One Question Quiz

BusinessApril 10, 2024

The makers of NZ’s most popular shows talk about what’s going wrong with TV


Above the Fold: As two of our biggest media organisations face radical downsizing, Duncan Greive asks our media leaders what’s going on, and what can be done about it. Up today: the people behind some of our most beloved TV shows and movies.

This is part three of Above the Fold: 20 Media CEOs, Two Big Questions, a five-part series running all this week and featuring a selection of responses to two heady questions confronting the New Zealand media sector. Read the series introduction here.

This week will rightly be dominated by news about the news, with close to 20% of the journalistic workforce at risk of losing their jobs. Given that the political response so far is barely a shrug, however, it makes sense to move on to the next sector set to be hit by some of the same issues that have impacted news.

Generally speaking, film and television content is made not by the platforms that screen it, but instead by a vast array of production companies. In New Zealand these consist of a few, relatively large organisations that are responsible for most of the shows that define our pop cultural identity. In a small country with a fragile and specific history, TV shows and movies have an outsize impact on our national conception of who we are as a people.

Yet New Zealand’s production sector is just as imperilled as its news media. TV is typically funded by the networks, by NZ on Air or by Te Māngai Pāho, in the case of reo Māori content, with some private off-shore finance, largely for crime drama. Films are funded through a combination of private finance, NZ Film Commission grants and rebates. The size of this funding is flat or going backwards in real terms, while some funding streams are completely evaporating, particularly network contributions. This means even shows which were once vastly profitable, like Shortland Street, are considered at risk of closure.

The scale of the problem, both in terms of the prominence of the shows and the economic impact, is vast. In a statement provided to The Spinoff, Irene Gardiner, the president of production sector representatives Spada put it in stark terms. “While TVNZ and Three aren’t giving definitive numbers at this time, Spada has calculated that we are looking at around $50 million coming out of our sector. Ironically it is our big popular shows that will be most vulnerable – as they are what has traditionally been fully funded by advertising revenue. This creates uncertainty around the future of favourite series like Shortland Street, Celebrity Treasure Island, Traitors, Married at First Sight NZ, food shows, home shows, and more.”

Today we run edited responses from the founders and leaders at a number of our biggest and most acclaimed production companies about the looming crisis in screen production.

Cate Calver

Cate Calver, CEO of Great Southern which makes The Casketeers, One Lane Bridge, The Hui and more

What’s the biggest issue in your corner of the media industry right now?

The nature of the media industry means that our commercial (advertising-funded) broadcasters are always at the forefront of any economic downturn. Marketing budgets tend to be the first budget lines businesses go to for immediate cost savings and TV ad spend is usually the first port of call due to the more expensive nature of creating TV ad campaigns.

The prolonged effect of the current market downturn (and ongoing reduction in ad spend) means that our broadcasters have had to respond by looking at reducing their costs across the board – including on content. And local content is by a huge factor more expensive than international, so is the obvious place to go for short-term savings. The challenge is that if a reduction in local content investment is substantial or sustained, we could lose the infrastructure and resources that create the content – meaning the tap cannot simply be turned back on when budgets return. So even short-term savings could have a longer-term impact.

In the production world we feel this impact with a lag effect, due to production lead times. So right now, we’re busy producing shows – but the concern is around how the reduced local content investment from our commercial broadcasters will impact our future slate and the industry as a whole. More and more we’re looking to foreign investment to help grow (or at least maintain) the pie, but this is also currently challenging, with international (ad-funded) platforms in a similar position to our local players.  

All that said, I’m optimistic the current issues will necessitate change for a more sustainable and resilient media eco-system long-term. 

What do you think is the best idea you’ve heard (or thought of) to provide a durable long-term fix?

The issues facing New Zealand media are not unique to New Zealand. Traditional broadcasters around the world are facing the same issues – both the current economic headwinds and the accelerating change in viewer behaviour.

However in New Zealand we are more exposed to these factors due to the sub-scale nature of our market and the high degree of fragmentation (across all parts of the eco-system). We also have a different public media funding model compared with most other comparable markets, with no publicly-funded mainstream broadcaster. Instead we put our public funding through NZ On Air on a contestable basis for all broadcasters – in effect subsidising the commercial market.

This is a relatively unique approach – and one I actually think works for a market our size. The issue has been the level of investment. NZ On Air has not received any substantive increase to its baseline funding for a decade or more to keep pace with inflation, and its funding has increasingly fragmented as more platforms and creators have emerged. This has meant a substantial reduction in the volume of traditional “TV” shows that can be funded (even if those shows are being consumed more and more via streaming services). A simple increase to NZ On Air’s general fund (ie for mainstream audiences) which recognises these factors would immediately increase the amount of local content our major platforms could support.

Thinking more holistically, our regulatory environment needs a major overhaul.  We have media regulation and responsibility spread over a number of different ministries – the Ministry for Culture and Heritage is responsible for media policy, the Ministry for Business, Innovation and Employment for communications policy, the Department of Internal Affairs for censorship, Te Puni Kōkiri for Māori media, Treasury monitors our state-owned broadcasters… and there is equivalent fragmentation across our regulatory regime.  There is an opportunity for a new single regulator to absorb all communications regulation (akin to Ofcom in the UK), with sub-committees to deal with specialised areas. This would allow a single strategic vision across the sector, and the ability to more easily modernise regulation, be more proactive, and deal quickly with the issues facing the sector.

In a market the size of New Zealand we need consolidation of our resources and entities, removing duplication and the inefficiencies that arise from multiple stakeholders each having part of the puzzle to solve. Consolidation and robust regulation would ensure that we’re spending less on the infrastructure required to support the ecosystem, and more on the actual public media content which allows us to see our stories on screen.

Bailey Mackey

Bailey Mackey, CEO of Pango Productions, which makes Match Fit, Marae, Sidewalk Karaoke and more

What’s the biggest issue in your corner of the media industry right now?

The biggest issue is probably mindset. There’s a lot of volatility. But on the flip side of that, there’s a lot of opportunity. And that’s not trying to pick over the carcass of the media sector, it’s more a view that actually, if you’ve got the right business model, and you’ve got the right attitude, there is a lot of opportunity out there, especially internationally.

I’d encourage anyone in the country to think a lot more globally. And really spend time in other markets. I’ve already been overseas this year, and I’m about to head back. Despite the fact that even those markets, there’s similar anxiety, my view is if you’ve got the kind of right mindset and the right model, there’s still growth opportunities.

One of the things that’s become really apparent to me is that no longer is content or distribution king and queen in this game. It’s actually the model. You’ve got to think about the model that you have. When you take an idea to a partner, have you thought through how it could be financed? We can’t just be banging down the doors – what are we all doing to help solve their problem?

What do you think is the best idea you’ve heard (or thought of) to provide a durable long-term fix?

Legislatively, we all want an even playing field against the streamers. Nobody denies it. But it’s incumbent on all of us to do some of the heavy lifting. It’s a marketplace of partnerships, it’s not a buyer-seller environment. We, alongside the platforms and alongside the funders, are all trying to do the same thing. The more solutions-focused we can be, the better. That’s not saying, ‘oh, we just need more money from the government’. Because if you took the most macro view of things, across the media sector, the government’s current investment must be close to half a billion dollars.

That’s a considerable investment when you think about that against the return from the sector, but also our total GDP. We are incredibly fortunate and grateful to have a considerable sort of state-subsidised business. But at times we just do not do enough in regards to bringing other capital into the equation, or just other ways of thinking into the equation.

Rachel Antony

Rachel Antony, CEO of Greenstone, makers of Motorway Patrol, Kid Sister and Dog Squad

What’s the biggest issue in your corner of the media industry right now?

I think most of us in Aotearoa’s media ecosystem are in the same corner – and it’s one we’ve been backed into by the multi-national tech-giants and the inaction of successive governments to address the massive market distortion occurring for our creative industries and our journalism, from the FAANGs’ [Facebook, Apple, Amazon, Netflix, Google] lack of contribution to our economy and society.

It’s not about whether you’re watching local journalism or entertainment on your phone on the bus, on a laptop in bed, or live at 6pm on a big screen – it’s still locally produced content. Without a plurality of thriving local media the biggest issue I think we face right now is a loss of our own voices and perspectives. I have a bigger aspiration for Aotearoa creativity than for us to become purely a servicing industry.

The international streamers should absolutely be able to compete for audiences with great content, but there’s a real risk of there being no local competition, and if we don’t tell our own stories, no-one else will. When I look at the richness, and importance, the humour and unique tone of our people and our stories, audiences will be so much poorer if all we can “afford” is a pipeline of acquired overseas shows and whatever the YouTube algorithm decides to feed us. I don’t think as a country we can afford to let that happen.

What do you think is the best idea you’ve heard (or thought of) to provide a durable long-term fix?

The screen sector is endlessly agile and innovative – but this is a global, systemic, market distortion that requires strong government policy response to address. To hear politicians talk of TVNZ suspending a dividend as creating an uneven playing field with WBD-Three, while ignoring the lack of contribution by the FAANGs, is baffling!

I don’t want to be discussing how our businesses and creators must “do more with less” when millions of dollars are haemorrhaging out of our economy with next-to-no-tax paid on them – millions that could be reinvested into an industry with enormous potential to be even more vibrant and valuable (and into homes and healthcare). I appreciate there are hurdles – trade agreements and tax treaties are complex. But Netflix ANZ has invested a billion dollars into Australian content over the past four years. A billion. And the “NZ” side of Netflix “ANZ” has received … zero. Those billion dollars haven’t been spent out of the goodness of Netflix’s heart – it’s because the Australian government has taken a much stronger stance on this than we have, to the benefit of both Australian audiences and the Australian economy.

Andrew Szusterman, GM of South Pacific Pictures, makers of Shortland St, Outrageous Fortune, Whale Rider and more

What’s the biggest issue in your corner of the media industry right now?

Getting people outside the industry to understand there is a massive threat to the economic viability of the New Zealand Production sector. We’re talking about thousands of New Zealanders in the entertainment production sector – in addition to the already under threat journalists – being out of work.

Big Tech has been allowed to enter the market with no braces. When the PM says “the industry needs to innovate” – it’s all we have done in the face of change. But when you’re competing against companies like Amazon, Google, Meta and Apple, whose combined profit last year isn’t that far off the total GDP of New Zealand, you kind of expect your government to do something for the local industry.

What do you think is the best idea you’ve heard (or thought of) to provide a durable long-term fix?

There are a slew of issues. Most relate to the infiltration of big tech into the news and entertainment and a Broadcasting Act that hasn’t really been changed since 1989 – the year TV3 started and a year prior to Sky TV starting. Let’s start there. Significantly there are no provisions for traditional broadcasters (TVNZ, Three etc) or the streamers (Netflix, Prime etc) to commission any local content. In 2021 I wrote an article about the streamers for The Spinoff – nothing has changed since then.

And importantly the Screen Production Rebate (SPR) could do with a tweak. Shows like Shortland Street, which has contributed over $227M in local economic output over the past 30 years, aren’t eligible. However if a similar series like Home and Away or Neighbours decided to shoot in New Zealand, they would be. How’s that for a fair suck of the sav?

John Barnett

John Barnett, head of Endeavour Ventures and founder of South Pacific Pictures

What’s the biggest issue in your corner of the media industry right now?

Where has the audience for NZ content gone? I grew up in an environment where we had vibrant and strong local media.

  • Newspapers, and magazines, which were the essence of communities, reporting on them, reflecting them, uniting them.
  • Radio stations which served our intellectual curiosity, explained the world to us, entertained us, informed us, played our music, portrayed our people, places and stories, celebrated our sports successes, and reflected our somewhat physically isolated island nature.
  • Television channels that championed the faces, stories, idiosyncrasies, the serious and the funny Aotearoa/NZ approach to life.
  • Cinema and home entertainment, mostly not from New Zealand – but from the mid ‘80s a steady stream of New Zealand movies which entertained us, which reflected us, which made us laugh and cry, and which were regularly among the most attended films in our cinemas in any year.

In each of those corners, access to any and all screen content has multiplied, but the portion that reflects New Zealand to the public at large, here and overseas, has diminished. The audiences – the readers, listeners and viewers of New Zealand content – have shrunk, and the revenue they generated in advertising, subscription and cinema box office has shrunk. That means a lot less income for all these corners, and the diminution of, and disappearance of, locally focused print, radio, TV and cinemas. Less TV and cinema revenue means more requests for ‘public’, ie government, funding to sustain a New Zealand screen industry.

What do you think is the best idea you’ve heard ( or thought of) to provide a durable long-term fix?

After 50 years in this business I’m reluctant to prescribe a “durable long-term” fix, because an inescapable reality is that change is constant. So, these are my thoughts for some solutions. Firstly, the audience is always right. Their tastes may change, their consumption patterns may reflect and absorb technology, fads and fashion, as well as intellectual curiosity – but that is who we are aiming to reach.

There is no future for any industry that attempts to produce content for an audience that no longer exists. And even less future if we make content that no one sees, hears, reads or even knows exists. Unlike artists and writers, making screen content is not solitary, it involves lots of people and lots of money. So the absolute first question any creator of screen content has to ask is “who is the audience?”

To tell big stories, and to tell them well and present them for public consumption, they have to be professional. And that requires money. And as the traditional distribution channels reduce, there is less money available. So we face this dilemma of becoming a ‘hand out’ business with obsessive focus on ‘inputs’, but an absolute absence of any requirement or measurement of ‘outputs’ such as, success, measured by connectivity with the audience.

John goes on to largely echo Calver’s argument above, suggesting reform, while adding a potential for merging our screen funding agencies with a specific requirement that productions nominate and prove audience reach to remain eligible for funding.

Keep going!