Television News: New Course or Main Course?

Michael Hedges July 9, 2010 Follow on Twitter

Television news is an everyday challenge. Everybody wants more, better, faster yet there’s considerable cost. As new media makes everything available to anyone business plans constantly change. And competitors want to eat you.

“News is important for the image of politicians but not necessarily for all viewers,” said ProSiebenSat.1 Media Group CEO Thomas Ebeling when he made clear his intention to jettison news channel N24. “Our company loses about €50 million every year with the news business in Germany. We had to solve this problem.” German politicians skewered Mr. Ebeling for his inconvenient truth.

News and information programming has long challenged broadcasters, particularly in the private sector. It is capital and people intensive, revenue streams are restricted and audiences ebb and flow with major events. Yet news channels continue to be attractive brands.

N24 has now been spun-off to its former director Torsten Rossmann, former der Spiegel chief editor Stefan Aust and former Spiegel TV managing director Thorsten Pollfuss. The new company N24 Media also absorbs production company MAZ&MORE. The aim is to create a major private sector news and information production house.

That seems to be the business plan. ProSiebenSat.1 Media took a €41 million charge on the transaction and signed N24 Media to a multi-year contract – reportedly €25 million a year – for news and information content. N24 Media gets to write-off about one-third of its 227 employees, ProSiebenSat.1 Media contribution €12 million to social charges. N24 will also supply news and information content, apparently, to Austrian commercial broadcasters.

Mr. Rossmann has made the rounds of German media since the announcement (July 2) to talk up the plan, the future and a direction for television news in Germany. He began by disagreeing, lightly, with Thomas Ebelings’ assessment of television news. “News is important,” he said to der Standard (July 6). “It is a relevant part of our society. N24 will adequately play its role in the future.”

“We will keep the news portion of the total program at around 40 percent” he said when asked about competing with other news channels. “The morning is prime time for a news channel. We serve the interests of our viewers just right. The evening…is the most contested.” Offering evening news programs at night, he said, would not be a winning plan. German public broadcaster ARD virtually owns the evening TV news position.

N24 is not and will not be a 24 hours news channel. That plan, said Rossmann, won’t work. “When N24 was launched on the air in 2000 on the air, it was clear very quickly that a 24-hour news channel in the German market would have no chance. So we started off the afternoon with hourly news and broadcast magazine programs and reports. In the evening, we come with high-quality documentaries supplemented with political talk shows. We are now copied by n-tv.” That would be RTL’s news channel n-tv.

N24 originated as an IPTV project when KirchMedia bought news agency ddp and tried to buy n-tv from RTL. Bloomberg had a hand in N24’s early days. When KirchMedia crashed spectacularly , helped by German publishers, banks and even Rupert Murdoch, serial entrepreneur Haim Saban stepped in with baskets of cash forming ProSiebenSat.1 Media. Bloomberg’s “cooperation” faded and NBC Universal (CNBC) stepped in. Saban sold ProSiebenSat.1 Media to private equity giants Permira and Kohlberg Kravis Roberts (KKR) in 2006. After four years, the CNBC “cooperation” ended in 2008. Permira and KKR expect cost controls.

"We will produce a different, stronger news format.” When asked if that meant giving N24’s newscasts a particular political spin, like News Corporation’s Fox News in the United States, Rossmann demurred. “I have always refused,” he said to media website viSdP (July 2). “Decades of the audiences’ experience with public service information allows no room for partisanship. N24 is a balanced, critical and business-friendly (channel) in the tradition of the German journalism.”

Viewers in Germany can find news programming in considerable quantity. Evening news programs on ARD Das Erste, RTL II and Sat.1 are center-pieces for channel branding.  Public networks ARD and ZDF jointly produce a morning and midday news blocks.

Those channels offering news programs have become more differentiated. Main evening ARD news block Tagesschau, on the air since 1952, is the traditional, high-budget category leader. RTL II News has focused on news for a more youthful audience with reasonable success. Sat.1 Nachrichten, which will continue to be produced by ProSiebenSat, sits somewhere in the middle. Morning and midday news blocks on Sat.1 will be produced by N24 Media through 2014 under the current agreement. News is roughly ten percent of the program output from ARD and ZDF while considerably less at RTL and ProSiebenSat.1 Media channels, according to ALM figures in 2009.

RTL’s n-tv news channel was launched in 1992 in cooperation with CNN/Time Warner when the giant news broadcaster was intent on expanding its international footprint. RTL bought out the Time Warner stake in 2005 to achieve “greater flexibility.” Like N24, long-form talk shows make up the majority of the broadcast day, with break-aways for live coverage. This week n-tv broadcast live from the Sea Life aquarium in Oberhausen to witness the World Cup predictions from Paul the Octopus.  

Times, though, are changing. As viewers adapt to new media, broadcasters are sure to follow. “The internet and mobile services are certainly a complement to traditional new,” said N24’s Rossman. “Presence in these markets positions a brand like N24 for the future. I do not believe that a new medium displaces an old one.”

Whatever the future for television news, the environment will hardly be calm, aquarium-like waters. Viewers are picking and choosing information they want, when they want it, more often in the echo chamber of their own points of view. Disgruntled World Cup fans have threatened to eat Paul the Octopus because they didn’t like the predictions. Some in the television news business feel the same way about their future.

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