A few blocks from Brian Benschoter’s desk, the South by Southwest music festival has turned Austin, Texas’s downtown bar district into a noisy barrage of live performances. Yet Benschoter, the vice president and general manager of Time Warner Cable’s regional cable news channel, News8Austin, sits in his quiet office amid piles of paper and notebooks.
The silence is deceptive.
One floor above is a bustling newsroom. TV monitors line the walls, and bulky studio cameras and green-screens serve as bookends to a vast midsection of cubicals. Some reporters work busily at their desks, TV makeup still caked on their faces. Reporter Victor Diaz, who covers Austin’s burgeoning indie film scene, is hunched over a computer, just back from covering the film-festival portion of SXSW. “We have a lot of art houses here,” he says. “Among the secondary markets, Austin is right on top.”
Diaz and other reporters exude a certain excitement despite limited resources. They lug their own camcorders to shoot stand-ups, simply reversing the viewscreens so they can center themselves in the shot before rushing back to the office to get their segments to editing.
As with most regional cable news channels, this is largely a guerrilla operation and quite a departure from the more pampered environment of the local broadcast stations. Of course, the local broadcasters don’t have to fill 24 hours a day. Benschoter does. “You’ve got to think differently about the product,” he says. “It’s really about having three hours of content that’s evolving throughout the day. But when the first big news event or weather event comes around, people start to get it.”
Indeed, these days, operators seem to be “getting it” when it comes to regional news. When they first emerged in the 1980s, the news channels were largely community service initiatives, or efforts to please franchise authorities. But more recently, the channels have become strategic assets, as operators face off against direct-broadcast satellite providers and contemplate renewed threats from telephone companies rolling out video service. DBS providers can’t easily offer local programming because of the nature of their national footprint, making it next to impossible for them to fund regional news channels around the country. Telcos, meanwhile, are just getting their sea legs when it comes to offering any video content, much less locally produced shows.
What’s more, news channels are starting to use video on demand to their advantage, and are also covering local news stories that broadcast networks don’t have the time — or inclination — to focus on.
Since Cablevision Systems Corp. unveiled News 12 Long Island in 1986, operators have plowed money and resources into roughly 40 news channels in the U.S. — most in the Eastern half of the country near big population centers. Some are self-funded and reportedly profitable, although operators generally won’t break out numbers. Others are run as partnerships with local broadcasters, newspapers or other investors. And yes, a few have gone out of business (two recent examples are Adelphia Communications Corp.’s Orange County Newschannel and AT&T Broadband’s BayTV in San Francisco, which both folded as the economy declined in 2001).
But as some regional networks fail, others have launched. As recently as November 2003, Time Warner Cable launched News10, covering central New York.
In fact, most channels are surviving, with owners banking on them as a customer-retention and strategic trump card. “This is one example of where cable has a clear competitive advantage,” says Robert Stoddard, a senior vice president and spokesman for the National Cable & Telecommunications Association. “People have a great appetite for 24-7 news. And people also have a great appetite for community news.”
Put those two things together, and you have regional cable news, which generally offers a mix of hard and soft fare presented in a hyper-local style. Most regional cable news channels share the same basic mission: To provide programming that will interest a broad cross-section of cable subscribers — and hopefully help keep them from switching to competitors.
DEMO FREEDOM
Unlike local TV stations, which must cater to the 18-to-34 demographic favored by advertisers, cable news operations sustain themselves on a combination of ads and their share of subscriber revenues. As a result, they can offer broader programming.
Of course, “the broadcasters still have the vast majority of the ratings,” says Jerry Condra, an assistant professor at State University of New York at Oswego. That’s largely a result of the 24/7 nature of regional cable news versus the more compressed schedule of two or three newscasts per day on local broadcast TV.
Most regional cable news viewers, on the other hand, come and go constantly. “There’s no doubt that the audience is small, but it’s very healthy and it’s growing and growing and growing,” Condra says. “The cable operators are taking a long-run approach and taking advantage of the sea change that’s coming along.”
Cable news channels are quick to point out that they’re trying to do something completely different. “We view ourselves as competing more with the newspapers than with the local TV stations,” says Steve Paulus, senior vice president and general manager of Time Warner Cable-owned NY1 in New York City.
NY1 employs a newspaper-like beat system in which reporters specialize in particular subjects, rather than cover random news events as they happen. They also record their own stand-ups without a camera crew. Paulus says the system has resulted in better coverage of politics, education, mass transit and other areas, and that has spurred steady, loyal viewership.
“The good news is that we’re making money,” he says. He won’t break out specifics, but says that even unprofitable regional news networks are still “an asset” to a cable system. “No matter how successful we are financially, there’s a certain mystique that it gives the cable operator,” he says. “Cable operators are serious about it, they’re committed to it.”
And while large MSOs account for most of the regional channels across the country, some smaller operators are also playing the game. After all, satellite dishes are an even bigger threat in smaller markets.
One example is Sunflower Broadband, which has eight franchises in the Lawrence, Kan., area. Despite having fewer than 40,000 total subscribers, the company’s family owners, who also own the local newspaper, fund a regional cable news channel.
Stations in nearby Topeka and Kansas City traditionally haven’t covered the Lawrence area, which presented an opportunity when Sunflower started producing periodic newscasts in the early 1970s as a community service. Since then, Sunflower has expanded the service into a full channel, 6News, adding 6 p.m. and 10 p.m. nightly live newscasts and sometimes even beating the Topeka and Kansas City stations in the ratings.
Other programming includes a cooking show and even a locally produced trivia show. “To me, [6News] is at least as valuable as ESPN as a product,” says Patrick Knorr, Sunflower Broadband general manager. “It’s probably the only product in my lineup that will make people choose us over satellite.”
And even though 6News doesn’t have the viewership to attract enough advertising to make money on its own, Knorr says, the channel is profitable when assessing its value based on metrics used to value other cable channels.
Operators are also fashioning regional cable news channels with the latest technology. Many are now fully digital studios. Back at News8Austin, Benschoter likes to show off his first editing workstation, which in 1999 cost about $45,000. It now sits in a back storage room. His current crop of $3,500 Dell editing workstations are many times more powerful.
Meanwhile, camcorders in the field can record directly to removable hard-drives rather than tape, allowing reporters to easily transfer footage into a PC and drop the video files into folders on different servers. When they need to send or receive files offsite, they just use the Internet rather than expensive satellite links.
VOD ADVANTAGE
As regional cable news operations go digital, many are also deploying VOD services that allow subscribers to order news segments themselves from an on-screen menu. “We can migrate to a VOD platform very easily,” says NY1’s Paulus. “That will bring a whole new opportunity for us.”
Even tiny Sunflower Broadband plans to add VOD for its regional news content in the second quarter of 2005. “Once we get it up, we’ll have a huge marketing push,” says Knorr. “This is gold. DBS can’t do it, and the Bells are so far away from doing it … Cable truly has a distinct advantage.”
Another perceived advantage is the 24/7 format, which gives regional news channels the ability to gravitate toward more human-interest content. “Stories that would not make it onto a half-hour broadcast will make it onto 24/7 local news,” says Mark Feldstein, associate professor and director of journalism at George Washington University in Washington, D.C.
While regional news networks cover their share of hard news, Feldstein, a former investigative broadcast reporter, says lighter fare is generally more prevalent on regional cable news channels than on local broadcast stations. “They have a huge news hole and relatively small resources for filling it in,” he says.
In some ways, that has worked to cable’s advantage. Critics have charged that local TV stations over-dramatize shootings and other street crime because it’s easier to set up a camera at a crime scene than to dig around for enterprise stories. “We try not to do random crime,” says Benschoter. “That’s one of the reasons people watch us. They’re disenfranchised viewers.”
In that vein, some operators have expanded regional programming beyond traditional news, mixing in entertainment and other non-fiction content in an effort to fill those 24 hours with more variety and keep people watching. Comcast, for example, launched CN8 in 1996 to be “more than just classic news,” explains CN8 founder Michael Doyle. CN8 reaches some 6.2 million homes in Northeast markets from Maine to the edge of Washington, D.C., with each locale receiving a mix of local and regional fare. The channel’s strategic importance hasn’t been lost on Comcast executives. “It’s a major contributor to the stickiness of our service,” says Comcast spokesman Bob Smith. CN8, like a growing number of other regional cable news channels, also offers video-on-demand programming, including 250 high-school sports games per year. “There are certain events that were made for VOD,” he says.
But is CN8 profitable? “All I will say is that it is a financially responsible network,” says Doyle, who adds that one of the channel’s key functions is projecting a strong corporate image — as should be the case with all regional cable networks.
“When people think of Comcast, they think of the people they see on CN8,” Doyle says. Poor production quality at some regional cable news channels over the years has helped tarnish the cable industry’s image, he adds. “Most of the networks weren’t well done. When people watch shoddy programming, they go, 'Oh, this is a shoddy company’. I’m passionate about the image of cable. The vehicle of television is a great vehicle for changing consumers’ perception of this industry. The industry has been very slow to wake up to that. But we’ve come light years in the last 10 years.”
