The CEO of news agency Reuters, Andrew Rashbass, questioned the sustainability of broadcast news yesterday in a keynote at the Casbaa conference in Hong Kong, while outlining an alternative model that he is priming for launch next year.
“You have to fundamentally change the economics of TV news that are predicated on aggregating huge audiences for monolithic programming,” Rashbass contended.
“As that world has changed, we are now dealing with fragmented audiences, and each one wants something slightly different. The economics of creating that content, and the technology of creating that content, needs to change.”
Rashbass’s proposed solution, Reuters TV, will offer video bulletins that are automatically customized according to location and time of day, as well as live feeds and related Twitter conversations.
The upcoming service, crafted for professionals between 27 and 47 years old, marks a renewed attempt by Reuters to ramp up its consumer offering.
Rashbass axed Reuters Next, an earlier experiment, last year after joining Reuters from newsweekly The Economist, where he was chief executive.
A new approach to news
The appetite for news is stronger than ever, Rashbass argued, but the way it is packaged and delivered needs to change. It needs to combine the needs of connected consumers for curated story packages that work well on TV, as well as accessible and timely reporting that they are used to online.
“Because that generation are not reading newspapers and are not watching the nine o’clock news, I think there has been an assumption they are not interested in news,” Rashbass said.
“Actually I think the reverse is true, but they are interested in news on their own terms.”
Reuters’ existing business is in good shape, providing Rashbass with a financial cushion for Reuters TV, as well as hundreds of TV crews around the world that he can tap for content.
Success however also hinges on finding a lower cost base – production budgets 5% the size of traditional TV news, Rashbass suggested – while monetizing through both subscriptions and advertising. As a new paid-for proposition, marketing will be key.
It sounds like a tech-inspired model, where scale and some clever algorithms counterbalance a lower-cost, lower-margin approach to an existing business.
Reuters’ global news network, operating in 15 languages today, could help Reuters TV expand beyond English too. Before that happens however, the model needs to prove itself, Rashbass said. Three factors will determine its success.
“First of all, you have to have a clear view about the world,” he posited. “Secondly, you have to stick with it when the going gets tough; and third, you have to be right.
“We have a very strong view about what’s happening in the world,” he continued. “I think we have the confidence to stick with it. Now time will tell whether or not we are right.”