Angelos Frangopoulos, Sky News

Phil Dobbie: Hello, welcome to CXOs Unplugged, I'm Phil Dobbie. And with me today is the Chief Executive Officer of the Australian News Channel, Angelo Frangapoulos. Welcome.

Angelo Frangapoulos: Thank you.

Phil Dobbie: It's Australian News Channel, but there's actually a multitude of channels these days, aren't there?

Angelo Frangapoulos: Yes.

Phil Dobbie: It's part of the Sky News, but you're adding to the repertoire.

Angelo Frangapoulos: It is. Australian News Channel is in fact a joint venture with PBL Media, the Seven Media Group, and B-Sky-B. And it did start with one linear 24-hour news channel back in 1996. But in the 13 years since then, the business actually has evolved to be multiple channels across multiple platforms and really reflecting in many ways, the way that the media sector has evolved over time.

Phil Dobbie: It's getting complicated, isn't it?

Angelo Frangapoulos: It's getting complicated but basically, it's all about consumers and it's all about viewers and it's all about providing content. So although the delivery mechanisms are becoming more and more complicated and it's about diversifying the as much as possible, ultimately it is about quality content. And I think that that's one of the key messages that really is resonating around the media these days. That you can have multiple platforms but ultimately there's got to be something there to be consumed.

Phil Dobbie: Something behind it.

Angelo Frangapoulos: That's right.

Phil Dobbie: Yeah. The business model obviously is all about creating advertising revenue, ultimately.

Angelo Frangapoulos: We have two key drivers in terms of revenue, and it's no surprise that the key one is subscription through our relationship with Foxtel and Austar and Sky Television in New Zealand. And in addition to that, yes there is a significant advertising revenue base as well. But predominately our relationship, our key funding source is obviously the pay TV industry in both Australia and New Zealand.

Phil Dobbie: Right. Now you've got a few masters. I mean it's a joint venture between PBL, Seven Media Group and B-Sky-B out of the UK.That sounds like a political nightmare to me. Who do you answer to?

Angelo Frangapoulos: I answer to a fabulous board. And the three shareholders, I've really got to say, have always been focused on growth and the best interests of the joint venture. We operate very much on a United-Nations basis. And I think that part of the success and strength of Australian News Channel and Sky News is the fact that we do have these three fantastic shareholders who are all visionary in terms of growing the business. I think that if we only had one of three shareholders, we'd be a lot poorer for it. So I think it's been a great win-win, and the fact that we can call upon the assistance of the Seven network and the Nine network and obviously B-Sky-B and Sky News in the UK, certainly one of the world's greatest 24-hour news channels, to draw our content from, it's just fabulous.

Phil Dobbie: Yeah, absolutely.

Angelo Frangapoulos: It's a good resource to have behind you, isn't it.

Phil Dobbie: You're having to operate at a couple of different speeds aren't you? I mean, we've talked about new technology and the future. But at the same time, you're running a bunch of TV channels which are 24 hours. I mean, that's a relentless pursuit isn't it? So where does your mind sit day to day? How do you operate at at least two different speeds?

Angelo Frangapoulos: Well, it's actually one speed because ultimately our entire business is about an immediacy of information. So regardless of whether you're talking about a breaking news alert on a virus, or putting the latest tech story to air on a mobile phone or on Sky News Active or breaking the events on the linear 24-hour news channel, it's all about immediacy. So for us, our strength is breaking news, regardless of which platform we're on. And, and I've got to say that the key thing for us, the thing that really gels the whole piece together, is that we are really committed to journalism. This is not a technology business. Technology is part of our skill set to be able to really distribute that quality journalism across as many platforms as possible. Unashamedly, I'm a journalist. I'm not an engineer, I'm not an IT specialist, but I've tried to find out as much as I can over time about the digital opportunities that we have. But ultimately it's about a good story. It's about deciding for example as we are, you know as I speak right now, providing live coverage of the LP conference on the public affairs channel APAC, that is, exactly what that channel is there to do. It's all about news judgment at the end of the day.

Phil Dobbie: Not just in your business, but generally in business, is it important that the guy at the top has that experience in the industry that they're heading? A lot of businesses have you know hired CEOs, they're brought in because they're numbers guys. Is that a mistake?

Angelo Frangapoulos: Well, no, I think it just depends on the individual business and also where things are at. I think one of the great advantages of our operation is that around 70 percent of our staff are journalists. And that is that way a big event happens or when we need to make decisions about strategically where we go, there's a real richness of knowledge and understanding in terms of why we are doing things and everyone really sort of gets behind it. You know, certain businesses need people that are really solely focused on numbers to turn them around of develop them in new areas. But I think anyone regardless of whether you are making boxes or running an airline company or running a TV station, if you don't understand the product, then you shouldn't be in the game.

Phil Dobbie: Yeah, ok, fair enough. Now competition, I mean it's and some would say the broadcast industry is being relatively protected from competition, but that's obviously changing a great deal. In your case, for example, if the ABC got funding for an all-news channel, could that be a big problem for you?

Angelo Frangapoulos: Look, we welcome competition and we already compete with everybody. I mean you look at the media sector,there is just a multitude of choice. Not in just how you get your news, but also where you get your news from. So if you look at just the Sky News 24-hour news service, it is Australia's news channel. And yet we compete with online providers of news, providers of news on mobile phones, the free-to-air networks who still to this day dominate, from a ratings perspective, the consumption of daily news. So we think that there's a huge opportunity for even more competition. In terms of the ABC and a 24-hour news channel, it would seem to me that that would be more of a decision that ABC wants to make in terms of its own priorities rather than an actual need. But that's something for the ABC to decide.

Phil Dobbie: Right.

Angelo Frangapoulos: But quite frankly, we would welcome competition. I mean we are in the most competitive environment, particularly if you look at our placement in just the pay TV universe. Competing for eyeballs. We compete against ourselves as well. With the business channel and APAC, we've got CBC, Fox News, CNBC, we've got Bloomberg and other choices out there as well. That's just in pay TV.

Phil Dobbie: Yeah.

Angelo Frangapoulos: They really, you know, compete for eyeballs.

Phil Dobbie: So out of any of the decisions you've made over the last few years, and obviously there's been new channels launched and you mentioned the Business Channel, did you look at any of these and think, oh, this is a big risk? Or was it always a very calculated risk?

Angelo Frangapoulos: There's always a risk involved in everything. Business wouldn't be as much fun without the risk, I suppose.

Phil Dobbie: Well, it wouldn't go ahead would it?

Angelo Frangapoulos: No, look, it wouldn't. And with the Business Channel for example, we saw that there was a clear need for Australia, that we'd reached a real maturity in terms of our markets. Australia deserved to have its own Business Channel, a business channel where you can watch live data off the ASX, or you can watch Australian business leaders talking about Australian business rather than watching Australian business news on relay from Asia and other parts of the world that really doesn't focus on our market. And the other thing to for us is really about providing services that no one else provides. So, for example, our key programming in the evenings on the Business Channel is very much focused on consumer finance. So programs like Your Money, Your Call provide a really unique environment for Australians to engage with decisions regarding their own personal finance on a day-to-day basis on television.

Phil Dobbie: You couldn't have launched at a better time actually.

Angelo Frangapoulos: I'd like to claim that we knew it was going to happen, but it was just luck. But look, regardless of when it was launched, I do think that the market has reached a maturity where there is a real hunger for the business news. The average Australian's involvement in home ownership, investment in the superannuation sector and so on -- we are all investors in the markets, and we are all involved in the business environment. And yet it's something that never was really given much focus before. So hopefully what we've done is try to bring it into more of the mainstream.

Phil Dobbie: Yeah, so it wasn't a huge risk from that point of view really was it?

Angelo Frangapoulos: It was calculated, but there was a niche that was waiting. There's always risk but there's always a business plan that goes behind it. So if the business plan doesn't stack up, then there's less chance of the business going ahead.

Phil Dobbie: Certainly.