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MediaDecember 16, 2018

The media in 2018: Spark and the risks and rewards of entering the rights race


Duncan Greive concludes his survey of the state of New Zealand’s media in 2018 with a look at some of the smaller and emerging players – including Spark, Bauer Media and Māori Television.

Spark’s emergence as a genuine media contender is the highlight of a fascinating year amongst the mini majors – a loose group which has scale and potential but doesn’t quite crack the biggest leagues. Like their larger counterparts, some end the year on a high, others in long-running, existentially threatening turmoil. Cheery stuff huh? Look, it’s a great business, the media, we’re all making a lot of money and having a wonderful time, so it’s hardly surprising Spark wanted to get a piece of that lifestyle.

I’ll go through a few of the smaller players one by one below, arbitrarily cutting off with brief nods at the NBR and Allied Press, because this personal nightmare has to end somewhere.

Spark wants to know the rest and buys the rights

After years of dancing around the idea, 2018 was the year Spark finally laid its cards on the table and admitted that it was now in the media business. Within New Zealand there is no single sporting moment bigger than the Rugby World Cup final (when we make it), and thus no more audacious way to announce your entry into an arena than purchasing those rights.

As the year ends Spark owns the following: a large volume of licensed and original television it airs on Lightbox (including our own Get it to Te Papa) and the rights to a small but fast-growing selection of sports content, including F1, hockey as well as a number of other world rugby tournaments.

A deep selection of television and a sports portfolio being owned by a telco was something that so frightened the Commerce Commission that it declined to allow Vodafone and Sky to merge (Spark also opposed the merger), yet now our biggest telco is moving aggressively into content.

No one ever said there was any logic to the commerce commission’s decisions, or to this era for that matter.

The upside for Spark is obvious: it is a part of the strategy to transform the old Telecom from a ‘dumb pipe’ to a digital services provider which creates internet-enabled products. It already has a home security-as-a-service play in Morepork, big data analytics in Qrious and a Netflix competitor in Lightbox (disclosure: Lightbox presents our TV coverage and was The Spinoff’s founding client).

Nothing to this point is as bold or as public as the Rugby World Cup. It’s also the kind of bet which can make or break a legacy, as Simon Moutter effectively acknowledged at its corporate christmas drinks recently. He talked openly about ‘#Floptus’, the derisive name given to Optus’ disastrous attempt to sell the 2018 football world cup in Australia. Its infrastructure proved so hopelessly inadequate that it was ultimately forced to essentially gift the rights to SBS, an episode so embarrassing it echoes as a cautionary tale for would be digital sports players the world over.

This is why Spark has spent the months since it acquired the rights concentrating on two elements in particular: ensuring it has an extremely robust content distribution network, capable of handling the immense simultaneous data load of a live online All Blacks’ game; and purchasing a platform to handle the games. Former TVNZ director of content Jeff Latch is overseeing its sports offer, and has a huge body of work ahead.

One very good decision they have made is around talent: Scotty Stevenson (yet another disclosure: Stevenson is a contractor to and shareholder in The Spinoff) has been underutilised by Sky for years, and is an essentially uniquely gifted weapon. A knowledgable play-by-play commentator, garrulous host of wraparound content and the best rugby writer in the country, he will bring instant authority to their coverage. It also represents a generational shift – Grant Nisbett has called every All Blacks’ test since the early ’90s at least, and if his shows are anything to go by, Stevenson will likely bring a new and more diverse group with him to the package.

It remains a phenomenally difficult challenge that has been set. The platform, the infrastructure and the presentation all have to be perfect – and even then a single person with a dodgy connection in Masterton could be beaten up into a major news story. There are major challenges that bigger companies than Spark have tripped on, with comparatively less significant properties than the RWC.

For all that, there is little doubt that it is by far the most serious and well-financed local entrant to the content wars in years – perhaps ever. In the next couple of years we’ll find out whether Spark has both the creative temperament for media and the full-throated conviction to really attack Sky.

Bauer builds a future beyond magazines

2018 opened ignominiously for Bauer – it shut down Paperboy, the Auckland magazine which is both the biggest and most exciting new project it had launched in years. The local branch of the German family-run magazine giant appeared ideas-bereft and digitally impotent, like a business committed to little more than managed decline.

Yet by the year’s end it appears in unexpectedly good health. It has replaced the revenue (if not the cultural importance) of Paperboy with a contract to print and produce Our Auckland on behalf of the Council. It has recruited the brilliant Ben Fahy away from ICG to oversee that and the rest of its current affairs stable – it will be interesting to see what he does with the newly vacant Metro editor position, as it’s a magazine of huge history and potential which has drifted lately. Signing a deal with Stuff to distribute the excellent content which comes out of that division gives it a shot at the kind of online readership it deserves.

It has also handily diversified its income streams away from pure print advertising, with marketing services ranging from sponsored content to web development to Google AdWords help for businesses which are struggling to navigate an increasingly complex digital environment. A portfolio of sites have cumulatively amounted to 1.7m uniques per Google Analytics, and its digital team now makes up 50 of its 300 employees.

Newsstand sales are very soft, according to Bauer sources, yet it is maintaining subscriptions well, and while it has suffered as much as anyone at the hands of TradeMe with its Property Press and Autotrader brands, its rearguard response to this extremely challenging environment suggests it is starting to build a future in which magazines simply open the door, and the money is made around them.

Māori Television: once mighty, now humbled and in need of revival

“It’s super sad what’s happened there,” said one media executive of the channel which was once so vital, and whose mission is still amongst the most noble in all our media. In the years since Jim Mather resigned it has drifted further from the mainstream, both figuratively and literally, with its move from a prime central city Newmarket location to offices in distant Dannemora.

Those with knowledge of its recent history sheet much of the blame back to ex-CEO Paora Maxwell, who oversaw a gutting of the once powerhouse journalistic division and an increasing outsourcing of production. This led to it “becoming a fable for how poor governance and poor decision-making can destroy an organisation,” said someone familiar with the organisation’s recent history.

Its saving grace is its funding model, which has a comparatively low reliance on advertising, and a lack of scrutiny by other Māori or mainstream media, which allows it to persist without the scandalising that might happen were it to operate in another part of the industry.

Thanks to what it is tasked with doing – retaining and revitalising an entire language and culture – it will rightly be given the chance to rebuild itself. Those around the channel express hope and tentative confidence that Nanaia Mahuta’s review of the sector will ultimately shake out a worthwhile strategy, and that Te Anga Nathan’s head of content role at Te Māngai Pāho will help modernise its under-performing digital side. Then it might yet return to its exceptional form of seven or eight years ago.

“It’s at a crossroads,” said a source. “Every decision that gets mad henceforth is critical to the viability of the station. There have been so many appalling mistakes.” The government will want to see that slide arrested in 2019.

The NBR: a lion in winter

The strangest media saga of 2019 was the National Business Review’s publisher’s presence on Twitter. Media mogul Todd Scott fired columnists, hectored his newsroom over everything from editorial decision-making to kitchen cleanliness and castigated his web developers over a site-relaunch.

It was an extraordinary performance. Then the Herald, sensing weakness and opportunity, raided two of its best journalists in Chris Keall and editor Duncan Bridgeman to shore up an already abundant business team. The likes of Karyn Scherer, Jenny Ruth and Nick Grant have gone too. It left the original paywall innovators looking like they were in a shambolic state. And yet it retains a number of top drawer journalists, led by Tim Hunter, and a brand which has history like nothing else in business. The last few months have seemed calmer, so perhaps 2019 will see a renewed focus on what it does so very well: sharp, considered business reporting.

Allied Press

It remains a Southern powerhouse, though it has a whiff of competition in the form of impressive Queenstown startup Crux. The Otago Daily Times has a large and loyal readership – though it has yet to implement a paywall it announced in 2016 and its site doesn’t feel like it’s had major investment. Yet a wealthy local owner is a rare and precious thing in contemporary media, and it has longstanding interests in the South Island assets of Stuff, which are, all of a sudden, very available.

That’s all from me, I might follow with a kind of ‘what have we learned’ next week, or I might just have a lie down.

The Spinoff’s NZ media in 2018 series: the running order

Monday December 10: TVNZ

Tuesday December 11: Stuff

Wednesday December 12: Sky

Thursday December 13: MediaWorks

Friday December 14: NZME

Saturday December 15: RNZ

Sunday December 16: Spark, Bauer, Māori Television

Keep going!