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A Modified MSNBC?

There has been speculation for months about MSNBC’s future as a 24-hour cable news channel—or, maybe more to the point, its lack thereof. But one indication may have come last July, when the 10-year-old network launched a newsmagazine, MSNBC Investigates. From what I’ve heard coming out of 30 Rock lately, that may be a sign of things to come.

Word is that the perennial also-ran in cable news is considering the possibility of virtually dropping out of the live-news business and devoting itself entirely to taped, newsmagazine-style programming —much of it likely repurposed from NBC News. In other words, “The Dateline: NBC Channel.”

That’s just one option under consideration. But that such a drastic idea is even on the table speaks volumes about the state of the cable news business.

If such a modification occurs, it would certainly mean changes for MSNBC’s business-news sibling, CNBC. One scenario has successful MSNBC personalities Chris Matthews and Keith Olbermann moving their respective acts to CNBC in the hopes of turbo-charging its ratings-challenged primetime. In this case, NBC News still would have both channels at its disposal should it want to go live 24/7 in the event of a terrorist attack or a major natural disaster.

Whether NBC News will choose such a dramatic course of action is a subject of debate in the industry. Naysayers argue that the challenge of transforming MSNBC into a newsmag channel doesn’t make sense from either a production or an economic standpoint. Indeed, the cost of such a transformation would fly in the face of NBC’s efforts to wring tens of millions of dollars in cuts out of the news division.

Potential hurdles could arise with cable operators, too, if the network’s programming strays too far from the format that originally secured its carriage. Moreover, despite its lackluster showing in the cable news wars, MSNBC still generated about $250 million in revenues last year.

Those betting on a makeover point to the launch of MSNBC Investigates, as well as comments made this summer by NBC News President Steve Capus indicating that more work from Dateline: NBC would show up on MSNBC. In the past few months, there have been internal conversations about vacating the cable channel’s Secaucus, N.J., headquarters and moving the operation to 30 Rock, where it would enjoy easier access to the NBC News library.

Still, news remains an extremely profitable business. CNN generated close to $800 million in revenues last year, and that doesn’t include the $150 million from Headline News or the other millions it rakes in from its affiliate and international-news services.

Fox News Channel clocked $574 million in revenues in 2005, and that likely will increase significantly once Fox News manages to extract the hefty fee increases it wants from cable operators when contracts come due in the months ahead. Meanwhile, the network has been threatening to cut into CNBC’s action (some $510 million in revenues last year) by launching a Fox News business channel sometime in 2007.

The unspoken truth in all of this speculation is that there are simply too many all-news networks and only so many people to watch them. No. 1 Fox News has seen its year-to-date ratings in primetime fall 29%—and that’s not because any of its cable-news competition has stolen away a huge share. CNN’s primetime ratings are down by 23%, while MSNBC is basically flat.

As the owner of a network that’s stuck at the bottom of the cable news heap, NBC Universal has little choice but to make a radical change if it wants to differentiate MSNBC from what the other guys are doing. If the channel cannot remake itself, it may as well go dark.

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