Good news or bad news for new news channels?

During the bank holiday weekend there have been several well sourced stories suggesting that two brand new news channels are set to launch in the coming year to tackle the supposed domination of the BBC News Channel and Sky News.

The Guardian’s media editor, Jim Waterson, suggests that one is being planned by Rupert Murdoch’s News UK, another by a group branded GB News, which is being advised by Sir Robbie Gibb, a former BBC executive and advisor to Theresa May.

As someone who used to run a rolling TV news station, the late and somewhat lamented ITV News Channel, I have my doubts that these can be successful, at least as traditional news channels.

Who had the biggest news wall? I think we know

 

There are many challenges to launching a new TV news service, as can be seen by the fact the NBC Sky World News channel failed to make it to air, but lets start with the most basic.

While News UK is denying that their new service will be Fox News UK, it is clear both companies like the idea of a hot-topic led news channel disrupting TV news, as LBC has done with speech radio.

And that quickly leads you to look at Fox News – the most successful example of this kind of programming.

Fox News makes serious money. Fox Corp turned over $2.75B in 2019, around 90% of its revenues coming from Fox News and its subsidiaries.

 

Why wouldn’t News UK want to replicate its success here?

But the size of the market here is the issue. While Hannity can boast audiences running into millions, the UK audience for TV news channels is tiny. When I was at ITV News (admittedly a while ago now) we estimated that there were around 100,000 people watching rolling news at any single time. That was for the BBC, Sky and ITV combined.

Of course, in the event of a big story the audience numbers would shoot upwards. But the increases were never sustained. And that meant it was only ever organisations that were prepared to lose money who could stay in the market. Sky could afford to use its news channel as a loss leader, ITV could not.

Even if you assume that these prospective news channels will have bare-bones newsgathering, done in the cheapest way possible, it will still be very hard to break even, let alone make huge profits, without changing the whole TV news market.

That’s not to say it is impossible, just difficult. It brings to mind the rash promises made by the local TV news companies when Jeremy Hunt tried to set-up a new generation of TV news suppliers. They too looked to the United States and saw a profitable model.

The other baseline issue that will need to be addressed is Ofcom regulation. To get a TV broadcasting licence, you need to promise Ofcom that you will deliver certain things – x number of hours of news, and so forth. And you have to agree to certain restrictions, the key one being “due impartiality”.

A lot gets made of the concept of impartiality but a fair amount of it is in the eye of the beholder.

The BBC may take one approach, LBC or TalkRadio another.

LBC, for example, can run (or at least, used to run) programmes fronted by Nigel Farage because it can point to the station’s inhouse liberal, James O’Brien, as evidence it includes, and treats fairly, other viewpoints.

Nigel Farage in full flow before getting canned

It is not impossible for a TV company to take a similar approach. And remember that Fox News has been on a partisan journey too. It wasn’t that long ago that Sean Hannity had to have a balancing liberal presenter in Alan Colmes.

But in this day and age, why bother with a broadcast licence at all? Enough of us now own smart TVs that the idea of having a streaming service delivered entirely through a subscription app has merit.

That seems to be the business model News Corp are toying with. Ofcom does in theory regulate on-demand programmes, which might be taken to be television-like. But no-one has done this for news before. Break new ground and you get a big say in the future terms of trade.

To me, then, it seems that it is unlikely that a new TV news channel, as we currently envision them, can become an immediate big financial success. The overheads are too high and the audience is too small.

But could a new entrant make a success of a SVOD news-based chatshow channel, with low overheads and little oversight from the regulator? That seems to me to be a new proposition that might have a potential future. And that seems to be what News UK is thinking too.