NEW YORK CITY--NBC and Microsoft will work together to bring a 24-hour cable news channel to hundreds of millions of TV viewers and Internet users, once broadband data access is universally available.
Opening to the strains of theme music from NBC News, General Electric president and CEO Bob Wright headlined this morning's announcement here, assisted by Microsoft chair Bill Gates, who spoke from the NBC News studio in Hong Kong. "Today, NBC and Microsoft are coming together to provide news for the next millenium," said Wright.
Under the plan, Microsoft will pay $220 million over the next 5 years to purchase a 50 percent share in the NBC cable system that broadcasts America's Talking. The AT channel, which currently has 20 million cable subscribers. will become MSNBC. MSNBC will provide 24-hour news for TV viewers and will simultaneously offer continuous news coverage online, initially over the Microsoft Network (MSN). Both companies have committed $200 million to fund the joint venture. The online/cable offering is slated to launch by the third quarter of 1996.
"Both companies are saying we believe in the world of interactivity. Interactivity equals the Internet and we're betting that over time video will become an important data type," Gates said. "We think this [joint venture] will make the news far more interactive than it has been," he added.
"I'm surprised they're not doing something larger; it seems that this is a comfortable bite size to take on," said Jerry Michalski, an analyst from EDventure Holdings. "They [Microsoft] have the resources to do a lot more--one segment seems pretty easy," he said.
According to NBC news chief Andy Lack, the venture will attract "a whole new generation of viewers--particularly those 16 plus." Microsoft's Gates emphasized that these Net-savvy users will be linking to online offerings using a variety of devices in the future. "This is not about transferring TV to the PC. Over time there'll be a variety of devices to link to the Internet, including a wallet PC with wireless connectivity. We want to cover all those devices," Gates said.
In a bow to cable operators, Lack stressed that the venture will emphasize local news coverage along with global events. "Localism will be a dynamic element, it won't be just a 5- to 10-minute window." Playing up the theme of "more is better," news anchor Tom Brokaw, who was speaking from Frankfurt, Germany, noted that the joint online/cable deal will give the NBC News organization a much larger forum for daily content.
NBC will take responsibility for managing the cable venture and for all news content. The pair will share management for the online news project. In response to questions about conflict of interest, NBC's Lack stressed that his news group will have complete control. "Microsoft will have no editorial input," Gates said.
Wright added that the 24-hour news service will offer immediate coverage, in-depth analysis, and access to the NBC video archive. Support for both the online and cable broadcasts will come from subscriber and advertising revenue.