In his 1999 'Nieman' report, Marc Gunther of 'Fortune' noted, "Twenty years ago (in 1979), there was no network news 'business'. Back then, the networks earned enough money from entertainment programming that they could afford to run their news operations at a loss. Today (in 1999), ABC, CBS and NBC operate in a competitive environment in which most viewers have dozens of channels from which to choose. That has transformed not just TV news but the entire television industry.

"Those who own these networks all demand that their news operations make money. The TV entertainment business, in particular, has deteriorated because programming costs are rising while, due to more competition, ratings are falling and hit shows are harder to find. To some extent, news programs are now (in 1999) looked to as ways to subsidize entertainment and sports offerings — just the reverse of the way things used to be.

"What do such changes mean for the practice of journalism at the Big Three? Management consultants are hired to analyze costs and look for cuts (such as closed foreign and domestic bureaus, laid off staff, eliminated some money-losing documentary units, and curbed convention and election coverage). During 1998, the three evening newscasts reached a combined average of about 30.4 million viewers in 22 million homes.

"This represents a reach that is greater than the total circulation of the nation’s 10 largest newspapers. (However) their combined audience share has declined from a peak of 75% in 1980 to 47% in 1998. (These percentages represent the share of audience that is watching TV during the dinner hour.) Ratings for hard news have slid, in part, because of the explosion in alternative news sources. Consumers can pick up stories from all-news cable, Internet news sites (including those operated by the networks), local stations (which broadcast up to six hours of news a day in major markets), business cable news outlets, the Weather Channel, sports news channels, all-news radio and National Public Radio.

"Prime-time news programs connect with even larger audiences. CBS’s '60 Minutes' (Sunday), the industry leader, has attracted an average of 13.4 million homes so far during the 1998-99 TV season. And '60 Minutes' is only one of 14 prime-time news shows appearing on the Big Three (which included 5 editions of 'Dateline'; 3 editions of '20/20' and 2 editions of '60 Minutes'). No cable program or newspaper has anything approaching that kind of reach. The Big Three networks are still, by far, the most commanding voices in American journalism and therefore one of the most important forces in our democracy.

"The evolution of network news into a profit-making business unfolded gradually, driven by a series of events dating back more than two decades (to 1977). The success of '60 Minutes', which became a Nielsen top 10 program in the 1977-78 season, 10 years after its debut, was an enormously influential factor. Roone Arledge’s arrival as President of ABC News in 1977 created even more momentum for industry-wide change.

"He saw no reason why news couldn’t make a profit, too. So Arledge set out to get more programs onto the air (and) also used his talents as a producer and promoter to package news, including serious news, to appeal to a mass audience. By the late 1980’s, ABC News—still under Arledge’s leadership—had become the industry leader in profits and prestige. Soon the other networks were trying to catch up by adopting a similar game plan, producing more news and doing so in ways that appealed to non-news audiences.

"To produce an original hour of a newsmagazine typically costs between $500,000 to $700,000. An hour of entertainment costs the network at least $1.2 million. This cost advantage for news isn’t quite as great as it seems; sitcoms and dramas can be repeated while most news programming is original. Still, newsmagazines have started to do more repeats and 'updates' of stories that have previously aired. So they don’t have to produce original episodes year round, and this drives costs even lower.

"During the 1998-99 TV season, the average price for a 30-second commercial on 'Dateline' ranged from $90,000 to $130,000, depending on the night of the week it aired. Advertising rates for '20/20' averaged $135,000 to $160,000. On CBS's '48 Hours', the cost was $80,000. And spots on '60 Minutes' (Sunday) average an impressive $240,000. All of these rates are much higher than those generated by an evening newscast, though, except for the '60 Minutes' rates, they are still below the network averages for prime time entertainment. Still, given their lower costs, news shows right now (in 1999) are a better business for the networks than entertainment programming."

On '20/20', Victor Neufeld told 'The New York Times' the stories were produced for ''the conservative, traditional American household. We're not an urbane, hip, ultra-sophisticated program and we don't want to be. Barbara (Walters) is a major entity and she deserves consideration. Hugh (Downs) and Barbara are the soul of the program. They're not hip and they're not boringly old; they're middle-American superstars.''

In 1993, there were 3 newsmagazines on ABC, Victor Neufeld's '20/20', Tom Yellin's 'Day One' and Rick Kaplan's 'PrimeTime Live'. In all, there were "a total of 11 news shows where '60 Minutes' and '20/20' once reigned alone." Competing and "banking" for stories against shows on the same network, Tom Yellin told Kenneth Clark of the 'Chicago Tribune', "The environment has changed because there are more of these shows and it makes the competition for stories much more intense. We work it out.

"The last thing we want to do is mediate it out through the (ABC) executives. There was a very complicated story about a murder in New Haven which both '20/20' and I wanted. Victor and I worked it out and they got the story. It happens every week. We'll be working on a story and somebody says they've gotten a call from 'PrimeTime'. We have some informal rules: If somebody gets there first and has clearly done enough reporting to, in effect, own the story, they get it. If we get there second, we lose."

At CBS, it was reported, "Joe Peyronnin, executive assistant to News President Eric Ober, arbitrates all disputes, keeping '60 Minutes', 'Street Stories', '48 Hours' and 'Eye To Eye' with Connie Chung, from each other's throats." Andrew Heyward acknowledged, "But there's no question that there's a scramble going on, not only between networks, but within networks, to lock down the high-profile stories that these magazines feel will bring in viewers."

Victor Neufeld added, "There is obviously more competition with more programs and more intensity to go after the big stories. I think that's natural, but we're all professionals. There is no major problem; there is no constant conflict. From time to time there is, but it's generally worked out." Rick Tulsky of the 'Philadelphia Inquirer' recalled, "A lot of times, those shows get their ideas from newspapers. We've got more staff and more people to do the work than they do."

Steve Friedman of 'NBC News' and 'Dateline NBC' conceded, "It does happen - just as stories appear in the newspapers right after they're on the evening news. Any time you pick up one of the papers, you'll see that what we've done on Tuesday night, they've done on Wednesday morning … You've got to have compelling stories, well told. If you do that, you'll get a good shot with the viewers."

The 'Chicago Tribune' learnt, "Far more important to network executives than the creative inspiration for stories is their cost. And the magazine shows are working out just fine for cost-conscious network brass, faced with dwindling audiences, lower ratings and a compelling bottom line. They cost a fraction of what Hollywood entertainment has come to cost."

Joel Segal of ad agency McCann-Erickson informed, "G.E. (which owns NBC) is cost-conscious; (CBS Chairman Laurence) Tisch is cost-conscious, and ABC is famous for being cost-conscious. These guys watch the buck and the way they do that is, instead of taking programming out of Hollywood where the talent is very expensive, they produce these lower-cost shows.

"They don't have problems with content questions in a newsmagazine. This is real … The news has plenty of sex and violence, but that's OK - it's modern history. Hollywood can compete if they choose to. Let's say they didn't pay the talent what it's demanding, and they went with unrecognized names as they've done with low-budget movies. That would be their way of competing. You couldn't make another 'Cheers'; the costs got out of hand. Those days are definitely over."

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