One Question Quiz
Image: Tina Tiller
Image: Tina Tiller

BusinessApril 11, 2024

The CEOs of TVNZ, Sky, NZME and MediaWorks on the media crisis

Image: Tina Tiller
Image: Tina Tiller

Above the Fold: as two of our biggest media organisations face radical downsizing, Duncan Greive asks media leaders what’s going on, and what can be done about it. Today: the leaders of our broadcasters and streamers – those most impacted by the current crisis.

This is part four 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 and the full series here.

Tuesday and Wednesday saw confirmation of what was proposed some weeks back – the loss of more than 350 jobs combined across TVNZ and Warner Bros Discovery (WBD), owners of Three. That represents more than a quarter of their combined staff, and likely the single worst week for job losses in local media history. By any standards, this is a catastrophic moment for journalism and TV in New Zealand, and the jobs lost are incredibly unlikely to return.

Contra the critique of some in political and tech circles, both TVNZ and WBD have developed impressive digital audiences on streaming platforms TVNZ+ and ThreeNow. But they are competing against other platforms that have zero content costs (in the case of YouTube) or can spread their content costs over hundreds of markets (in the case of Netflix, Disney or Amazon). Unlike TVNZ and WBD, the big tech companies pay almost no tax locally.

TVNZ and WBD are part of a group I’ve put together which consists of companies that make a large part of their revenues selling ads around audio or video (this is why I’ve grouped Stuff with publishers, coming tomorrow). While the two big TV networks are clearly very challenged – losing a bunch of money, laying off a bunch of staff – that’s not the whole of the story of this group. 

Sky has executed an impressive turnaround story under CEO Sophie Moloney, with a strong streaming business augmenting its still-huge satellite subscriptions, and long-neglected advertising revenues starting to ramp up. NZME has easily the most diversified business in New Zealand media, and while its profits are crimped, it remains robustly in the black. MediaWorks has reported years of big losses, but those in advertising praise the events and activations work of its brands, and out-of-home advertising, which it has a big operation in, is a rare media bright spot.

Still, it’s undeniable that the big audience players are operating in a chastened environment, and telling that they represent the most urgent (and logical) calls for reform. The following is a condensed and edited version of responses filed by these CEOs.

Sophie Moloney, CEO Sky, which operates a satellite pay TV service, a free-to-air channel along with multiple subscription streaming services.

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

Making considered decisions now that contribute to the long-term health and sustainability of our industry, and doing it in a collaborative way that acknowledges the value of local providers, local storytellers, local employers and local crew.

There are number of issues that need resolving, including the future of transmission across Aotearoa (ensuring all New Zealanders have access to content), the health of the local production sector, the need for a level playing field for local players competing with global tech platforms and streamers, the plurality of trusted news voices, and the career pathways to keep and attract talent in our industry – to name a few. Some of those issues need government involvement, but we all have a role to play.

Our ‘enduring commitment’ at Sky is to be “a responsible, sustainably profitable, Aotearoa-focused media business”. We use those words with care – yes, we are focused on continuing to grow revenue and to manage our cost-base to be sustainably profitable, but we also play a key role as a responsible NZ Inc business, and we want to be part of the solution for the issues facing the sector, including by leaning into any cost efficiencies in the way content is transmitted to all of the country.

Sky CEO Sophie Moloney (Image: Supplied)

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

As my answer above suggests, I think proper collaboration across the local sector is key; not merely lip-service. We won’t all agree on everything, and of course we will continue to compete for advertisers, customer attention and funding, but we must have a common goal to ensure the long-term health and sustainability of our home-grown, wholly Aotearoa-focused industry. 

In addition, while legislation is not a perfect fix, there are some regulatory settings that the Government can amend that can make a real difference to the way the industry operates. They are well known by now – like removing the daft rule that prohibits advertising on TV on Sunday mornings (with no such restrictions online) and fixing the messy and unnecessarily costly regulatory environment that means the same piece of content is regulated by different bodies depending on how a viewer chooses to watch it!

That viewer choice is a key point. As an industry, we need to focus on where we can collaborate, for instance in managing any shared infrastructure costs, to ensure delivery of key local content to all New Zealanders – no matter their home location, life stage or financial circumstance.

Jodi O’Donnell, CEO, TVNZ, which operates TVNZ1, TVNZ2 and Duke as well as digital brands TVNZ+, and Re: News

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

The media industry is under immense cost pressure. Like many businesses across Aotearoa, the current recessionary environment is having a big impact on TVNZ. There’s less advertising revenue going around as businesses tighten their belts, and that makes it increasingly difficult to fund our programming slate and provide our services to viewers.

While no one is immune to the economic conditions, media are facing an additional challenge with global social media platforms also taking the bulk of the advertising revenue in our market without contributing to the local sector. These online giants are swallowing 90 cents out of every digital news advertising dollar, not paying tax on the vast majority of it, and not following the same regulations local media are subject to. Competition breeds good outcomes for audiences, but there needs to be an even playing field for this to be true.

TVNZ CEO Jodie O’Donnell (image: Supplied)

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

There’s no one silver bullet, but a combination of legislative changes focused on creating a more even playing field for local media would ensure a fair fight. We would like to see the Broadcasting Act updated to reflect how audiences watch content today – for example, we’re still prohibited from carrying advertising on a Sunday morning on our broadcast channels. This may sound minor, but it impacts our ability to successfully bid for major sporting events when we can’t commercialise them – such as the most recent RWC where games fell on a Sunday morning in New Zealand. 

We’re supportive of the Fair Digital News Bargaining Bill – where global tech companies are taking our news content to keep consumers engaged on their platforms and to train their AI tools, they should be compensating the content platforms they are scraping this content from, for that benefit. Global streamers have the ability to negotiate their own buttons on TV remotes worldwide, so we’d like to see the government support app prominence legislation for local media who are supporting and sustaining a creative industry here.

And finally, while there are strong free-to-view options for sport at the moment, with the rise of global streaming platforms, there is always the potential that services will seek out rights and keep sporting codes of national importance behind a paywall exclusively. We think anti-syphoning regulation is an important conversation to be having preemptively.

Wendy Palmer, CEO, Mediaworks, which operates radio brands including The Edge, More FM and Mai FM, along with an out-of-home advertising network and the Rova app

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

I think all corners of the industry are feeling the impact of the faltering economy, with New Zealand entering recession for the second time in 18 months. We’re fortunate with our product mix – outdoor, audio and digital – proving more resilient than some other parts of media. But it’s a long time to be in a flat or recessionary environment and it takes a toll on the teams working hard every day. With a constant stream of bad news, I’m conscious that we don’t talk ourselves further down, becoming a self-fulfilling prophecy.

MediaWorks CEO Wendy Palmer (image: supplied)

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

I wish I could see a silver bullet that would turn things around for our industry. It’s not a situation unique to New Zealand – countries around the world are struggling with the same dilemma. With advertising dollars moving to the big global tech companies, how do you sustain and grow local content and voices? 

At MediaWorks we’re working at pace to develop new creative ways to engage audiences, digitise our business and measure effectiveness. With initiatives like Ad Net Zero and others, many advertisers are starting to include considerations around climate impact in their media buying decisions. I’d love to see that expanded to include the positive social impacts of locally produced content and platforms that serve local communities. 

One of the answers must also lie in a policy framework that levels the playing field – both between local media and the global titans and between commercial media and state-funded entities. No silver bullet, but a concerted and urgent effort needed from everyone who cares about preserving a thriving media sector in Aotearoa.

Michael Boggs, CEO of NZME, which operates radio brands including Newstalk ZB and ZM, digital brands like BusinessDesk and OneRoof, along with NZ Herald and other digital and print publishers.

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

That New Zealand businesses and consumers are hurting. We see this in the news we produce, but also in the investment that advertisers and audiences are willing to make in media – whether that’s buying ads or subscribing to one of our platforms. While NZME’s revenues are growing because of the innovation we’ve invested in in recent years, the total advertising and subscription market is decreasing as New Zealanders grapple with the cost of living.

Michael Boggs

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

Building a robust economy is obviously the focus over everyone right now. For media, one of the things that would help us would be ensuring global giants are paying a fair price to use our content. These tech companies including Google, Facebook and AI platforms are using our content and monetising it without paying a fair price, which is a real problem for us and for other media companies. The Fair Digital News Bargaining Bill will go some way to ensuring these global giants pay New Zealand media a fair price to use our content.

Warner Bros. Discovery CEO Glen Kyne did not file a response by time of publication

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