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CNN Opens Up Pipeline

Network unveils broadband pay service for news junkies 12/02/2005 07:00:00 PM Eastern

CNN turns the valve this week on a broadband product that sets it apart from the increasingly crowded broadband-news field. Known as Pipeline, the online news channel provides newshounds with four live streams of content and access to recent video-on-demand (VOD) clips and deeper video archives.

CNN’s commercial-free subscription service is the latest in a number of big-media broadband efforts. While some are free, such as Comedy Central’s Motherload and CBSNews.com, others—such as Pipeline, ESPN 360 and ABC News Now—come at a cost to viewers.

What makes Pipeline stand out are the four separate video streams, each offering different news stories and three subscription packages. Above the four video windows is a larger screen that displays whatever the viewer chooses to watch. Once the story starts to play, related text stories become available. Video is also available via an on-demand service and a search engine.

The three-tier subscription approach ($24.95 annually, $2.95 monthly and 99¢ daily) is a first for broadband offerings, and CNN execs believe it’s the right model. “There are plenty of people who would be willing to pay a small amount of money from time to time for a live news product,” says David Payne, senior VP, CNN News Services/general manager, CNN.com. “When there is a live news event that impacts you personally, paying 99¢ is not that much of a barrier.”

As of now, none of CNN’s competitors offer that many video streams or price points. Fox News, which chose not to comment for this feature, offers one video stream on its Web site, and ABC’s online news component has monthly and yearly but no daily subscriptions.

What Pipeline subscribers won’t be seeing on the four screens is any CNN program that’s delivered via cable or satellite. That’s to keep the peace with the network’s distribution outlets. Says Payne, “We need to create a differentiated product than what we sell the cable operators.”

FLEXIBLE INTERFACE

One of the new application’s draws is its flexibility. Subscribers can shrink the size of the window so they can continue to work in other applications, such as on a Word document. Alerts pop out of the Windows toolbar to inform a user of breaking news.

Payne believes the new service is complementary to, as opposed to in competition with, CNN.com. And while he’d love for most of CNN.com’s 26 million unique monthly visitors to spring for the service, the network is tempering its expectations. Nonetheless, CNN execs hope that 99¢ outlays for big news events will drive revenue.

“During the last presidential election, we had 650 million page views in 24 hours,” Payne says. “The demand for control on the part of viewers in those kinds of situations is huge. Nobody wants to wait for their state’s results; they like to see where things stand at the moment.”

Pipeline has been in the works for more than a year, much of the nuts-and-bolts work falling on the shoulders of Monty Mullig, senior VP, CNN Internet technologies. He oversees the gear that pulls in live video feeds and readies them for broadband playout. The service has its own control room (it is CNN’s first high-definition control room, a requirement for prepping the content in the widescreen format) that has five people in it at any moment. That crew (which includes a technical director/director, audio operator and producers) works alongside two Webmasters in an adjacent room, who handle the text content.

“Personnel in the control room can pick any of the live feeds off the CNN routing switcher they want,” Mullig says. “The feeds are downconverted, and once they leave the control room, they run through an encoder that makes two streams: one at 350 kbps for high-quality video and one at 60 kbps for the preview screens.”

Technology from Anystream plays a major role in the process, encoding the content without delay and pushing out multiple copies so viewers with different broadband speeds can all enjoy an optimal experience.

Mullig was also tasked with readying content for Pipeline’s browser-based service. CNN wanted to make sure Pipeline subscribers could access the service while they were on the road or on a computer that doesn’t have the Pipeline application (or, as is increasingly the case in work environments, it can’t be downloaded due to corporate restrictions). That meant building a service that was based on a browser.

“The real challenge was developing the application for the user experience,” says Mullig. “We have to be able to put text labels on a stream and make sure that the text associated with a story is delivered at the same time as the video.”

A VARIETY OF MODELS

Several major broadband efforts, from Pipeline to CBSNews.com to MTV Overdrive, are unique in that they aren’t simply rehashing TV product. That model doesn’t work on the computer screen, Payne believes. “We did a lot of research and focus groups to see what people wanted at work,” he says, “and what they didn’t want were programmed shows at scheduled times with anchors talking to them.”

Many are also offering a hybrid of subscription and ad-supported models. Just a few years ago, the cost of streaming live video would have made an advertising-supported channel a loser. And subscription models tended to be priced higher to ensure that even a low number of subscribers would generate enough revenue to offset those costs.

FALLING PRICES

Today, however, streaming costs have dropped to the point where networks can embrace whatever model they want. ABC, for one, believes in ad-supported, high-quality content available through the ABC News Now subscription service (it’s $4.95 a month and $39.95 a year). Like ESPN and its 360 broadband channel, ABC has reached deals with cable operators, including Comcast, to deliver the service to broadband subscribers.

“Right now, everyone in the industry is coming to the conclusion that it’s worth experimenting with reaching consumers in new places on new devices,” says Bernie Gershon, ABCNews.com senior VP and general manager.

Payne believes the multiple-revenue-stream model is key to sustaining growth for Pipeline: “When the economy gets soft and the ad market gets soft, another revenue stream is in place.”

For others, subscriptions won’t drive revenue. CBS Digital President Larry Kramer says CBSNews.com has no plans for a subscription service but is gathering revenue through syndication deals with the likes of AOL.

“One of the problems you have when you introduce a pay product is that people who use the free product will begin to think there is a problem with the free product; otherwise, it wouldn’t be free,” says Kramer. “The New York Times managed to do a good job of separating its commentary [for its TimesSelect], but the news is still free. With online product, the kiss of death is making people think news is being held back.”

CBS is holding less and less back every day. As stories are finished during the day for the evening newscast, they become available on CBSNews.com, and viewers can assemble their own newscast using a video jukebox on the site.

As media companies ramp up their broadband offerings, the fight for viewers’ eyeballs grows that much more intense. “[All the major news organizations and media companies] are doing different things for different audiences,” says Kramer. “The trick is to be good.”

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