Europeans may soon end up being the best-informed television viewers anywhere. Keeping them up to date will be a crowd of English-language news programs from practically every media heavyweight around.
Dow Jones & Co. is hooking up with Tele-Communications Inc. Reuters Holdings PLC is allied with British Sky Broadcasting, 40% owned by Rupert Murdoch's News Corp. British publisher Pearson PLC has joined the fray in a deal with state-owned British Broadcasting Corp., with Cox Communications Inc. recently joining in. And NBC's Super Channel has a pact with the Financial Times' television unit.
All are trailing into the market behind Ted Turner's CNN International. Each partnership hopes to capture a nice chunk of the 75 million European households that have either cable or satellite service, a market on the brink of major expansion. The winner will be a dominant provider of programming for Europe's Information Superhighway--whenever that wonderful construction emerges.
There's one problem, though, best summed up by European media analyst Alastair Smellie of Lehman Brothers Inc.: "There are simply too many news channels. It's a frigging joke." A bruising fight is expected. Stamina is required: It has taken CNN International 10 years to build up a subscriber base of 67 million in Europe, with only an estimated $45 million in ad revenues. With Europe's cable systems full, competitors will find it tough to convince operators to bump CNN or a domestic channel off the basic package. Profits could be thin as everyone vies for the limited ad funds marketers are willing to risk on a Europewide message.
And there's some question how much pan-European, all-English news viewers can take. Even when local languages are used, winning an audience is tough. Euronews, started by 11 European governments in 1993 as a local-language alternative to CNN, lost $16 million last year because of high startup costs and lower than expected advertising. Its board has voted to sell 49% to private investors and is negotiating to sell a large stake to Alcatel Alsthom's media subsidiary, Generale Occidentale.
The risks aren't deterring anyone, however. On Feb. 27, the Dow Jones-TCI product, European Business News (EBN), begins a round-the-clock service. To maximize Dow Jones's resources in news and data, EBN will pick up programming from Singapore-based Asian Business News, another Dow Jones-TCI venture. A digital service is planned for traders with Dow Jones Telerate Inc. terminals on their desks. Goldman, Sachs & Co. media analyst Neil Blackley figures EBN will cost about $50 million to set up over five years, with no profits until 1999. "We fully understand the magnitude of the challenge," asserts Michael Connor, EBN's managing director.
MORE PLAYERS. The venerable BBC wants in on the action, too, and has a backer in Pearson, publisher of the Financial Times. Pearson is putting up the $46 million the pair needs to launch separate news and entertainment channels. The target: CNN. "We'll offer much more than an Atlanta perspective," claims BBC Worldwide Chairman Robert Phillis. Most of CNN's international coverage still emanates from the U.S., though the network has upped to four hours a day from three the amount of London-originated programming.
It's no surprise that mogul Rupert Murdoch is getting into this game. His BSkyB network, which wants a bigger European audience, will have Reuters supply most of the programming for the satellite network's Sky News. Murdoch's Fox Inc. cut a similar deal with Reuters last month in the U.S. Speculation now centers on whether Murdoch's 65%-owned Star TV in Hong Kong will contract a news channel to Reuters.
CNN professes not to feel the heat, but it's not exactly relaxing, either. On Feb. 7, it launched a new hour-long business program with live updates from Europe's bourses. The battle is joined--and Europeans get to watch every skirmish from their couches.
WHAT'S NEW IN TV NEWS
A rush of offerings by global giants.
EUROPEAN BUSINESS NEWS Europe's first 24-hour business news channel, due to start on Feb. 27, is a venture of Dow Jones and Flextech, 60% owned by Tele-Communications Inc.
BBC WORLD A 24-hour news and current events channel started up in late January by British Broadcasting Corp., Pearson, and Cox Communications
SKY NEWS Reuters on Feb. 2 agreed to provide much of the international news coverage on British Sky Broadcasting's existing Sky News channel
CNBC MONEY WHEEL A four-hour, live news show launched on Jan. 9 by the Financial Times' broadcast unit for NBC Super Channel