How Can Broadcast News Survive?

You can't blame broadcast news for having a bad case of cable envy.

Fox News Channel has seen its profits double this year, thanks to growing ratings and higher fees from cable systems. NBC News can share its news-gathering costs with MSNBC, which has also turned into a big moneymaker. Even CNN, beleaguered by declining audiences and under pressure to bolster its program lineup, rakes in several hundred million dollars in profits every year.

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On the broadcast side, CBS Evening News With Katie Couric hit an all-time ratings low this summer. The network's morning program The Early Show continues to lag in third place. ABC News slashed 25 percent of its workers this year and, on September 7, its president of 13 years, David Westin, announced he's leaving — perhaps wary of having to make even deeper personnel cuts if he stuck around.

It's no wonder that many TV-news insiders believe the only way ABC News and CBS News can thrive in the future is by partnering with a 24-hour cable operation. No one questions the quality of the journalism the two news divisions turn out. Couric's newscast has racked up numerous awards and 60 Minutes is still the gold standard of TV reporting. Diane Sawyer has maintained her rep as a tireless and inquisitive anchor on ABC World News. But both networks are finding it increasingly difficult to cover costs as ratings erode and viewers get their headlines and analysis round-the-clock from cable and the Internet.

"In today's world, you have to have a wider base," says one veteran network news producer. "It almost doesn't matter how good a job you do. You need the tentacles of a larger communication company to spread the cost over a number of properties."

CBS employs some of CNN's on-air talent, and the two organizations have sporadically held talks about forming some kind of joint operation for more than a decade. CBS News president Sean McManus has said nothing is imminent. ABC News has held discussions about partnering with Bloomberg, which has bureaus all over the world and is carried by cable systems in the United States and abroad.

If the deals were simple to execute, they would have probably already happened. One major roadblock: The local TV stations affiliated with ABC and CBS still want personalities who provide instant identification with their networks. "When a crisis like the attacks on 9/11 happens, affiliates say, 'I want to see a Katie Couric or a Diane Sawyer, and I want to see coverage meant for us.' They don't want their viewers to hear, 'And now we go to Anderson Cooper in the CNN newsroom,'" says Neal Shapiro, a former president of NBC News. The networks themselves are not eager to give up control of their airwaves, either.

CBS News is trying to grow its revenues by producing shows for the Web, the CW, Showtime and Discovery Networks. Newly hired correspondents for ABC News are being asked to shoot and edit their own packages so that the network can cut back on the cost of electronic news-gathering crews. But such measures may not be enough to stop the market forces that are chipping away at them. "At some point, we have to partner," says an insider at one of the networks. "If you stay this small, you're going to atrophy and die."

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