Gannett Floats TV News NetViewers as well as MSOs could balk at entry into crowded arena 12/29/2002 07:00:00 PM Eastern
Already in the television business with 22 local stations, Gannett is angling to become the newest player in cable news. But its designs to launch the proposed cable network, dubbed America Today, using retransmission consent, may draw the ire of cable operators.
America Today would be built around local newscasts from Gannett's large station group, but also contain some national content.
With broadcast and cable news services already abounding on cable, Gannett is leaning on a powerful weapon to gain carriage: retransmission consent. Cable and satellite operators typically give payment or another service in exchange for the right to transmit a local broadcast signal.
Mention retransmission and MSOs get very edgy. They grumble about having to pay to carry free over-the-air broadcast signals.
But other media companies have used this tactic to grow their cable networks. News Corp. leaned on retransmission consent to grow FX. Walt Disney Co. can threaten retransmission of its ABC stations to wrangle subscriber-fee increases for ESPN, already the most expensive cable service.
Roger Ogden, senior VP and GM of Gannett's KUSA-TV Denver and a top Gannett TV exec, says Gannett is negotiating retransmission with major cable operators like Time Warner, Cox Communications, Comcast, Adelphia and Charter, along with DBS suppliers EchoStar and DirecTV. In exchange for its signal, Gannett would secure channel space for its news network.
Insight Communications chief Michael Wilner says he'll look at the service when approached by Gannett. "If they can develop something fresh and different, that's great," said Wilner, pointing to Fox News Channel as an example. But, Wilner cautioned, "If it's the same [as other news channels], it will be a challenge to get widespread distribution."
America Today would go beyond local newscasts with some national reporting and programming from Gannett's TV operations in Washington, D.C., Ogden said. It would target viewers who want to watch local newscasts from other cities. Most likely, the viewers would be transplants from cities where Gannett owns stations, like a Denver resident transferred to Chicago. (Gannett's USA Today
has a section of local stories from every state in each edition.)
He cautioned that Gannett is still "a long way from saying we're ready to launch this thing. Some time during the first quarter of next year we should know whether this is a viable proposition or not."
Like other cable services, America Today would draw dual revenue from national advertising and subscriber fees from MSOs.
The network may have limited regional and demographic appeal, though. Snowbirds in Florida or Arizona might tune in for hometown newscasts, as might travelers. But cable news is already a crowded market. Fox News is the only news network that posted audience gains last year.
Says Chris Mage, director of national TV for OMD USA: "I understand it, given who they are and what they own. But I question the logic when other national suppliers are having trouble."
Some operators are skeptical, too. Jerry McKenna, VP of strategic marketing for Cable One, which hasn't been approached by Gannett yet, says that though the plan is "certainly a different format, I just don't know what customer demand for it would be."