC's biggest source of income.

"Without it, the BBC would have to find substantial new financial backers," said one television executive.

The competitors insist that they do not see each other as rivals as much as allies. While it is true that there is intense competition for space on the best satellites - those with the largest reach or "footprint" - the rivals acknowledge that they need each other.

"People are more likely to spend money on receiving equipment if there are more services available to receive," said Mr. Irwin.

Others said that similar logic applied on the advertising side. Most advertisers, however, have yet to come to grips with a medium by which their wares can be promoted across entire regions simultaneously.

The logic of setting up a 24-hour television news network also is not so clear. Even CNN, which pioneered the concept in the United States and took it international in 1982, has its doubts. Outside of the United States and Europe, said CNN International's vice president, Peter Vesey, "We are a medium a bit ahead of its time."

Although CNN International claims roughly 80 million viewers, it is difficult to accurately measure that audience, which is nonpaying. That makes selling ads and making money on the channel a bit of a gamble.

"It is a new concept," said Mr. Vesey. "Most ad budgets are wedded to specific cities, states or countries."

Putting together a television advertisement designed to appeal to varying national tastes around the globe is not only new and difficult but expensive. The more news services out there with that kind of reach, the faster advertising executives are likely to buy the concept.

"The cost per million viewers is much less than on conventional broadcast networks and the audience demographics are better as well," said Jeff Goverman, a media analyst with Kemper Securities in Chicago. He stressed that the market was big enough to support three or more players.

But all the talk of cooperation and "complementarity" does not stop the various news groups from privately belittling their rivals' offerings. Sky insists that in Europe, CNN International speaks with far too much of an American accent.

"We are more European, less parochial," said Mr. Frykberg, the Sky executive.

Sky's rivals note that for all Mr. Murdoch's talk, he has yet to commit himself to the vast sums necessary to set up an international television news service.

Others scoff at the likely quality of Mr. Murdoch's offering. They note that such an effort would come under his British television arm's new president, Kelvin McKenzie, who until recently was the editor of the British tabloid The Sun.

"That is rubbish," said Mr. Frykberg. "We are not going to turn our television network into The Sun."

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