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could not survive financially, and early in 2003, the parent company that owns theRegister was put up for sale.Bay TV, the local public affairs channel serving San Francisco, ceased operation for asimilar reason. Bay TV had been operated by KRON-TV, then the NBC affiliate, andKRON’s co-owned daily, the San Francisco Chronicle. But after the Chroniclecompany sold KRON to Young Broadcasting, the new owners lost the NBC affiliationand KRON became a money-losing station, according to industry financial analysts.Soon after taking over KRON, the new owners pulled the plug on Bay TV.But these were exceptions to the trend: head to head against broadcast newscasts, the24-hour local channels have scored striking gains. Paulus said New York 1 had a largeraudience in the morning than the broadcast news on the local CBS station, and it wasmaking inroads at other times of the day.“We are the wave of the future,” he said, predicting some local broadcast channels inNew York and in smaller markets will drop their local newscasts, as they continue tolose viewers and revenue to the all-news channels. Paulus’ prediction was echoed in thefears of medium- and small-market broadcast journalists interviewed, who were lookingover their shoulders as the new competition began attracting news viewers andadvertising dollars from their stations. One reaction: More discussions of outsourcednewscasts, where the UPN, WB or Fox station closes its newsroom and broadcasts anewscast produced across town by the ABC, CBS or NBC affiliate. But those are stillfollowing the “appointment viewing“ schedule, when television audiences are driftingmore into radio- and Internet-style “on demand” viewing.Those strategies also could not counter a strength of the new channels: breakingnews. Paulus and Smythe said breaking news was attracting more and more viewers totheir channel, and Knopf was planning a new news channel devoted entirely tobreaking news.September 11th was one of the biggest breaking stories in the history of New YorkCity, and New York 1’s audience soared. But Paulus provided a more routine example:At eight o’clock on a Sunday night, during NBC’s popular commercial-free broadcastof the movie “Schindler’s List,” a man tried to take over the observation deck of theEmpire State Building. Unable to interrupt the network movie, WNBC-TV ran a“crawl” about the story across the bottom of the screen. According to Paulus, that crawlprompted thousands of viewers to switch channels from NBC to New York 1, thatgrabbed the audience by offering extended live coverage. Even if local news channelsare not the first to break in with a bulletin, most have firm rules to stay with a breakinguntil long after every broadcast channel has returned to regular programming.“Events hammer at broadcasters,” explained Smythe. “We make money on breakingnews. Broadcasters don’t.” Smythe added that broadcasters trying to compete bybreaking into entertainment programs with live news coverage, lose both money fromcommercials that are bumped and alienate viewers who want to watch the regularprograms.Managers of local news channels said their current services were just a beginning:Paulus said New York 1’s news coverage and programs were being used to launch newmicrolocal news channels and Internet-delivered news services. The first spinoff, hesaid, was a channel for taxi cabs, a joint service with Fox News Channel providingnational news.BEA—Educating tomorrow’s electronic media professionals 65