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annals of communications
The New Yorker - August 2, 1993

raiding the global village

CNN's global dominance faces challenges from new multinational network linkups and from changes in what the world wants to watch.

by ken auletta

"Unless American soldiers are there, American television is not there," the Cable News Network correspondent Christiane Amanpour observed recently about network coverage of foreign stories. Amanpour says that in the world's various trouble spots she occasionally encounters a competitor from ABC, the American network that offers the most determined coverage of overseas news. Rarely, however, does she find herself competing with CBS or NBC, each of which saves money by having a correspondent in Washington or London do an authoritative-sounding voice-over with pictures from a video service. She more often notices reporters from the BBC or Reuters, or, sometimes, a team from Rupert Murdoch's British Sky Broadcasting, or the cameras of national broadcasters from France, Australia, Canada, or Spain.But Amanpour does not generally feel the heat of competition from othertelevision-news outlets. "Everywhere I go, foreign news equals CNN," she says.

CNN has come to dominate the world-news stage. Its ascendancy was confirmed in 1989 with its blanket coverage of the Tiananmen Square massacre. That was followed by coverage of the collapse of the Berlin Wall; of the first coup attempt on live television, in the Soviet Union; and of the first live war, in the Persian Gulf. Only CNN could dedicate its twenty-four-hour news channel to these events. Only CNN reaches two hundred countries and more than sixteen per cent of the world's eight hundred million TV homes.

When President Bill Clinton ordered the bombing of Iraq's intelligence center, in June, and the armed services had yet to confirm a hit, David Gergen, who had just been appointed counsellor to the President, phoned CNN's president, Tom Johnson, and got a confirmation. Only then did Clinton announce the mission.

Using the latest satellite technology, CNN, which was launched by Ted Turner in 1980, has captivated decision-makers and the public alike. It pro-claims itself to be "the creator of Marshall McLuhan's electronic global village" and "the world's only twenty-four-hour global television-news network." But Turner is now being challenged by competitors in the same way that he and cable TV challenged the dominance of the big three American television networks. The most prominent challenger is the BBC, which early last year announced the launching of BBC World Service Television, a twenty-four-hour global-news channel. And just this March the BBC forged a still vague alliance with ABC, saying that it would swap footage and pool foreign bureaus with ABC, the most diversified of the big three. This electronic alliance, the BBC proclaimed, would strengthen its hand against CNN--which the BBC dismisses as an American news service, rather than an international one.

ABC itself is also challenging Turner. The network has shrunk, but still has more foreign bureaus or offices (a dozen) than either CBS or NBC, and its nightly newscast uses more stories from overseas than either of the two others. ABC/Capital Cities owns eighty per cent of a third player, Worldwide Television News (WTN), a video service that often competes with the BBC. "The announcement that ABC is linking with the BBC is one we are tracking carefully," Tom Johnson says.

A fourth challenger is Reuters Television, which includes what used to be known as Visnews and now serves six hundred and fifty broadcasters, in eighty nations. Like WTN and the Associated Press, Reuters has concentrated on being a wholesale supplier rather than a retail distributor of news over a dedicated channel. But this may be changing. In June, Telemundo, the Spanish-language television network, after deciding not to renew a five-year alliance with CNN, teamed up with Reuters and the BBCto create a twenty-four-hour Spanish-language news service to be disseminated throughout South America, Spain, and parts of North America. In contrast to CNN, whose international news is packaged out of Atlanta, London, and Washington, Reuters is decentralized, and is delivered in fifteen languages. Since Reuters provides customers like CNN with its video wire service, it does not want to antagonize them, but its executive director and editor-in-chief, Mark Wood, makes it clear that Reuters is open to other alliances. "If other opportunities come along in other languages, we'd look at them," he says.

The Associated Press is also looking at the possibility of using its bureaus--ninety of them outside the United States--to provide video as well as print and radio reports. "The board has authorized us to return with a plan for an international video service," A.P.'s president, Louis D. Boccardi, says, adding that he hopes to reach a decision on this matter by the end of the year. Though Boccardi stresses the point that "we don't see ourselves in the retail business" (and thus as a direct competitor of A.P. clients), an A.P. video service could strengthen the hand of CNN rivals.

Then, there is Murdoch's Sky News. Sky has teamed with twelve state-owned broadcasters to form Euronews, which broadcasts by satellite throughout the Continent, as well as in Britain, in five languages. And Murdoch is also trying to expand into Asia, the world's most populous continent.

Although the two less active American networks seem to have pulled back from the international arena--NBC sold its stake in Visnews to Reuters last year, and CBS can no longer claim to be the world's premier television-news outlet--there are signs that they, too, are stirring. NBC has kicked off a twenty-four-hour Spanish news service and is talking to Reuters and an Italian-owned superstation as it searches for partners. "Gartner did nothing overseas," the NBC News president, Andrew Lack, says of his predecessor, Michael Gartner. Lack goes on to say that the president of NBC, Robert C. Wright, who appointed him, is "so concerned that we are walking around with our pants around our ankles" that he appointed a committee to explore new relationships overseas. CNBC, the twenty-four-hour cable channel owned by NBC, which now broadcasts mostly business news, has become a chip in the negotiations. "It's a component, because for foreign partners it's another outlet for them," Lack says. "They're trying to crack the North American market." None of the big three networks will let them on their channels, but CNBC would. "CNN won't be there by itself anymore," Robert Wright says.

CBS, reflecting the aversion that its chairman, Laurence Tisch, has to diversification and costly risks, has been the most cautious of the big three American networks. Until recently, CBS has been content to maintain, like the other networks, a video-exchange program with various foreign broadcasters. But CBS is now talking to potential overseas partners, including CLT, the European media conglomerate, in Luxembourg, which has a powerful satellite signal throughout Europe. "We're talking to people. We're looking for opportunities right now," Jay L. Kriegel, a CBS senior vice-president, says.

Each of these real or potential competitors comes at CNN frontally. Coming at CNN from other directions are local broadcast and cable outlets and national and regional news operations, all of which have blossomed as television has been privatized overseas and as satellite, cable, and fibre-optic technology has enhanced their reach. They are riding the wave of government deregulation and technology in the nineties, just as Ted Turner did in the eighties.

"The activity level is picking up dramatically in the global-news-service field," Tom Johnson says. He also says that he and Ted Turner welcome the competition. Nevertheless, Johnson worries that what happened to the big three American networks with the growth of cable TV could now be happening to CNN. "Sure, there could be some dilution," he says, but adds that he doesn't expect it for at least five years.

A nightmare possibility that CNN has so far refused to entertain is that Marshall McLuhan got it wrong. Maybe technology has leaped beyond McLuhan's conception and is no longer Ted Turner's ally. Maybe, instead of one wired global village, there will be hundreds of villages, each broadcasting in its own language, with its own anchor and news team, its own weather and sports and local slant. The idea of a global village was initially appealing because of its simplicity, according to W. Russell Neuman, the Edward R. Murrow Professor of International Communications at Tufts University's Fletcher School of Law and Diplomacy. "But it's a misleading simplicity," he says. "Look at Yugoslavia and you realize that all politics is basically local. In his original conceptualization, McLuhan envisioned Americans seeing what was going on live in an African village. But Americans may not want to watch that. And perhaps vice versa. So something is missing from the formulation. The notion of instant bonding because a community is possible is the flawed naivete of McLuhan's vision. What we have is a common space. It turns out to be dominated by Arnold Schwarzenegger and Bette Midler, not an African village. . . . I'd search for a new metaphor."

CNN has a nice head start in the race to be the dominant force in international news. Its global reach has multiplied seventyfold since Turner launched it. When it first appeared, in 1980, it had a million seven hundred thousand household subscribers and in its first six months it had seven million dollars in revenue. In its first five years, it lost money. In 1992, it reached a hundred and thirty-six million viewers, brought in five hundred and thirty-six million dollars in revenue, and earned a profit of a hundred and fifty-five million dollars. In 1985, to expand overseas, Turner created a new channel--CNN International. He has now worked out cooeperative agreements with a hundred and forty-three nations, rotating their news reports regularly on CNNI, and built solid relationships. CNN's credibility with the Iraqi government helped make it the only outside network broadcasting live from Iraq during the Gulf War.

Like soft-drink and cigarette manufacturers, who have looked to other markets as their domestic business levelled off, CNN is targeting its future growth outside the United States. Its broadcasts can now be seen in twenty-three Asian countries, and it plans to open a production center in Asia next year. In Europe, CNN is expanding its studio production facilities in London, and Turner has recently got over a long-standing aversion to being involved in any business he could not put his brand name on. In the last year, Turner acquired a quarter ofthe shares of n-tv, a twenty-four-hour German-language news service, and became an equal partner, with a group of former Soviet television executives, in Russia's first independent TV channel, Moscow 6 TV. In April, CNN announced an agreement to distribute its programs to households in five African countries--Nigeria, Ghana, Kenya, Zambia, and Uganda. Meanwhile, in Latin America, Turner has also amended its de-facto policy that CNN's news will be transmitted only in English; CNN now produces four daily half-hour news programs that are broadcast in Spanish to nineteen countries in Central and South America.

"The BBC/ABC colossus could pose a big threat to us," Christiane Amanpour, who is based in Paris, says. "But we have now created such a niche for ourselves that we're a household word." As the television networks sought to save money by closing bureaus and relying on pictures supplied by news services, CNN built credibility by being on the scene. "It's better to provide pictures than nothing at all," Amanpour says. "But how can you know what's going on, particularly in a situation like Yugoslavia? When there's a shelling attack in Sarajevo, it's awful. But many times it's a response to an attack. You can't know that if you're sitting in London. You miss the details. How do you know what you're voicing over?"

CNN's early investment--in people like Amanpour, and in leasing space on twelve satellites, which relay signals from nineteen overseas bureaus twenty-four hours a day--affords it another competitive advantage. Catching up is expensive. The annual cost of renting space on twelve satellites averages more than a million dollars apiece. The BBC, which is state-supported, does not have deep pockets. And ABC, which does have cash, has to make some difficult decisions, including whether to pursue its new alliance with the BBC or to build on its eighty-per-cent ownership in Worldwide Television News. The announcement of the BBC-ABC alliance, in March, was made before the partners had defined the nature of their marriage. "They're in London trying to get out of the mess they got into," a knowledge-able network executive said in late Juneof the ABC News team of negotiators, which was led by the ABC News president, Roone Arledge. "It was a press release. . . . That's all."

Perhaps the biggest advantage CNN has against upstart competitors is that it is a franchise with instant name recognition. The level of recognition was demonstrated in Somalia in June: while American and United Nations troops were unable to find the fugitive warlord Muhammad Farah Aidid, he did let reporters find him, and he declared that to keep abreast of events he had been hiding only in homes that received CNN. Ted Turner's office, in the CNN Center, in Atlanta, also demonstrates the recognition that CNN has enjoyed. The suite outside his office is a veritable shrine: thirty or so framed magazine covers featuring Turner are on the wall behind his secretary's desk; all around her sprouts a forest of plaques, awards, and trophies; everywhere are pictures of Turner with various Presidents--of the United States and of other nations. There are mementos. Turner's loud voice beckons a visitor to enter. He paces his giant office in shirtsleeves, clutching a can of Coca-Cola. Then he sinks into a burgundy couch that is nearly a cab ride away from his desk, at the other end of the room. On being asked to describe CNN's strength, Turner says, "We're welcomed everywhere in the world. What's the reason to have another one?" Still, he knows that CNN is open to attack from competitors on at least three fronts: it is not yet truly international; it is not local; it has so few overseas partners that its distribution system is stretched thin.

Over the years, Turner warned CNN employees that they would be punished with a fine if they used the word "foreign"; nevertheless, the common perception is that CNN presents news packaged from an American viewpoint. And news from an American viewpoint does not have mass appeal overseas, as the big three networks can attest, since they've never had much success selling their nightly newscasts elsewhere. Parochialism is an issue that the BBC and other competitors regularly use to club CNN with. It becomes a delicate point in a world in which nationalism is resurgent and many nations are already alarmed about American "cultural imperialism."

In describing CNN as "a global,English-language news service," Peter C. Vesey, who runs CNN International, identifies both CNN's niche and its frailty. From the outset, CNN has spoken in one language, and Turner has decreed that most newscasts be assembled in Atlanta. CNN has nineteen overseas bureaus; CNN International has a staff of a hundred in Atlanta and just three in London. While CNN is working to improve these numbers, at present forty per cent of the twenty-four-hour newscast on CNN International from Monday through Friday is recycled from CNN's domestic news; on weekends, eighty per cent is recycled. The international news is delivered from anchor desks in Atlanta, London, and Washington, and is produced in Atlanta, where Vesey is based. In March, responding to the BBC's World Service Television's linkup with Star TV, the most powerful satellite-distribution system in Asia, CNN launched a week of live programming from Asia. But instead of using a local news staff CNN sent three American anchors--Bernard Shaw, Larry King, and Lou Dobbs--to Hong Kong and Tokyo.

John C. Malone, who is the chief executive officer of Tele-Communications, Inc., the nation's largest cable operator, and is one of the part owners and board members of CNN's parent company, Turner Broadcasting, worries that CNN has too strong an American identity. "This is a debate I've had with Ted Turner for years," he said recently. "Ted's going to have to have some local partners. Ted hates partners." Indeed, before the BBC linked up with Star TV, whose parent company is partly owned by the Chinese government, Turner rejected an alliance with Star. "They took a deal we turned down," Turner says of the BBC. "They're working for the Chinese."

Tom Johnson says CNN is shoring up its defenses and broadening both its language and its anchor-correspondent base. "We will also serve the world in other languages," he says. "How many of those languages, I don't know." But surely, he goes on, CNN will one day replace the two hours a day of subtitled translations now shown in places like Japan, and, in addition to Spanish and Russian, will probably broadcast at least some news in Japanese, Chinese, and French. CNN is making a push to hire more non-American journalists--it recently recruited Riz Khan, who was born in South Yemen; Sonia Ruessler, who has dual Argentine and Dutch citizenship; and Linden J. Soles, a Canadian--to anchor CCNI newscasts from Atlanta. "We're not all American-looking and sounding," says Amanpour, who herself was born in Britain, and whose parents are British and Irani.

CNN's strong American identity reflects a deeper vulnerability: By pursuing its stated goal of being "the world's only twenty-four-hour global television-news network," CNN is obviously determined not to be local. It does not provide abundant local, or even national, weather, sports, and community news in the countries it sends its newscasts to. It does not promote local personalities. "That's where he's truly vulnerable," Herb Granath, the president of ABC/Capital Cities' Video Enterprises, which has many partnerships all over the world, says of Ted Turner. By presenting international news in English, Granath says, Turner bumps into the reality that more nations want news in their own language. "I do believe there will be a national news service in most European countries with twenty-four hours of news in the local language," Granath goes on. Such local services are or will soon be operating in France, Hong Kong, England, Germany, and parts of southern China. In this sense, CNN suffers from the same threat that the new video democracy poses to any channel that offers a uniform program at a single, prescheduled hour: viewers want, and increasingly enjoy, the freedom to customize what they watch, and to make their own schedules.

A third vulnerability flows from the first two: CNN's lack of local partners. "Ted Turner does not like to be a junior partner to anybody," says Ed Turner, CNN's executive vice-president in charge of news-gathering, who has been with CNN since its inception and is not related to Ted. While CNN has affiliate contracts with several hundred broadcasters around the world, who pay the news network to broadcast whatever part of its news report CNN chooses, it has fewer local partners than it would like who distribute CNN as a channel, or channels of which CNN can claim at least partial ownership.

Prodded by his board, Ted Turner has in recent months undertaken what one of his executives calls "a strategic shift." In June, he acquired a stake in the German all-news service, but he says that so far this investment is not paying off. "It's losing a lot more money than CNN did in our startup," he told me in June. In addition to investing in the Russian TV channel, he has made barter deals with other broadcasters. CNN has a contract with TV Asahi, in Japan, which pays CNN ten million dollars annually for the right to unrestricted use of its material in exchange for distributing two CNNI news hours over its cable system. Recently, CNN expanded its relationship with China Central Television (CCTV), the Chinese national network, which can reach as many as six hundred million viewers. In return for CNN news packages, CCTV provides CNN with news footage and with the right to sell two minutes of advertising a day (one minute in prime time) on CCTV. According to Kay Delaney, the executive vice-president of advertising sales for Turner Broadcasting, CNN hopes to recruit a single buyer--Coca-Cola, for example--to pay ten million dollars a year for the spots.

"If there's one sea change taking place for Ted, it's to have more partners," Tom Johnson says. However, Turner's strength has been as a buccaneer, an inflexible visionary, and partnerships require accommodation and compromise. The combination of what are still too few local partners and an admittedly weak satellite signal over Asia means that CNN has vulnerabilities in its distribution system. The situation in Asia is tough, Ted Turner says. He notes that little English is spoken there, that the BBC has a link to a stronger satellite signal, and that some parts of Asia have over-the-air networks but no viable cable or other distribution system. "There are people staying up nights trying to get that worked out," Johnson says. Herb Granath says, "Turner's distribution in Europe is primarily in hotels and embassies. And if you watch CNN overseas you'll discover he has few sponsors."

TURNER claims not to be worried by the fresh competition. The BBC, he knows, is pressed for cash--one reason, he suspects, that the British have sought that still dubious alliance with ABC. "It's not so easy," he says of his competitors. "Anybody can do it, but you've got to be prepared to lose a lot of money. The more people that get into it as partners, the less there is on the upside."

But overseas partnering does seem to be the vogue as communications companies seek to share risks and costs and to lower local political barriers. Right now, CNN's stiffest competition is not any single international competitor but many competitors. They change from continent to continent. In Europe, it comes from, among others, Sky News and Euronews, whose programming includes news from the BBC. In Africa and the Middle East, the Middle East Broadcasting Company, which owns United Press International, is now a CNN rival, and so is the BBC. In South America, the Reuters/Telemundo alliance looms, and so do NBC and Grupo Televisa S.A., the world's largest Spanish-language broadcast company, which now owns half of PanAmSat L.P. and plans to launch three private satellites that will distribute Spanish news and programming. In Asia, the BBC has more viewers than CNN, and there are burgeoning news services in Japan, China, Indonesia, and India. In Australia, where Murdoch's News Corporation continues to be a dominant player, the national network has joined with the Canadian Broadcast Company to share technical facilities and crews. And, as the boundaries between the television set and the computer and the telephone converge, telephone companies may continue to join with one another or with giant communications companies, as they have begun to do both here and abroad.

Knowing just who the players are and who their allies are becomes increasingly difficult. CNN competes with Murdoch's Sky News but has a modest agreement with USA Today Sky Radio to distribute news on United and Delta Airlines flights. John Malone's TCI is a part owner of Turner Broadcasting, yet in Asia TCI is allied with the BBC as a partner of Star TV. "One of the problems one runs into on the transnational stage is that you start running into yourself with partners," Granath observes. ABC, for example, has the new alliance with the BBC and yet sells news and its magazine shows to another sometime BBC rival--Sky News--in Europe. In Asia, Turner is allied with Time Warner's Home Box Office and ABC/Cap Cities' ESPN subsidiary to distribute programs through a common satellite whose chief competitor is the BBC.

This suggests that there are at least two competing future models for world news. One is Ted Turner's. "Nationalism is not growing," he says. "Internationalism is growing. Look at the growth of the United Nations. In Somalia, the United States is part of the United Nations force." The Cold War is over, nations are no longer forced to choose sides, and CNN can be a single, common international carrier of news, Turner says. In the next breath, however, he says, "Localism is strong. I know that." Nevertheless, he thinks he has certain advantages. "The networks have closed down their international operations," he says, somewhat hyperbolically. Murdoch's Fox network, which a year ago threatened to start a news service, has recently scaled back its domestic plans. "We're the only distribution system that goes out to the whole world." And his will remain a low-cost network, he declares, noting that "the beauty of one language is that it spreads the costs."

In many ways, the development of global news parallels the development of an interconnected world economy. The world's elites--travellers, government leaders, diplomats, corporate and communications officials--want a common data base, which CNN supplies. They also want to know that a news standard is upheld--that the news strives for fairness and balance. For this niche CNN is now rivalled only by the BBC.

But there is a chasm between the elites and the mass of viewers, whose vision is primarily local. Instead of one channel, there may be hundreds of channels linked to global sources of news. TF-1 and Canal + can provide twenty-four-hour news in France, as they intend to, and then link up with ABC or with the Associated Press or Reuters to provide news from the rest of the globe. Thus, one model competing with Turner's might be a consortium of local or national news services linked to other national or to international services.

Like the broadcast networks, CNN can be crippled. "The concept of a world news network"--with bureaus everywhere and a single channel broadcastin English--"is vulnerable," Robert Wright, of NBC, says. "A lot of the world is still in the prior-to-television-news developmental phase. What is happening is that groups--language groups, cultural groups, and national groups--want an indication on the air that theyare being specifically served. And as privatization increases and more video news is available--distributed either by cable or by satellite or by broadcasting--those units that I just described will be very hungry. I don't think they will accept the national-international news package delivered via NBC or CNN as their bread and butter. They're going to want a much more customized version of that. The same way that WNBC would have no news business here in New York if all we offered were an hour and a half of national and international news delivered by Tom Brokaw."

To reach this larger mass of viewers, CNN would have to dramatically change its vision of a single, English-speaking global network. But to effect that change Turner would need to seek partners and would need to localize. "We don't want to alienate the American traveller who wants to know how his ball team did last night," Turner maintains. "But we are evolving. We will have editions in different countries."

Perhaps Turner will continue to change. Or perhaps he is now as self-satisfied as the networks once were. He claims to be unfazed by the competition. "If I were going to worry, I'd worry about the one-fifth of humanity that doesn't have decent drinking water," he said. "I'd worry about an area the size of Michigan that becomes desert every year. I don't worry too much about CNN. CNN is doing a pretty good job. And each passing day we get stronger." (c)


© 1996-2002, Ken Auletta - all rights reserved
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