Friday 30 April 2021 9:00 am

Screenshot: Will GB News’ traditional TV bet pay off?

This week

**Media Moment of the Week: Blair’s hair mare

**Will GB News’ traditional TV bet pay off?

**BT puts sport on the sideline

Read more: Screenshot: Is the Super League the biggest PR disaster of all time?

Media Moment of the Week: Blair’s hair mare

With allegations of sleaze, rows over John Lewis and Kevin Keegan-esque outbursts, it’s fair to say that all the attention has been on the Prime Minister this week. That’s a pretty good thing for Labour, but less good if you’re a former PM determined to stay relevant like, say, Tony Blair.

Tony Blair’s questionable lid sparked a flurry of memes (Image: ITV News)

Fortunately, Blair has a carefully thought-out strategy for avoiding a descent into insignificance. The former PM this week appeared in an ITV interview with a barnet so bad it sent Twitter into meltdown. Cue an endless stream of memes ranging from Lord of the Rings to Back to the Future — and pretty much everything in between.

Read more: Screenshot: Can cinemas bring Brits back to the big screen?

Will GB News’ traditional TV bet pay off?

For months now, two major players in the media market have been vying for pole position as they look to shake up the British TV market. Now, though, it seems to be a one-horse race. Rupert Murdoch’s News UK empire this week announced it was scrapping plans to launch a TV news channel, saying the project was “not commercially viable”. It’s still planning to produce news programmes for streaming platforms, but the scaling back of the venture means Andrew Neil’s more conventional GB News is effectively a lone runner.

In some ways, the development will come as a boost to GB News, cutting down the competition before it’s even started. But the comments could also ring alarm bells for the project’s backers and draw attention to one niggling question: how can a traditional (or ‘linear’) TV channel make money in the age of streaming?

GB News has had no problem raising capital, securing £60m from US media giant Discovery, Dubai-based investment firm Legatum and hedge fund manager Sir Paul Marshall after what it said was a heavily oversubscribed funding round. But running a TV channel is an expensive business — just ask Sky News owner Comcast. Bosses aim to keep a firm lid on costs — just £25m per year, according to reports. This seems optimistic, especially if GB News wants to attract top talent such as Piers Morgan, but Discovery is no stranger to running TV channels, and you have to trust they’ve done the sums.

And when it comes to securing an audience, GB News should be confident. Surging demand for news during the pandemic has boosted audience numbers and exposed potential gaps in the market. In her memo this week News UK boss Rebekah Brooks acknowledged there was “consumer demand for alternative news provision”, while Neil’s venture will also have a keen eye on the success of opinionated radio stations such as LBC and Talk Radio.

The question, then, is whether GB News can make its advertising bet pay off. If launching a linear TV channel in 2021 seems something of an anachronism that’s because, in many ways, it is. The BBC, ITV and Channel 4 are all scrambling to shift their focus to on-demand as viewers increasingly turn to streaming.

And yet reports of linear TV’s death have been greatly exaggerated. While the format has taken a hit during the pandemic, it remains an effective way of reaching large audiences in an increasingly fragmented media landscape. What’s more, it may actually be staging something of a comeback. Media analyst Ian Whittaker says scepticism of TV advertising is a “London-centric” view among media types, adding that increased viewing during the pandemic may even have sparked a “turnaround in sentiment”. Add to this the fact that GB News should secure a solid niche of older viewers with disposable income (an attractive demographic to advertisers), and the proposition doesn’t seem so outlandish.

Nor are bosses putting all their eggs in one old-school basket. GB News is expected to target some of its revenue through a subscription service, which would give extra access to paid-up members. This would provide some hedging against the uncertainties of linear TV, though convincing viewers to part with their cash will be a tough challenge in itself.

Overall, then, Murdoch’s scaling back of his TV ambitions will likely come as a relief to GB News, giving it a free run at its target market. The question now is whether its bet on traditional will pay off.

Read more: Screenshot: Will London ever be ready for tech IPOs?

BT puts sport on the sideline

Crystal Palace v Liverpool - Premier League
BT Sport has shaken up the TV scene, but the costly venture is starting to make less sense (Getty Images)

It’s been a crazy few weeks in the world of sport, and it seems the shake-up is not over yet. BT this week confirmed it is in talks to sell a stake in its TV arm BT Sport, with Amazon, Disney and nascent streaming service Dazn all said to be interested in the goods. Any deal could place the sought-after rights to the Champions League — as well as some Premier League fixtures — into new hands.

It comes at an intriguing time. The pandemic has ravaged live sport, bringing a surge in the value of TV rights screeching to a halt. And while the Super League — which would have hugely devalued BT’s Champions League rights — appears to be dead in the water, there’s still uncertainty over how the football landscape could evolve in the coming years.

In truth, though, BT’s misgivings about its content business have been around for some time. When BT Sport burst onto the scene in 2012 it derailed Sky’s dominance of football rights and sparked a bidding war that pushed prices ever higher. It was a smart move by then-boss Gavin Patterson, both as a means of drawing in broadband subscribers and in strengthening the BT brand (for here for more gems on this backstory).

But costs have escalated and sports rights are an unpredictable game, with bidders constantly at risk of being pipped to the post by a rival and left empty-handed. What’s more, BT is facing the huge and costly challenge of leading the UK’s rollout of fibre-broadband. The FTSE 100 giant has slashed the dividend to help fund this project, so a deal to cut its sports costs will no doubt go well with shareholders. 

In many ways, too, the move illustrates the changing face of BT. Under pin-up boss Patterson, sports rights were the name of the game; now Philip Jansen is focused on full-fibre. It may be less glamorous, but BT is following the cash.

The algorithm recommends

  • It was a good week for the advertising market, which saw its first green shoots of recovery. WPP booked a surprise return to growth in the first quarter, while official figures forecast a strong recovery for the UK market this year.
  • The family of Samsung’s late chairman is facing an $11bn inheritance tax bill on his estate. It’s one of the largest in history and the South Korean tech dynasty is selling off a huge collection of art to fund it.
  • There was a slew of tech earnings this week but most noteworthy was Spotify, which shrugged off concerns about a slowdown in subscriber growth.
  • Jon Snow is stepping down from Channel 4 News after 32 years in the presenter’s year. The veteran broadcaster will stay on at the channel, though, to front long-form projects.

Got a story? Drop me a line at james.warrington@cityam.com or on Twitter

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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