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Minister of broadcasting, dommunications and digital media Kris Faafoi (Photo: Hagen Hopkins/Getty Images)
Minister of broadcasting, dommunications and digital media Kris Faafoi (Photo: Hagen Hopkins/Getty Images)

MediaApril 23, 2020

Faafoi unveils $50m rescue package for NZ media as Covid-19 crisis bites

Minister of broadcasting, dommunications and digital media Kris Faafoi (Photo: Hagen Hopkins/Getty Images)
Minister of broadcasting, dommunications and digital media Kris Faafoi (Photo: Hagen Hopkins/Getty Images)

With the lion’s share of the spend going to support broadcasters, newspaper operators are likely to be ‘aghast’, says media analyst Gavin Ellis.

The first round of a rescue package for New Zealand media has been announced, following government promises to “triage” its support measures for an industry in crisis.

The majority of the funding is targeted at broadcasters. Transmission fees paid to the state-owned enterprise Kordia will be waived for six months, at a cost of more than $20 million.

Platform contributions for screening New Zealand on Air-funded content will be cut by 80% through to next year, costing $16.5 million.

Government departments will also be instructed to purchase “organisation-wide news service subscriptions”, at an estimated cost of $1.3 million.

There is also an $11 million fund established for “specific targeted assistance to companies as and when needed”.

As outlined in a statement from the minister, the funds will be distributed as follows:

  • $20.5 million to cut 100% of Kordia TV/FM transmission fees for six months
  • $600,000 to cut 100% of RNZ AM transmission fees for six months
  • $16.5 million to reduce, by 80%, media organisations’ NZ On Air content contribution fees for the 2020/21 financial year.
  • $1.3 million to purchase central government news media subscriptions in advance for the 2020/21 financial year and encouraging Crown entities to increase their uptake of news media subscriptions.
  • $11.1 million for specific targeted assistance to companies as and when needed.
  • Commitment to build on the Local Democracy Reporting pilot as part of longer-term support

“This package is about freeing up cash in the short term to assist the industry get through the immediate crisis and dramatic drop in advertising revenue experienced since the start of Covid alert level four,” said the minister of broadcasting, communications and digital media, Kris Faafoi.

“The proposals in this package were generated by the industry themselves in a recent series of workshops to identify means of delivering immediate support to the sector. We have chosen the proposals that have a relatively quick impact to get support out the door as fast as possible.

The package follows alarms being sounded by commercial media across the sector, including at the parliamentary Epidemic Response Committee last week.

Three weeks ago, the German-owned Bauer Media Group pulled the plug on its operations in New Zealand, causing most of New Zealand’s magazines, including longstanding titles such as The Listener, the New Zealand Woman’s Weekly and North & South, to simultaneously fold. Bauer blamed the government decision to ban magazines under the alert level four lockdown. Faafoi strongly disputed that, saying the company had eschewed discussions about support.

Gavin Ellis, a media commentator and former editor of the New Zealand Herald who appeared as an independent witness at the selected committee last week, said newspaper operators were likely to be “aghast” at the plan. “They have privileged broadcasting above everybody else,” he said.

While NZME, which has a commercial radio arm alongside the Herald, and MediaWorks, which owns Three as well as radio stations, would receive “some benefit from the remission of transmission fees”, “apart from an unspecified $11.1 million for ‘targeted assistance’ nothing seems to help the newspapers at all,” said Ellis. “Stuff in particular is disadvantaged.”

While the commitment to support digital operators via subscription and membership programmes would be welcome, said Ellis, “I don’t see that compensating for the loss of corporate support that the likes of The Spinoff rely on.”

“Initiatives in this first stage aim to provide some immediate relief and allow time for work to be done on longer-term strategies to ensure future sustainability in New Zealand’s news media,” said Faafoi.

“The media sector is only the third sector, after primary health care and aviation, to receive a specific pool of funding over and above the wage subsidy to help it get through the Covid-19 crisis. This support reflects the essential role media play at this time in delivering access to reliable and up to date news coverage and keeping New Zealanders connected while in lockdown.”

He added: “I want to be very clear that this first phase of support alone will not be sufficient to see the sector through a prolonged period of restrictions and reduced advertising. A second package of support is being developed and will be submitted for the Covid-19 budget discussions in May.”

The RNZ transmission fees relate to its role in leasing parts of the AM band to other operators. A spokesperson said: “RNZ is not getting its transmission fees cut under the package announced today. Rather, the government is picking up the tab for the cost of transmission services provided by RNZ to other broadcasters …We will pay our own transmission costs (ie for our services) as usual.”

Challenged on the emphasis on broadcasters in an at times fiery press conference this afternoon, Faafoi said the transmission cost focus reflected “the nature of the cost and immediacy that we want … It is immediate relief that we’re trying to get through”. He added: “The nature of the funding envelope is weighted purely because of the nature of the cost of some of the media platforms.”

Faafoi added: “This isn’t about making sure we prop up failing businesses. It’s about making sure we support the important function of journalism in New Zealand.”

Asked why there was so little in the package for Stuff, which employs more New Zealand journalists than any other company, and is most widely spread across the country, Faafoi said the $11 million fund may have a role, but that wider conversations were ongoing.

There is no mention in the package of the impact of online giants such as Facebook and Google, one of the main concerns of local media operators. That would be “part of the second tranche of work that we are looking it,” Faafoi told media. “Certainly those conversations are being had.”

There is no mention in the package as revealed of any moves to enable an NZME acquisition of Stuff – a merger of New Zealand’s two largest print news operations was rejected by the Commerce Commission, but is still sought by executives, and there had been hints last year that the government might allow it to happen with provisos.

Nor is there any reference to the government’s enthusiasm for a merger of the two state-owned broadcasters, TVNZ and RNZ. That proposal, the upshot of several months’ consultation with media last year, is still being explored by PWC.

This story was updated to clarify the function of RNZ transmission fees.

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