NBC AND MICROSOFT: IS THERE SYNERGY?

Byline: Frederic M. Biddle The Boston Globe

``There will never be speaking pictures,'' cinema pioneer D.W. Griffith declared in 1924.

Is history repeating itself in the widespread - and perhaps equally shortsighted - scoffing at what NBC and Microsoft Corp. will attempt starting at 6 a.m. today?

That's when the NBC-owned America's Talking cable channel, now seen in 22.5 million U.S. homes, converts to MSNBC. As a 24-hour cable news channel, MSNBC is the first contestant in a race to establish the next CNN (Fox will launch its own cable news channel by summer's end).

Whether television needs another round-the-clock news channel is, in itself, debatable. But the historic question is: How well will NBC's half of the $500 million joint venture synergize with Microsoft's half? MSNBC comprises the cable channel plus an MSNBC interactive on-line news organization (http://www.msnbc.com) that will not only repeat the news at a site on the World Wide Web, but greatly supplement it.

As August's Republican Party convention is covered by the cable channel, for example, an on-air caption might refer viewers to the on-line network, which would offer the entire text of Bob Dole's stump speech or full-motion video of his entire day's agenda, only seconds of which made it onto NBC's TV channels.

``Our viewers' great complaint is they don't get enough context, don't get enough depth,'' says NBC News President Andy Lack. ```Your news is too shallow,' they say. `We want more information and we want more context.' ''

Hollywood's silents segued into talkies; in what Lack calls ``a very interesting analogy,'' television is beginning to merge with the personal computer - and MSNBC's customized news on demand is the hybrid medium's first big test, one of the first so-called ``killer applications'' that may make cyberspace a truly competitive medium, enjoyed by tens of millions of people who still can't program their VCRs. NBC and Microsoft are anticipating that as more people become comfortable with more powerful, easier-to-use computers, they will prefer their news on line; MSNBC is intended as a bridge.

Of course, the requisite technology isn't available yet. The cool Bob Dole spy-cam scenario that Lack envisions won't exist on MSNBC this year, or next, because not enough pipeline is available to transmit it through cyberspace; nor are most home PCs powerful enough to download it.

For several years, theater projectionists fussed with gramophone records, queuing them up to silent movies as they played, with unintentionally hilarious results. Finally, Hollywood figured out how to synchronize sound on the film itself. Voila: ``The Jazz Singer.''

But nothing on MSNBC anytime soon will approach the wonder of Al Jolson singing on-screen at the local Odeon in 1927.

One might think that the channel would begin with a bang, because NBC owns rights to this year's Summer Olympics. But because the broadcast network will be so comprehensive in its coverage, Lack admits, the new cable channel won't offer much (if anything) that NBC doesn't.

Any visitor to the prototype Web pages MSNBC has posted over the past few weeks can see that for now it's just another Web site, emblazoned with the NBC peacock and summaries of a few stale NBC News series, such as the recent junket to Ireland taken by the ``Today Show.''

CNN already boasts better, if less ambitious, Web sites of its own, and viewers interact daily with on-air talent by asking questions on line on programs like ``Talk Back Live.''

``We're doing today a lot of what MSNBC says it will doing in a few months,'' insists CNN President Tom Johnson. Meanwhile, CNN's 24-hour headline news channel continues to live up to its name, leaving the main CNN channel to cover important news events uninterrupted for hours on end - as with O.J. Simpson's trial or, more recently, the hearings on the White House's acquisition of FBI files.

That leaves critics charging that MSNBC Interactive won't sufficiently distinguish itself, leaving MSNBC an expensive also-ran to CNN. A venture that NBC and Microsoft would rather compare to the transition from the silents to talkies might, in fact, be more like 3-D or Cinerama - a gimmick with a very limited future.

``You sound like all those people who predicted 500 television channels in two years,'' snapped one executive at a rival broadcast network who didn't want to be named, when asked about his own network's more timid steps at hedging its future. But he's got a point.

It's easy to overrate what MSNBC Interactive will be, at least at the beginning. For example: On-line users may be able to download all the news addenda they want at the Web site, but they won't be able to watch the MSNBC cable channel side by side with the Web site on their PC, unless they have a tuner that feeds the signal directly into their computer.

That's now standard procedure for anyone who wants to watch any kind of TV - even ``The Price Is Right'' - on his or her PC.

``To me, it doesn't add a lot of value'' to watching the cable telecast and the MSNBC Web site on the same appliance, says Peter Neupert, Microsoft's vice president of strategic partnerships. Microsoft and NBC think that MSNBC viewers wanting elaboration of the cable channel's reports will willingly switch over to their PCs from their TVs, and vice versa.

No one can guess the potential audience for this vision of MSNBC. Pressed for a prediction of how people will watch news on the day his contract expires in 2002, NBC News' Lack guesses that ``there will be as many people getting their news from MSNBC (on line) as from cable, and maybe many, many more. Arguably, it may be two, three, five times more.''

That's not the concrete sort of projection on which Microsoft or NBC's parent, General Electric Corp., usually relies when investing $250 million each over the next five years. But for Microsoft, Neupert says, ``the objective won't be what will be reached in the next year or two. The objective is to create an asset of enormous value.'' Instead of worrying about whether MSNBC can immediately sell more product for the world's largest software company, Microsoft is amassing a trove of content to make irresistible the Web and its corner of the Web, the year-old Microsoft Network.

It's the Microsoft mind-set: content, content and more content. Chairman Bill Gates earlier this year bought the Bettmann Archive for a Microsoft corporate cousin. And Microsoft just started the Web magazine called Slate. MSNBC is the company's biggest content grab yet. Although Neupert and other Microsoft executives speak of MSNBC in terms of partners building an enterprise, many observers see Microsoft leveraging itself in the shrewdest possible manner.

``Microsoft has this reputation as a nerdy company, and here's the opportunity to put celebrity faces on it,'' says Gary Arlen, a media analyst based in suburban Washington, D.C., and president of Arlen Communications. ``It's getting a great deal if it's getting access to Gumbel and Brokaw. When you think about it, it's a cheap investment, given what it costs to launch your own (television) network.''

NBC has more pressing motives. Viewership of the three broadcast networks' evening newscasts is down 30 percent over the past decade, rendering almost irrelevant the recent ratings resurgence of ``NBC Nightly News'' against ABC's top-rated ``World News Tonight.'' Meanwhile, the fixed costs of operating NBC News have increased, making it necessary to amortize them somehow. Successful prime-time newsmagazines like ``Dateline NBC'' aren't enough - and in any case they air on broadcast television, whose overall viewership is shrinking.

The economics are so pervasive that ABC last December announced that it, too, would begin a 24-hour cable news channel in 1997. The network shelved the project last month, however, after a business plan foresaw losses of $500 million to $800 million before it could break even. Rupert Murdoch's Fox, which doesn't have a traditional network news division, is paying cable systems $11 per subscriber (hundreds of millions of dollars, total) to carry its 24-hour channel, and last month gave the nation's biggest cable operator an option to buy a stake in the channel in return for a guarantee to bring it into 13 million homes. CBS just bought a Spanish-language all-news cable channel and made a point of saying that was only the beginning of its cable television interest. Clearly, concern for the bottom line has combined with the broadcast networks' primal fear of being marginalized by changing technology. Few will be much surprised if ABC jumps back in.

Fat bankrolls aren't the only sign of how seriously the networks are taking the beginning of the transition away from broadcast television, and nowhere is it clearer than at MSNBC. Everyone who's anyone at NBC News will be on the new network.

Tom Brokaw will alternate with Bryant Gumbel and Katie Couric of ``Today'' interviewing the day's newsmakers on ``Internight,'' an 8 p.m. program that's MSNBC's answer to CNN's ``Larry King Live.'' Jane Pauley will host ``Time and Again,'' a 7 p.m. look at the century's biggest stories, using NBC News archival footage. At other times, lesser-known NBC personalities will anchor the news on MSNBC cable, much as CNN's anchors do, though the new cable channel's exact format hasn't been announced. MSNBC's day will culminate at 9 p.m., when Brian Williams - the 38-year-old star correspondent who has been mentioned as a potential successor to Brokaw or Gumbel - will anchor ``The News with Brian Williams,'' a prime-time newscast for viewers who missed Brokaw earlier.

The Williams newscast demonstrates that NBC is so committed to MSNBC that it is willing to risk cannibalizing viewership of ``NBC Nightly News with Tom Brokaw'' on the West Coast, where the newscast airs at 6 p.m. (9 p.m. Eastern).

Moreover, NBC is aggressively plugging MSNBC over the airwaves, angering local NBC affiliates, who fear that the more successful MSNBC proves, the more their own stations will suffer. ``Promoting NBC's own stars on another channel is diluting the brand, and there is a lot of concern,'' says Mike Carson, general manager of Boston's NBC affiliate WHDH (Ch. 7) and a member of the network's affiliate board. ``It's serving NBC well, but not anybody else.''

Lack acknowledges Carson's complaints. But he and Microsoft executives say that take-no-prisoners commitment is necessary to make MSNBC succeed against Cable News Network, consistently the most underrated news operation in the history of television. CNN has parried all-news, all-the-time competitors before, most notably ABC, which in 1982 jointly launched the Satellite News Channel with Westinghouse Corp. The channel lost $80 million in its first year before selling out to CNN owner Ted Turner.

TUNING IN  Local listings for the new channel were not immediately available, but complete cable listings were expected to be posted today at the MSNBC Web site: http://msnbc.com.

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Photo: (Color) NBC News President Andy Lack seeks to give v iewers more news content with ``InterNight.''

The New York Times

Box: TUNING IN (See text)