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MediaApril 15, 2020

Journalism in crisis: NZ media bosses at the Covid-19 committee

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At today’s online meeting of the Epidemic Response Committee, media representatives have appeared in the unfamiliar seat of the interviewed rather than the interviewer. Here’s a highlights package.

Committee chair Simon Bridges opened by acknowledging the parlous situation the New Zealand media find themselves in. He also noted that representatives of NBR and Māori TV were unable to appear.

What follows are edited excerpts from the opening statements and answers to follow-up questions from those who appeared during today’s committee meeting.

Gavin Ellis, ‘independent witness’

“We come into this with the announcement yesterday of the loss of 200 jobs at NZME. It follows the loss of 300 jobs when Bauer magazines closed down. Two further magazines closed yesterday. I don’t think there’s any more graphic illustration of the dire situation in which the New Zealand media find themselves in, in this crisis. I fear those job losses are not going to be the last …

“We really are in an existential crisis here. Advertising revenues in New Zealand are absolutely in free-fall. I estimate the declines since the lockdown to be between 50% and 70% … All media are reporting dramatic loss of cashflow … The elephant in the room in all of this is the impact of the social media companies, Google and Facebook in particular, that are  siphoning off at least 70% of the $1.26 billion spent on digital advertising each year. It disturbs me that the government uses these digital platforms at an exponentially growing rate, and only a fraction of their digital spend is going to local media platforms …

“The bottom line is that all commercial media are in trouble. Their needs are immediate. Without some help there’s no guarantee that that overarching institution of the media will survive in the form that’s suitable for a free and democratic country like our own.”

Gavin Ellis is a former editor of the NZ Herald, an academic and commentator, and called as an “independent witness”

Kris Faafoi, minister responsible for media

“I’ve spoken with a large number of media bosses in the past week to get a gauge on where they’re at and what would help both in the short and long term … The government is developing a short and long term package of support for the media industry to deal with the challenges that they’ve identified, that will meet hopefully the immediate needs and also deal with the longer term challenges that face media, and, importantly, sustainable journalism in the future.

“I’ll be able to announce, hopefully, the outcome of that work within the week.

“There is a degree of pain across the sector – some more than others – and that’s why the short term package that we’re dealing with will hopefully give them both cashflow and certainty they need for six months in order for us to have some of these longer conversations

“Plurality is very important, as well as making sure that we have a strong public service media … As you will have seen from our announcements in January [around an RNZ-TVNZ merger], our main priority was to make sure that we shored up what the government owns, and a focus on strengthening public media. Obviously Covid has meant that the state of each media entity and the collective state of the media that focus has to change, which is why we’re looking at that short-term package, and the long term package which we need to make sure can sustain journalism.”

“On Bauer, they made it very clear when we engaged with them at the end of March that they in no way wanted any government intervention or wage subsidy help. When we first engaged with them they had made it clear they’d already made a decision to exit the New Zealand market … We obviously feel for the staff and the titles have cultural significance, but when your German owner doesn’t see any long term future in it, they’ve made up their mind.”

Kris Faafoi is broadcasting, communications and digital media minister

Sinead Boucher, Stuff

“Stuff is the largest domestic website of any kind in New Zealand, not just news, and we have 49 newspapers spanning the whole country. If the last few weeks have shown anything, it is that in times of crisis the need for journalism has never been greater. We’re seeing that reflected in the audiences coming to Stuff over this time.

“So it’s a bit of a cruel irony that when people need this journalism more than ever, the key mechanism for funding it has fallen off a cliff. That advertising has all but dried up since we entered level two. Stuff’s advertising revenue has more than halved in the week since March, and April is also looking particularly dire. That has been compounded by the cancellation of major events, and the inability to publish magazines.

“Represented today are a range of media businesses, and we do not all play the same role. For Stuff, our daily journalists are based all over the country – their work is not always the most glamorous, as they slog away on local stories and holding local institutions to account, but I would argue it’s almost the most important journalism because it’s the foundation for the wider ecosystem, and it affects the lives of all New Zealanders, whether they’re a reader of us or not, by ensuring there’s a spotlight on those in power.

“This crisis has also put a spotlight on the need for journalism versus social media, and the minister referred before to the myth doing the rounds that 5G is related to the spread of the Covid virus. There are several examples of social platforms spreading quite dangerous fake news. In many ways, these platforms are being rewarded through advertising spending for pretty bad behaviour.

“There is an immediate need to survive these next few months. There needs to be some kind of ongoing government support for a commercial media industry in New Zealand.”

Sinead Boucher is CEO, Stuff

Shayne Currie, NZME

“I’d like to pay tribute generally to not just the NZME journos, but to the media industry generally through this. I think the NZ media can stand proud with all of the challenges they’ve been confronted with – including around jobs – that they’ve been able to provide such strong content and analysis. We’ve seen this with specific stories around Covid-19, around challenging things like the number of Covid tests, border quarantine, the approach to the lockdown, these are vitally important questions that the media are there to ask of politicians and experts.

“Yesterday you will have no doubt seen our announcement to the NZX [about redundancies and cuts], and similar to Stuff we’ve seen a 50% drop in advertising revenue to April. We have made moves quickly to try and combat that, but the impacts have been significant and swift. All the leadership team have had to pull the company through some pretty quick manuouvres so we can get through this, and come out as strong as possible. You will have seen unfortunately our sport section is down to one page in the NZ Herald each day, our magazines are significantly reduced in size, and our community papers haven’t been able to publish – and again, we do rely on the advertising model, so once the restrictions are lifted, we’ll still have to review whether we can publish all of our community papers. 70% of our advertising tends to come from small to medium businesses, through what we call direct revenue. The other 30% is through agencies used by major brands. So we’re seeing impacts on both sides.

“We also had to take Radio Sport off air, but up until Covid we were very committed to it. Radio Sport had the commentary rights to the America’s Cup next year, and were in serious negotiations for the Olympics later this year, so I’d like to make it clear that it was Covid that pushed us into that position …

“I believe NZME would be the right owner of Stuff. We believe that would lead to a very sustainable, ongoing business that would continue to hire a good, strong percentage of journalists from throughout New Zealand.”

Shayne Currie is managing editor, NZME

Kevin Kenrick, TVNZ

“It’s true for all media in New Zealand, and also internationally, that everyone is seeing unprecedented audience scale, and at the same time they’re seeing massive reduction in advertising revenue. TVNZ is no different to anyone else in that respect …

“We need to understand that pre-Covid, the status quo was not sustainable for local media. Any responses to Covid-19 shouldn’t try and defy gravity, it should address what a forward looking view is. Covid has just accelerated and exposed some of the gaps and weaknesses in the sector.

“One of the fundamental things I think we need to challenge is the value we place on plurality versus the value we place on sustainability. Trying to maintain a group of sub-scale media businesses is only likely to hasten their demise in terms of sustainability. Some form of consolidation of the entities doesn’t mean to say that is the end of plurality. We need to focus on the plurality of voices rather than the plurality of entities.

“If Disney needs to merge with Fox to have enough scale, if Comcast buys Sky UK, if Nine is buying Fairfax in Australia, what makes us think a market the size of New Zealand, with less than five million people, can sustain all these separate media entities?

“One of the first things I think we could look at is having a quota for local content. Going beyond that, we need to look at the diversity of that local content so it’s not just one dimensional. If you look at NZ On Air and how it allocates its funding, that it can partition funding around certain areas that it wishes to see exhibited. So I think a good example would be a show like Casketeers, which I think has done a lot for te reo, and I think it’s also done a lot for entertainment.”

Kevin Kenrick is the CEO of TVNZ

Michael Anderson, MediaWorks

“When you look at our radio group, the majority of businesses we support are small to medium businesses around New Zealand. They not only need a vibrant media platform, but they need choice so they can grow their businesses.

“When they can start trading and need to start growing, they need those advertising vehicles to be able to reach their consumer. So we play a part not just in culture and not just in news, but also for those advertisers.

“We shouldn’t be looking to [consolidate] in the middle of a crisis, we should be buying ourselves time to work through it in an appropriate manner. The opportunity for all of the media to sit down and work with the government and all of the appropriate parties… is critical. It can’t come back looking like it is.

“We’ve got 1,200 staff that we deeply care about and deeply are trying to hang on to. There are thousands of businesses that are connected with us, that if we weren’t here would perhaps go under or struggle. We care deeply. This is a crisis… This is the trigger to make sure that what we achieve is long lasting.

“I’m very open to the fact that consolidation most likely is part of the solution.”

Michael Anderson is the CEO of MediaWorks

Paul Thompson, RNZ

“We know we’re fortunate, we know we’re privileged to be funded by the people of New Zealand and we certainly take seriously our responsibility to provide valued and trusted services to the public. And as always happens in a crisis, RNZ’s audiences are at record levels.

“The status quo is broken. The future is going to look different. We need to be open minded about that and innovate … Whatever happens we think that the content-sharing model is something RNZ can provide, which helps both New Zealanders and the wider sector. It’s not a total solution but it’s an important strand for the future …

“While 90% of our funding comes via the government, we do have some commercial revenue which is potentially impacted because our clients are commercial media companies and they purchase transmissions services from us, so there is a potential impact around transmission costs. But … we’re very fortunate that most of our funding is public funding. That’s why public broadcasting exists, because we’re meant to be able to operate without missing a beat when things get really tough …

“We did make a bid for the New Zealand on Air funding which was announced this week, but we weren’t successful. We were working with the private production sector to do that, but apart from that we haven’t put our hand up for that money. We think that at the moment our focus is on doing a good job and acknowledging that the private sector are probably going to be first in the queue there.”

Paul Thompson is CEO and editor in chief of RNZ

David Mackenzie, Community Newspapers Association

“Community newspapers are fully funded by print advertising, that is our business model. Many of our members do have websites but the commercial reality of a website model is not strong.

“Covid-19 has had a profound impact on the community newspaper industry. None of us know what our new business model is going to look like when we come out of it. This is in both the short term and the long term. Noen of our members are expecting to do better than break eve. Breaking even would be a great achievement in the next 18 months. We want the government to know that we want all the help possible to break even. SMEs do not have the capacity for debt, we simply cannot borrow funds to get through this.

“Any government financial assistance must apply to all New Zealand media, not just a few big corporates whose balance sheets are challenged, and were challenged before Covid-19. Support all New Zealand media and let’s see who survives after that.

“Two-thirds of members have not been able to publish. Every day that passes these business owners are questioning their existence.”

David Mackenzie is president of the NZ Community Newspapers Association, an organisation of 80 independently owned newspapers, and publisher of the Cambridge News

Mark Jennings, Newsroom

“We have two parts to the landscape: The pre-Covid part, as I call it, and the during-Covid part. One of the issues pre-Covid has been the failure of the advertising model that’s come about because of the emergence and dominance of social media platforms. Gavin Ellis put the revenue at about 70% that they were taking, the advertising people that I speak to put it at 80-90%. The problem is even higher than has been recognised.

“One of the things that happens with this model is that there’s been extreme competition for the small amount that’s left over and available and because advertisers buy on traffic numbers – that’s readers, viewers, listeners – it’s led to this phenomenon of what we call clickbait, which you’ll be aware of in your jobs. That’s led to some loss of reputation of some media organisations. So what we’ve been finding here is that when you add that problem to what I think is the other major problem and that’s ownership, you get a serious impact.

“One of the things that has happened during the crisis obviously is that the readership has, and ours was growing anyway, but it’s skyrocketed during the crisis. We are now seeing between four to five times our normal levels. Along with that, and this has been a positive development for us, is that people [have been] donating through PressPatron and we’ve seen that shoot up. It’s one of the things that we’d like to suggest the government looks at, matching those donations tax deductible or matching them on a one to one basis. If that was to happen, that would be transformational for a player like us in the current situation.

“Another thing that we would suggest is that NZ on Air get more funding and that they set up a special journalism fund that platforms like ours can access. This would be focused on good, solid, journalism outcomes. The other final thing I would say is that we obviously are going to have some structuring of this industry. It’s important that smaller players like us are not adversely impacted by this because we do think that we are one of the brighter lights in an overall gloomy picture.

“No disrespect to Stuff and the Herald but I don’t know if merging those two groups now is going to save them unless a lot of other things happen.”

Mark Jennings is the co-editor of Newsroom

Duncan Greive, The Spinoff

“We’re very fortunate in that we had a reader revenue programme through The Spinoff Members which was launched nine months ago, and I think it’s no exaggeration to say we’d be in a very similar position to NZME if we hadn’t had that lifeline. We’ve had stunning growth there and that’s given us the tools to survive the winter, survive the lockdown. I don’t think anyone’s capable of accurately predicting what comes beyond that, so we’re very grateful to our members and to our commercial partners that have stuck around …

“I couldn’t be prouder of how our organisation has responded, watching Toby Morris and Siouxsie Wiles’ work go around the world. It was released under Creative Commons and has been adapted by the governments of Germany, Argentina and Australia for their use. We derive no economic benefit nor do we seek one from that, but it’s transparently had a huge public good impact and I think that sort of shows the tragedy of the commons that’s been the degradation of the media. We all benefit from a solid media ecosystem and we all lose a bit when it sort of falls away.

“It’s the least bad option we’re shooting for at the moment because they all have issues.

“I think what needs to be in mind is that whatever help is given to the sector should be to the sector as a whole. From magazines who, to my mind, were absolutely wrongly excluded from the essential services designation, to iwi radio, ethnic radio, and community/small-town papers. We all do a different job for a different audience and I think it would be a danger to single out particular players because of their scale or prominence … it just needs to be carefully weighed to make sure it takes care of everyone.

“It’s the least bad option we’re looking for but this is an issue that requires immediate action. I think NZ On Air as it exists… is a great vehicle for it. It’s widely respected, it’s considered an honest broker and it can – if it were to just target journalism or public good media – do a lot more very quickly and do it in a way that doesn’t impact everyone else.

“I think further down the line, if you want to fund that, we’d need a digital services tax. I think it’s really really mad that as a nation we still allow the Facebook group of social media providers to come in and spread misinformation, and then the government will do a campaign to solve that misinformation so they’re effectively paid to fix a problem they created. At the very least, you need to solve that contradiction and you could carve off some of that to help fund an expanded NZ On Air.”

Duncan Greive is managing editor and publisher of The Spinoff

Pattrick Smellie, Business Desk

“In a post-Covid world, it’s fair to say corporate subscription has gone very very quiet, but we expect it to come back. We’ve been gratified and slightly amazed by the growth we’ve seen in individual subscriptions, there is clearly appetite for what we’re doing from individual subscribers for people looking for serious thoughtful coverage of what’s happening to the economy in this very unusual situation we’re in right now. We’ve more recently been advocating more directly to government ministers and government agencies to say it’s a source of constant frustration that as a longstanding part of the New Zealand media ecosystem that, for example no MP can access our material through the parliamentary library and that most government agencies might have one or two subscriptions even though we may be creating coverage that focuses enormously on their areas of interest. … It would help if government agencies were to invest in the news that is available. I think there’s a bit of subscription fatigue perhaps as more and more news organisations want to be paid. We’ve always worked on that basis, don’t work for free, that’s a historic mistake that a lot of news organisations made in the first place when the internet came along. We haven’t made that mistake and we’re determined to succeed on that basis.

“Covid is effectively accelerating trends that were already in place for traditional media and new media. I’m very skeptical about the view that the answer is the government to save legacy media. it needs to be given opportunity and responsibility to save itself, in my view. I also don’t believe that any level of government funding which is realistically or politically possible is able to save the large legacy players.”

Pattrick Smellie is the editor of Business Desk

Peter Lucas-Jones, iwi radio

“It’s important that iwi radio and Māori media are given consideration if there is going to be any media recovery package or media recovery support particularly support redirecting funds, which is wonderful, it does keep us behind in the innovation space as we move forward.

“Iwi radio provides information to areas that have little or not connectivity. For city folk this isn’t such a major issue but for people that live in regional communities, māori language speaking communities that have little or no connectivity, their iwi radio provides them the news, radio shows and the information that they need to be up to date with what’s going on. Lately we’ve been working really closely with Māori Television and this provides for the broadcast of the daily updates and that is a multi-platform approach to keeping people up to date with information.

“If we had more resource to create content that was tailored to these specific times, it would certainly help get information out and improve behaviours and also increase the nga putahimahi, improve the outputs that we’re looking for across our communities. We’re kind of like the last bastion of regional media, iwi radio. And whilst we promote te reo māori and tikanga māori, we like to ensure that those messages that are getting put out through our platforms do have that Maori perspective – that they are repurposed and repackaged to fit our audience which is not something that we are not currently funded really to do but our communities are going over and above, volunteering day and night, to do the best that we can.”

Peter Lucas-Jones is the CEO of Te Hiku Media

Gavin Ellis, independent witness, concluding the day’s submissions

“There seems to be a genuine desire to reexamine the entire ecosystem once we get over the immediate and short term problems. Those immediate steps that we’ve talked about are really buying time, but we need to buy time. We can’t reexamine and recraft the ecosystem if there’s nothing left to recraft …

“What other industry is allowed to steal the product of another industry’s endeavour and pay nothing for it, while at the same time steal their livelihood through advertising? Because that’s what social media does. They pay absolutely nothing for the product that is the lifeblood of their operation and that is the news content made and paid for by news media organisations.

“I know of no other industry where you can steal something and not only get paid for it through advertising but get the government’s backing for it as well.”

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