Media Conglomerate to Drop Channel One

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Primedia Inc. has announced that it will classify Channel One, the for-profit news network for schools, as a discontinued operation in the fourth quarter of 2006. The move by the New York City-based media company can be construed as a first step by Primedia to rid itself of the network, which has struggled financially for years.

Whether that means the daily news network will be sold or shut down is still up in the air. But Amanda Cheslock, a spokeswoman for the Washington-based network, said in a Dec. 21 interview that as of now, "it's business as usual at Channel One."

The network airs daily broadcasts, which include two minutes of commercials, to 7 million middle and high school students nationwide. Advertising revenues for Primedia's education segment fell almost 28 percent in the first nine months of this year compared with the same period in 2005, according to company documents. That segment's revenues all come from Channel One.

The falling revenues come despite the work of Chief Executive Officer Judy L. Harris, who came to Channel One in April 2005 . Primedia blames the revenue shortfalls on the end of big advertising contracts in late 2005, the loss of much of Channel One's government advertising, and lackluster progress this year in securing more advertising.

Target of Anti-Commercialism Groups

Channel One has also suffered the slings and arrows of anti-commercialism watchdog groups such as Commercial Alert, which is based in Portland, Ore., and Obligation Inc., based in Birmingham, Ala. Gary Ruskin, Commercial Alert’s executive director, said he is not surprised by Primedia’s move to drop Channel One, saying in an interview that the network is “the dregs of the dregs” of the company’s holdings.

He added that he doubted the company would find a buyer, citing reports that Primedia unsuccessfully tried to sell the network in 2002. "It's clear that Channel One is in its death throes," Mr. Ruskin asserted.

Ms. Cheslock of Channel One replied that the network has "received positive testimony and response from hundreds of educators underscoring the value of [Channel One] in the classroom."

In addition, she stressed the network's commitment to news. She pointed to such examples as Channel One's recent coverage of the malaria epidemic in Mozambique, a multimedia project on the First Amendment, and a "town hall" meeting with U.S. Secretary of Education Margaret Spellings scheduled for March 2007.

Stay tuned.

Vol. 26, Issue 18

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