NEW YORK — The Walt Disney Co. is getting into the 24-hour cable news business.
ABC News Now was initially launched as an experiment by ABC News as a way to provide more complete coverage of the political conventions, and the Alphabet is considering a relaunch of the net with a business model based on advertising and subscription fees from cable and satellite operators.
“We’ve learned a lot about what we can and can’t do, and what the consumer appetite is,” said ABC News prexy David Westin. “We’re convinced from the data this is viable; the next step is to figure out how to put this business together.”
The cable net was picked up by 10 ABC-owned stations and 70 affiliates, which offered it free to cable systems in those markets as a digital channel. While the business plan for the net hasn’t been completely hammered out, Westin said the channel will be dropped from those cable systems and then relaunched both to cable operators and satellite distributors for a subscription fee.
Westin is expected to announce a staff for ABC News Now on Monday, including executive producer Michael Clemente, who had been running the channel on loan from “20/20,” where he was a producer.
Westin said the philosophy of ABC News Now will be different from that of 24/7 news networks MSNBC, CNN and Fox News. ABC News Now will draw on talent from ABC News rather than hiring producers and journalists to staff the channel. ABC built the network from the ground up to be all-digital and transmittable to Internet-connected devices such as phones and handhelds.
During the inauguration, for example, two dozen parade participants used Sprint video phones to provide footage for ABC News Now, while Sam Donaldson and Bob Woodruff anchored the coverage from Washington, D.C., and New York.
ABC News Now is available to about 65% of the country through its current deals with the affiliates, as well as 30 million Internet viewers through AOL, Comcast.net, SBC Yahoo! and Bell South DSL.
“The fundamental underlying idea is to take ABC News and make it available at any time of day over any device,” Westin said.
Initiative fits with a Disney philosophy recently articulated by prexy-chief operating officer Bob Iger at a Credit Suisse First Boston media conference. Disney, he said, is “placing its bet on content” that can be transmitted and received on a “platform-agnostic basis.”
But cable and satellite operators will see Disney’s initiative as yet another 24-hour news channel asking for carriage — and for subscription fees. Those fees are unlikely to be forthcoming, particularly since operators are girding to fork over a big fee increase to Fox News Channel when its long-term contracts start to expire next year.
Under increasing pricing pressure from satellite TV, cable operators can no longer easily pass on subscription fees to consumers in the form of a higher cable bill.
From a distribution standpoint, ABC News Now will be available only to those with digital cable, making it even more difficult to gain ratings and advertising dollars. Its digital-only status will put the channel at a disadvantage compared to Fox News, CNN, MSNBC and even low-rated Headline News — all of which are carried on analog channels and are available to nearly all households with cable or satellite.