As a phalanx of well-tailored media executives sipped on lukewarm white wine and flicked slivers of smoked salmon onto their plates, David Rhodes set out his philosophy for running one of the largest news organisations in the world.
“You have to believe that the basic journalistic activity that you’re doing has value,” the Sky News executive chairman told a lunchtime satellite event at this year’s World Economic Forum in Davos. “And then you need to find a strategy to assert that value in the marketplace.”
Flanked by esteemed panellists from Fortune and Daily Mail-owner DMG Media, the news man went on to declare that the approach of “reorganising of already-known facts” into the types of bulletins for which Sky News was once renowned was “on its way to being dead”. Instead, in an age of predictive artificial intelligence, the industry’s future lay in the core journalistic tenet of “revealing something that has not previously been known”.
Little over a week after his comments in Switzerland, and Sky News staff were given their first glimpse of how Rhodes will implement this journalistic philosophy at the Comcast-owned news outlet in practice.
In a speech delivered to the outlet’s army of journalists, producers and advertising teams, the former CBS president unveiled what he dubbed ‘Sky News 2030’; a new ‘premium-first approach’ that would see the loss-making national broadcaster move efforts away from solely linear news, to a more digital ‘multi-platform’ approach.
The address marked Rhodes’ first stamp on the company since he and number two Jonathan Levy took the helm almost exactly two years ago. For an opening gambit, it was a big one: arguably the most significant strategic shift at the outlet since media baron Rupert Murdoch founded it as the UK’s first ever 24-hour news television channel over 35 years ago.
But with legacy news channels grappling with an existentially threatening cocktail of dwindling viewing figures and revenue from online advertising drying up, the sector’s direction of travel – Sky News’s executive editor Levy – demanded his outlet rose to the occasion.
“When we think about how Sky News can continue to ‘win’ in this rapidly and continually changing environment, we think that we can win with premium, video-first storytelling and premium, video-first journalism,” he tells City AM.
In practice, this will mean the channel funnelling fewer resources into the kind of live and breaking news programming that helped it to become the respected operation it is today, and more into potentially lucrative areas like events, video podcasts and paywalled content. Or – to adopt the corporate-speak used by Rhodes during his speech to staff – Sky News would go from ‘broad proposition [and] multi-platform’ to a property that was ‘premium, video first [and] build for a digital future’.
“That doesn’t for one moment,” Levy says, “mean we’re abandoning our heritage in breaking and live. Quite the opposite. It just means we need to think of all our different platforms and where we can use them in the most optimal way.”
Beth Rigby, political editor, Sky News (Photo by Alison Jackson/Getty Images)
‘A proactive move’
Levy, who has spent over two decades at Sky News in roles across production and journalism, is adamant that the traditional breaking and live product will – to the outside observer at least – remain at the forefront of Sky News’ offering. But, according to Bella Monckon, a research analyst at Enders Analysis, that doesn’t stop the overhaul from being one of the the most ambitious – and progressive – of any major news broadcaster in the UK in recent years.
“It’s really quite an active – as opposed to reactive – move from Sky,” she tells City AM. “There are other companies that have done it [abroad] – CNN in the US for example – but as a UK broadcaster they’re on the front foot.”
Proactive as the move may be, it has also solicited questions from others about whether Sky News has the wherewithal and the commitment to pull it off; even from within its own four walls.
One senior executive in Sky’s commercial team told City AM that while Rhodes and Levy have undoubtedly helped reshape Sky News to make this new approach to revenue streams possible, it is a way off making a success of it.
“I think David Rhodes is good,” the ad exec said, speaking on the condition of anonymity. “The Sky News leadership used to be completely against advertising and monetising its content in any form. That didn’t change until Rhodes took over
“But they’re still only just doing really basic things, like putting pre-roll ads [YouTube-esque adverts which play before viewers can watch a video they’ve selected] in their app,” they added. “They’ve got a long way to travel if they want this to work.”
They also pointed to the fact that only recently did the channel famed for its TV News make a habit of filming its podcast recordings; the kind of “fundamental hygiene” that any major, modern news organisation should be doing. “We are in the video business, after all,” they said.
Recently, however, that has begun to change. When speaking to City AM, Levy points to the success of ‘Trump 100’ – a new video podcast it launched on the day of the 47th President’s second inauguration, which promises to plot the first hundred days of Trump’s second term in office. The podcast has already attracted glowing reviews, and raked in a quarter of a million listeners its first week; a glimpse, he says, of the kind of content that the Sky News audience can come to expect more of.
From reach to engagement
Other concerns centre around the channel’s ability to persuade consumers to part with hard-earned money for journalism that used to be free. And doing so in what is fast-becoming an increasingly competitive landscape.
In the UK alone, The Independent, inews, Reuters and even the Daily Mail have all recently followed the country’s broadsheets’ lead and put some or all of their journalism behind a paywall. A decision which Paolo Cuttorelli, a senior vice president at subscription management firm Evergent says is far from a “straightforward task”.
“Pricing will need to be deftly tailored to strike a sweet point between affordability and profit,” he adds.
Fail to tread that balance, then Sky News runs the risk of losing its considerable reach without cultivating the sort of loyal community that it can effectively monetise. The outlet has the second most-downloaded news app in Britain. And according to the Reuters Institute for the Study of Journalism, its content reaches the third-highest number of people in the UK after the BBC and The Guardian.
But the move to focus more on quality engagement rather than purely scale has jeopardised the kind of cache and influence that comes with such enormous reach.
“At the moment Sky News has an audience that is broad but shallow,” the Sky commercial executive said. “The challenge will be whether it can generate a new audience that is smaller, but deeper.”
Pull that evolution off, and there are opportunities abound. As much of the media becomes increasingly polarised, advertisers will be more drawn to the more sober analysis provided by its embarrassment of esteemed journalists like Ed Conway, Mark Kleinman and Sophy Ridge.
There are also, says Alex Wilson, a senior strategist at Pitch who advises advertisers on where to allocate their marketing spend, more rudimentary – but equally important – benefits. Making viewers set up accounts on the Sky News app or website would, among other things, “mean they can sell a more attractive [and personalised] offer”, he says.
But should that transition fail, it would mean a loss of digital and TV advertising revenue that isn’t sufficiently replaced by the other avenues it is eyeing up; the kind of lose-lose scenario that would invariably prompt some difficult decisions at Comcast headquarters.
For now, though, there is no suggestion that ‘Sky News 2030’ will in any way incur the kind of sweeping job losses that legacy media staff have come to expect with strategic overhauls like this one.
In his speech to staff last week, Rhodes spoke of moving Sky’s news operation away from “duplicative manual processes” to ones “powered by innovative technology”. In the news industry, euphemistic speak of that genre tends only to mean one thing. But when asked if the strategy will precipitate any redundancy rounds, Levy is emphatic.
“This is not a cost reduction exercise,” he says. “It’s a programme of editorial and commercial transformation.”
Transformations of this nature, says Cutorelli, are never easy to pull off. Not least when they are taking place in an industry undergoing the plethora of difficulties, challenges and change as those to which legacy media is being subjected.
But in Switzerland, as a troupe of dutiful waiters clear away the plates of well-fed and well-hydrated Davos attendees, David Rhodes struck the kind of defiant tone required to make a success of the overhaul on which has staked his outlet’s future.
“I’ve been doing a version of one of these jobs since 1996 and every year people said whatever [development] was, was existential,” he said. “There were people saying that cable was existential. That the internet was existential. The search advertising that we’re worried about being disrupted today, people said was existential.
“But media are always shape shifting. You’ve just got to believe that the basic activity that you’re delivering has value.”