ABC News Targets Broadband Subscribers

“Wow! Holy Cow, that was a large airburst, filling the sky.”

That outburst more than a decade ago from CNN reporter John Holliman and the blow-by-blow coverage of the first Gulf War helped put Ted Turner’s 24-hour cable television outlet on the world map.

Now, with another Gulf War on the horizon, Disney-owned ABCNews.com is taking a page out of CNN’s book, announcing the launch of a fee-based 24-hour news service — available only to users with high-speed Internet connections.

The ABC News Live webcast launched Wednesday for subscribers to its existing ‘ABC News On Demand’ service, which charges $4.94 per month for access to delayed news clips and other programming. In what amounts to another big client win for Seattle’s RealNetworks, the 24-hour news stream will be hawked exclusively to paying members of its $9.95 a month RealOne SuperPass service.

With Yahoo on the verge or rolling out a competing fee-based online video service, the exclusivity of RealNetworks’ content partnerships has emerged as one of its most crucial chips.

ABC News Live, an Internet-only cross between CNN and C-SPAN, is being targeted towards a daytime audience with access to broadband connections at workplaces. “At a time when more people are getting their news online during the day, it is critical that we make more content available to our audience,” said Bernard Gershon, general manager of ABCNews.com.

The Internet-only service will offer share content with the ABC television outfit and ABC News radio partners around the country. It won’t be exclusively focused on war coverage but will intersperse sports news, the financial markets and entertainment news.

A company spokesperson said the launch of ABC News Live was timed to coincide with the looming war. “The focus will be on live events. It’s really for people who want to check in and see what [White House spokesman] Ari Fleischer is saying at the White House or to see and hear what Donald Rumsfeld is saying at the Pentagon briefings. We will have live shots from street of Kuwait City or Bahrain,” the spokesperson told internetnews.com.

Immediately after the events of September 11, the huge flood of visitors to online news sites slowed page loads to a crawl and ABCNews.com is hoping similar demand once the war begins will drive paid subscriptions to its 24-hour news service.

“We see spikes in usage that are driven mainly by news events. Whether it’s Powell speaking to U.N. or the Columbia shuttle disaster, those news events drive tons of traffic to our site,” the spokesperson explained.

But Jupiter Research analyst David Card is skeptical about the value proposition for ABCNews.com. “Video news during wartime may be somewhat compelling, but the primary audience is at work, so I’m still pretty skeptical,” Card said, noting that ABC News had set its expectations fairly low.

“Consumer survey data suggests that demand for paid online content is very fragmented — there’s no killer category,” Card said, nothing that the fragmentation makes programming like RealOne SuperPass and the coming Yahoo Platinum appealing. “They aggregate a lot of different content – news, music, movie clips, games even – at a relatively low price, so customers don’t have to pick and choose a la carte,” he added.

With the market for online multimedia content maturing, Card projects companies like RealNetworks, Yahoo, AOL and Microsoft’s MSN will be “well positioned to offer this kind of aggregated content.”

For ABCNews.com existing On Demand subscribers, the addition of ABC News Live is a major carrot (there won’t be an increase on the $4.95/month price point) and industry observers believe Real’s $9.95 per month fee is in line with what consumers are comfortable with.

“Consumers appear to be comfortable with most generalist paid content packages at a $1 (American Greetings) a month to $10 (RealOne) a month range. Consumer Reports and the Wall Street Journal may be able to get away with more, but I am dubious that news will command a premium,” Card explained.

Wednesday’s launch of ABC News Live has set tongues wagging that the cable outlets — CNN, MSNBC and Fox News — would follow suit. Officials at those companies could not be reached to comment on its online premium plans and Card believes CNN and MSNBC are “more likely” to launch its own Web-only live stream.

“CNN is better as a package within AOL or Real. In fact, everybody is,” Card said, noting Fox has been conservative with its online rollouts. “It’s also a big question mark whether their [Fox’s] talking heads approach will do well during wartime, or whether they’ll move more to a hard news approach. I’m especially skeptical of opinionated talking heads for at-work audiences, but who knows, it hasn’t been tried,” he added.

In its announcement, ABCNews.com rolled out research from eMarketer that showed about 37 percent of the U.S. workforce (50.1 million people out of a total of 135.1 million) go online at work, and 86 percent of at work users have broadband access in the workplace. In the last year, the company said almost 70 percent of its visitors accessed the site with a broadband connection, making it a logical step for the 24-hour all-news service.

ABC News Live will also introduce subscribers to “virtual control room” for special events where users can choose from watching up to four simultaneous feeds displayed in a quad-screen format. Live briefings, major headlines, and related reports from ABC News will accompany breaking news footage.

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