The move is supported by an interactive media venture also involving the two partners and computer software giant Microsoft Corp.
The NBC/Dow Jones deal will result in a new global TV network branded "CNBC: A Service of NBC and Dow Jones," scheduled to launch January 12, 1998.
The new service's structure comprises three parts: the merger of NBC's CNBC Europe and Dow Jones' European Business News (EBN), pending the European Commission's approval; the merger of NBC's CNBC Asia and Dow Jones' Asia Business News (ABN), and the amalgamation of CNBC and Dow Jones' resources in the US.
"All four channels (ABN, EBN, CNBC Asia and Europe) were young news services losing money. This is to rectify that," admits Allan Horlick, currently president and managing director of the NBC Europe operation, which overseas both the entertainment channel NBC Europe and business news channel CNBC Europe. He says one reason for retaining the CNBC brand name is because the channel is very profitable in the U.S. "CNBC is recognized as a strong brand."
In essence, Dow Jones has relinquished its role as a satellite TV operator to NBC, but retains its role as a content provider by giving NBC worldwide rights to all Dow Jones material and resources.
In Europe, program production of the newly formed CNBC will continue at EBN's current offices located near London's financial district, while marketing, distribution and ad sales is handled in NBC's West London headquarters.
Mr. Horlick has been appointed president of the new NBC/Dow Jones joint operation. Michael Connor, EBN's managing director, has resigned, while ABN's CEO Paul France stays on as president of the joint venture in Asia.
When the new CNBC begins transmission, it plans to retain EBN and CNBC Europe's combined distribution network, creating a service available for 24 hours a day in 15 million homes, and on air part-time in another 50 million households.
The Asian operation of the newly formed CNBC will replace the existing CNBC Asia and Dow Jones' ABN. The merged operation is expected to be in almost 9 million homes full time, and for part of the day in another 30 million households.
Advertising sales has been restructured with New York-based Steve Harley, currently ad sales director at Dow Jones International Marketing Services, to be installed as head of CNBC International Sales. He'll work with the sales team for the merged CNBC in Asia, Europe and New York, offering clients a potential global package.
This includes a multimedia offering that includes Dow Jones' international print brands, such The Wall Street Journal in the U.S., Europe and Asia, and the Internet site of MSNBC, originally an NBC/Microsoft joint venture.
Dow Jones is also now a minority shareholder in MSNBC and MSNBC Business Video, another Internet service offering live and archived video and audio material to mostly business subscribers.
The main casualty in Europe is the 56-member production staff of Financial Times Television, a unit of media group Pearson, which provided CNBC's programming and whose contract will be terminated in January.
Most of EBN's existing producers are expected to be retained to provide content on the new CNBC. Additionally, CNBC will have access to Dow Jones' 2,000-plus international correspondents via video links.
Copyright December 1997, Crain Communications Inc.