May 15, 1997 1:00 PM PDT

ABC News takes on the Net

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Today ABC News officially jumps into the hotly competitive Net news fray with a news supersite that competes head-on with established players like CNN and MSNBC.

Expect to see some blood as the media titans slug it out for the coveted prize: advertising revenues.

At the end of the day, they're all looking to the Internet as a relatively inexpensive way to pay the rent. Launching a 24-hour cable channel--an idea ABC was considering--would have taken a massive cash infusion. But an Internet site is a much smaller investment for companies like ABC, a unit of Walt Disney.

Backed by partnerships with the giants of the corporate world, the news heavyweights have set up Web sites that use strikingly similar formats for their services.

ABC, like its competitors, clearly is betting that the masses who watch its television shows and listen to its radio broadcasts will bookmark its site in their browsers. For the Internet, the network has formed partnerships with the America Online (AOL) and Starwave, aimed at boosting its distribution and technology. Progressive Networks will be providing both RealAudio and RealVideo.

The plan is not only to provide 24-hour national news coverage, but also to use its 200 television affiliates to provide detailed local news, where it will have plenty of competition from dozens of sites trying to grab ad revenues now going to newspapers and local yellow pages.

The site will have features as varied as local weather and up-to-the minute news. It also features a partnership with the popular site, ESPN SportsZone. The goal is to use as many of its resources to leverage its presence on the Web.

"ABCNews.com represents a powerful combination of the best brand in network news, the best talent in real-time news reporting, and the leading pioneers of Internet-based media," stated Tom Phillips, president of ABC News Internet Ventures.

Bill Doyle, an analyst with Forrester Research, thinks ABC has the right idea, especially with its heavy-hitting deals with AOL and Starwave to back it up. He expects MSNBC to retain its lead on the Internet, with CNN and ABC close behind.

"They have good distribution and good content," Doyle said. He added that those who have not yet jumped onto the Net and who may not have any plans to do so may be left in the dust.

"CBS and Fox are not in contention. Those guys need to wake up." He noted that newspapers, too, had better get into the act or "run a risk of being eclipsed."

"Looking ahead," Doyle said, "Forrester expects online news to be dominated by two to three titans who get the upper hand in distribution technology and content."

Of course, that means ABC is going to have to develop strong content as well as develop brand loyalty on the Net.

ABC is already a big name in news. But David Locke, an analyst for Volpe, Welty, wonders just how many people will differentiate among ABC, NBC, and CBS.

The answer could make all the difference, even with the distribution deals ABC has cut with AOL and Netscape Communications.

Locke contends that not many people could say definitively who pays Tom Brokaw's check or which station carries Seinfeld. "When you're watching a television program, you're not watching a network--you're watching a show," he said.

"My cynicism at this point is overwhelming. I'm not sitting in my chair right now wishing and hoping for another news site. Maybe Starwave will bring something to it that makes the site interesting."

The gamble, he added, is that "if you're attached to the brand name or TV or cable show, you'll likely show gratitude toward it on the Internet." It's not a bet he's willing to make.

"To the extent that people have no idea what they're watching, it's just one more news site among the plethora of them that are going to bloody themselves in a fight for limited advertising revenue."

Regardless of who wins, the fact that giants like ABC, NBC, and CNN are even entering the online news business is a pretty healthy sign for the Net.

As Doug Wills, a spokesman for Progressive Networks, said, ABC's launch "is a significant milestone that is hard to ignore. What we're really looking at is major media companies looking at the Internet as this bootstrap interactive TV outlet."

 

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