Friday, September 14, 2007

At CNN, No Reuters, or bin Laden - New York Times

The gifted former TV Newser blogger Brian Stelter, now a New York Times media correspondent, has one of the first stories about the consequences of CNN's decision to dissolve its 27-year-old relationship with Reuters: they missed the story.

I say this not to gloat, since I am not short Time Warner and neither employed by (anymore) nor a shareholder (anymore) in Reuters, but to commiserate. Because if CNN's stated reason for dropping Reuters is basically accurate there will be quite a bit more of these gaps in coverage until the cable news network realizes its goal of taking the money they have saved and putting it to work for them on the street. And there is serious reason to believe that it won't be remotely possible to replace the coverage organically.

This kind of money won't go far spent a la carte. I shudder to think that CNN hopes a big part of the slack will be picked up by iReporter contributions -- but these days you never know

A Few Million Bucks Doesn't Go a Long Way

The terms Reuters was seeking for renewal is not public knowledge. The Financial Times reported the value was less than $10 million, and Reuters reported it was $3.5 million, as reported by Sources told that the $10 million figure was the upwards of Reuters was expecting, which would amount to making the valid (but ultimately unconvincing) argument that even the same level of content is worth more going forward since it can be monetized in more ways.

The truth is that kind of money won't go far spent a la carte. I shudder to think that CNN hopes a big part of the slack will be picked up by iReporter contributions -- but these days you never know.

A couple of staffers in some Middle East location "with real infrastructure" can range over a couple of hundred miles for about half the $3.5 million a year CNN was paying Reuters, a long-time wire service TV professional tells me. So, for that kind of money, you buy two small hardship bureaus covering a few hundred square miles with the sort kick-ass communications a mission-critical team needs to make your network competitive. If Reuters would have settled for $7 million -- a whopping %100 increase in one contract cycle -- that means you have saved enough money for four bureaus. Remember: these can't be firemen, hours away from the story. And none of them would have got the Bin Laden video anyway.

Or, for the same money, you get the world served on a platter and somebody to complain to. You just have to share it with your competitors. But a tie is better than a loss, especially when you lose by trying for a win that is almost never possible.

Not Exactly Going It Alone

Much of what Reuters provided CNN is available from other sources with whom the network still does business, including the AP, so the network is far from being terribly exposed. But even the casual CNN watcher knows that the vast majority of their video comes from "partners" -- deals with local broadcast stations everywhere -- which collectively amounts to a domestic video news service, so the loss of a major supplier of overseas good is apt to be noticed.

This model not only works well, it may be the only one that does work. For years the broadcast networks have been cutting back on their own bureaus and relying more heavily on contractors and wires -- to save money. It is this simple: once you decide to start covering baseball yourself you have to cover every game in every city every day. Or, you pay pennies on the dollar you'd otherwise spend to have the AP do it for you.

I didn't think the public rationale for the breakup was very convincing. Even at the time it seemed to have much more to do with being penny wise than taking the opportunity to do great things suddenly possible. And CNN now does itself no favors, among those of us who may be inclined to admire the bravado of taking control of one's destiny, by explaining why airing the Bin Laden tape 30 minutes after its competitors was not a big deal, as reported by the New York Times:

A CNN spokeswoman, Megan Mahoney, downplayed the delay. “What’s important is to fully vet these kinds of videos before putting them to air, which we’ve consistently done over the years,” she said.
I wonder which blog will be the first to establish that CNN a) ran the Bin Laden tape as soon as it got the chance and b) managed to vet the Cho tapes and get them on the screen pretty darn quick.

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