Sky TV the one serious option for 'saving' Newshub
Thursday, 11 April 2024
This analysis was originally published on March 2 after Warner Bros Discovery announced it was planning to close Newshub. Yesterday it confirmed it would pull its news division off air in July, and axe 294 jobs. Speculation is mounting that another New Zealand news agency could step in. Tom Pullar-Strecker explored this scenario.
ANALYSIS: There now seems only one scenario under which Newshub journalists, or at least some of them, could keep their jobs.
And that is if Sky Television decides to take them on to set up its own news and current affairs arm.
But that may be more than just a long shot.
Sky Television won’t say whether it could pick up some of the pieces of Newshub.
But it is clearly leaving the door open.
Commenting on the day of the shock Newshub announcement, a spokesperson said that it was keen to explore the role it might play as a Kiwi broadcaster.
“We know the importance of news to our customers and the importance of plurality of news in New Zealand generally, and as a New Zealand broadcaster we are keen to explore how we might continue to play our part in delivering strong local news,” she said.
That sounds quite encouraging.
Importantly, Sky TV has all the infrastructure to step into the role that is being vacated by television channel Three owner Warner Bros Discovery, even including suitable broadcast studios gathering dust.
All it would really need is the people.
It would have the option of offering news through its advert-supported free-to-air Sky Open channel, formerly Prime, and perhaps putting some content behind its pay-TV paywall.
It is worth noting that Sky has been making strides pushing into the television advertising market.
Indeed, that will have been one of the issues that has compounded Warner Bros Discovery’s financial woes.
Announcing its interim financial results on Wednesday, Sky boasted that it had increased its television advertising revenues 12% in the second half of last year, when it estimated revenue for the sector as a whole fell by 16%.
Assuming Sky TV might need $15m to $25m a year to run a minimum-viable news product, that would be a significant commitment but one within its means.
The pay-TV firm has been increasing its dividend and last week announced it planned to splash out another $15m on share-buybacks.
As a result of the closure of rival Spark Sport, Sky could realistically expect to slash north of $50m a year off its annual content costs in the near future by reducing payments to NZ Rugby and other sports organisations.
Up to now, Warner Bros Discovery has been producing Sky’s News First bulletin — which plays on Sky Open at 5.30pm — under a revenue-sharing deal, so any recouped revenues from that could go into the pot to produce its own news.
Without some sort of investment in news, Newshub’s closure will leave Sky Open with a prime-time hole.
In the medium term, Sky may need to broaden its business away from its current heavy reliance on sport, and there are few obvious opportunities other than news and current affairs.
But it is clear that no arrangement has been put in place for Sky to pick up any of Newshub as yet.
Assuming it is looking at this opportunity, it will be doing so from scratch right now — trying to work out if it is a commercial opportunity that stacks up.
A complication is the significant uncertainty facing traditional broadcast television more generally.
It appears doubtful there will be much appetite or cash from TVNZ or the Government to keep DTT television broadcast infrastructure running beyond the next few years.
And there is a question-mark hanging over free-to-air satellite television broadcasts beyond 2032.
That means all television-based news and current affairs services may need to go online in the medium term, which will be a big change for any media outlets still in the news game.