NBC AND MICROSOFT ANNOUNCE $440M ALL-NEWS VENTURE
Published December 15, 1995
NBC and Microsoft Corp. announced their partnership yesterday to launch a 24-hour news and information cable channel and "a companion interactive online service," according to NEWSDAY. The channel will be known as MSNBC Cable, and is expected to be on the air in six months. NBC will transform its America's Talking cable channel, "giving the new service an immediate entree into 20 million homes and eliminating a hurdle most new cable channels face -- getting on the dial." Microsoft will pay NBC $220M over five years for a 50% stake in the venture. The two companies will also invest $200M each during the next five years in other ventures. Martin Yudkovitz, President of NBC Interactive Media, called the deal the "first major example in television of an acknowledgement there's got to be a fundamental change in the way the TV industry approaches the future" (Elizabeth Sanger, NEWSDAY, 12/15). NBC President & CEO Robert Wright: "This is not CNN. This is a unique service. If we just wanted to offer an interactive component we could do this ourselves. ... Hopefully the two of us together will be more ambitious" ("NBR," PBS, 12/14). REAX: In San Francisco, Michelle Quinn calls it a "clear indication" Microsoft Chair Bill Gates "wants to be a media mogul" (S.F. CHRONICLE, 12/14). Despite the "excitement" yesterday, "plenty of questions remained about the channel," according to Bill Carter of the N.Y. TIMES. They include whether the cable industry will "embrace a director competitor to CNN to whether there is enough audience to support two all-news networks." Some cable operators could block distribution by saying changing the format of America's Talking means "terms of their contract with NBC has changed" (N.Y. TIMES, 12/15). John Durie writes it means the end to Ted Turner's news "monopoly profits" and "underscores the importance of content and distribution in the new media age" (N.Y. POST, 12/15). HOT LINKS: The online service will be available through The Microsoft Network, with further possibilities explained yesterday on how broadcast, cable, and PCs will "mingle." One example: NBC News might just touch on the budget battle in Washington. But interested parties could turn to the cable channel for interviews and analysis. Computer users could use their PCs to type in income and other facts to find out how competing budget proposals would affect them personally (Elizabeth Sanger, NEWSDAY, 12/15). NOT FOR SALE: After the announcement, GE Chair Jack Welch "quashed recent speculation" that GE would sell the network, although "he did not rule out" bringing in a partner. Welch said GE would not have approved NBC's purchase this week of Olympic rights if it intended to sell. Welch also "expressed regret" attempts to buy TBS had failed (BLOOMBERG BUSINESS NEWS/ATLANTA CONSTITUTION, 12/15).