After Talk TV’s retreat, what does the future hold for UK broadcast news?

Rupert Murdoch's Talk TV has migrated to an online only existence. What does the move say about the future of UK TV news?

May 4, 2024 - 07:07
After Talk TV’s retreat, what does the future hold for UK broadcast news?

Sky News' Politics Hub with Sophy Ridge

GB News’s victory over Talk TV happened in two ways: gradually and then all at once.

The start-up broadcaster was winning in the ratings war with the Murdoch-backed channel from the moment the latter launched in April 2022.

Its viewership, while hardly mainstream, grew steadily in the face of over a dozen Ofcom complaints, raking in audiences that regularly beat its more storied rolling news rivals, Sky and BBC News, at peak times. Over the same period, it also gradually cemented its place as the “house broadcaster” of the Conservative Party, partly via a much-criticised strategy of employing Tory MPs as presenters.

The Murdoch-backed Talk TV on the other hand, with its star-studded line-up of presenters and considerably deeper pockets, struggled ever to gain a cultural or financial foothold in the UK. An enormously hyped unveiling was met by widespread apathy, and, barring a few agenda setting interviews with the likes of Trump, Cristiano Ronaldo, and the TikTok prankster ‘Mizzy’, any momentum the channel had at launch fizzled out.

Then, at the end of April, what little competition remained between the two channels ended: Talk TV, having concluded its last day as a fully-fledged TV channel, was to become just ‘Talk’, as it pivoted to an online-only existence.

A battle that ripped through the broadcast news sector—and tore up most insiders’ previous interpretation of impartiality—was over. The scrappy, and at times amateurish, start-up that was founded in 2021 had triumphed over its newer, better funded rival.

Any schadenfreude prevailing among staff at GB News’s Paddington Basin HQ, will have soon evaporated, however, as consecutive rounds of bad news promptly made the victory a pyrrhic one.

First, 40 redundancies were to be made across its production and presenting staff.

In order to carve out a niche as the home of anti-woke, and gain credibility with a small but committed viewership, the channel had splurged on high profile presenters like Jacob Rees-Mogg and Nigel Farage the previous year. The aftereffects of such free spending had manifested itself in the shape of an £80m black hole in the channel’s finances.

Shortly after the cuts, Sir Paul Marshall, the former hedge-fund manager responsible for bankrolling much of these ballooning losses, announced he was stepping back from the board. Maintaining his 41 per cent stake in the company, Marshall, who also owns the conservative online magazine Unherd, cited a desire to “focus on other business interests”; a coded reference, in the eyes of many, to him gearing up to make a bid for the Daily Telegraph.

An impossible industry?

These two broadcasters’ respective difficulties encapsulate, in their different ways, two inescapable elements of the broadcast news industry: how high the barriers to entry are, and how much money it then costs to maintain market share once you’ve launched.

Having set up in 2021 vowing to adopt a start-up mindset with “lean” operations (too lean at times), GB News has drifted far from its original moorings. Rees-Mogg, who presents a daily show for the channel, is on a reported £350,000, and with high profile recruits such as Nigel Farage and Lee Anderson already on its books, and the prospect of Boris Johnson joining for its election campaign, the company has been far from spendthrift. Over half of its losses (£42.8m) were realised just this year.

Meanwhile at Talk TV, Rupert Murdoch is said to have lost nearly £100m before pulling his fledgling station off air.

“Broadcast news in the UK is very expensive to do,” says Gill Hind, head of TV at media analysts Enders Analysis. “Even if you have economies of scale and pool resources abroad as some outlets do, it’s really expensive to get content up and running.”

Even at the more established outfits Sky News, the BBC and ITN (news producer for ITV, Channel 4 and Channel 5), the news segments are all loss-making. In November last year, the cash-strapped BBC was forced to announce a major shake-up of its news operation, while Channel 4 News costs twice as much to put on than it makes from advertising, according to its old boss Dorothy Byrne.

But despite the pursuit’s loss-making status across the gamut of UK broadcast, there is, in the medium-term, little chance of it changing in any material sense.

“Putting on news programmes is the cost of doing business, the cost of having a public service broadcasting licence,” says Steven Barnett, Professor of Communications at the University of Westminster, “Those are the obligations laid down for the channels.”

The advertising quandary

The cost of putting on a proper news programme is exaggerated in financial terms by a truism that is the same across all commercial channels: advertisers are far more enamoured by the prospect of appearing alongside fluffy entertainment than hard news.

This leaves other, more profitable areas of TV channels responsible for picking up the slack left by the capital-intensive news operations.

“Not surprisingly, if you’re an advertiser, a lot of the time you don’t want your company or product to appear in the news environment,” says Enders’ Hind. “And you can understand why you might night want your brand to appear immediately before or after something that happens in Ukraine, for example.

“This means that the income you get for the news programme if you’re ITV, or news channel if you’re Sky, is a lot less per viewer delivered than it would be for lighter, entertainment programmes.”

For the commercial stations, this phenomenon has been made all the more difficult by a decline in advertising revenue that has affected all formats of broadcast. Companies are increasingly moving their ad operations to social media and Google search, which prompted Channel 4’s chief executive to declare that TV broadcasters were in “market shock territory”.

The fact that year alone advertising revenue at big broadcasters fell by 12.5 per cent is enough for Barnett to argue that serious questions should be asked about the outlets’ current business models. “It’s interesting that in Channel 4, ITV and Sky, we still have some very, very good broadcasters of news and information,” he says. “But as advertising revenue diminishes, that will become more difficult to sustain.”

A lack of advertising revenue has—for slightly different reasons—also been a major stumbling block GB News and Talk TV. Many brands, perturbed by being associated with the channels’ more outlandish, controversial content, have given them a wide berth.

Talk TV opened without any advertisements. Meanwhile at GB News, firms including cider brewers Kopparberg and Nivea were so determined not to advertise that, when some of their ads appeared automatically as part of a Sky Media advertising bundle, they actively pulled them, issuing an explanatory statement.

This has led the likes of GB News to seek other revenue drivers, including an aggressively promoted viewer-funding model. The page promoting the scheme, which includes five, 10 and 20 monthly packages, complains that people “will stop at nothing to have this channel and free speech shut down. That’s why we need your help”.

GB News: the libertarian non-profit

However, there is a degree to which, according to professor Barnett, the success of this push, and the difficulties it has attracting advertisers, is irrelevant to the overall aims of GB News. “Losses are only going to get worse. But that’s not the point. GB News is an ideological project. It is not and has never been a commercial project.”

This, Enders’ Hind says, makes the channel’s future very difficult to predict: “Whether GB News will stay as a linear, on-air broadcaster, or follow Talk TV into online only, is a really difficult question, because it’s not run to try and gain profitability. It’s run to influence the public, and so as long as it has backers willing to invest that amount of money, its future is secure… Even if it was able to get its share of ad revenue, it would still be hugely unprofitable.”

This stands in stark contrast to the channel’s original commercial aim which, according to Andrew Neil, whose time as the outlet’s chairman lasted just eight days after it launched, was to break even within the first three years.

Sky News to fly the nest?

One unintended effect of the noise and controversy that the new, right-leaning channels have attracted is to keep people’s gaze from the future of another, once equally disruptive force in the broadcast landscape: Sky News.

Set up by Rupert Murdoch in 1989, the channel was the first commercial news outlet in the UK and our first rolling 24-hour news channel. It is now owned by the US conglomerate Comcast, and a condition on the purchase was that Comcast, which also owns US cable network NBC, would keep the loss-making Sky News outfit on air for a minimum of 10-years.

“Although 2028 feels like a long time away, it will come quite quickly,” says Professor Barnett. “That’s certainly something to keep an eye on. Comcast has been quite a benign and generous funder. It has done what it said it was going to do, it hasn’t pushed back, it hasn’t tried to push the boundaries.”

“It’ll be interesting to wait and see, but Sky News has definitely been a very valuable addition to the news ecosystem.”