Mutual destruction and the media
There’s no doubt it’s a difficult moment for commercial media in New Zealand. Profit and revenue are falling at both Stuff and NZME, the country’s two largest media organisations. They would like to merge if the Government would let them. They’re back with a new plan and the hope appears to be that by agreeing to ringfence their respective newsrooms, they will persuade the Government to finally give them the nod.
Money-losing channel Three is another headache. Owner MediaWorks has the channel on the block, but if a buyer can’t be found the likely outcome is to turn out the lights. And by the way, it would really help if Three didn’t have to compete with state-owned but commercially run TVNZ for both eyeballs and advertising dollars.
In some ways it would be easy for the Labour-led Government to resolve that now is the time to go all-in on an integrated public broadcaster.
New Zealand is conspicuous among its advanced industrial, democratic peers in being without a unified public media champion that takes in television, radio and online news and entertainment. Public spending on media here is fragmented across organisations and more like America in its level of support than the Western European countries, Australia and others in the Commonwealth.
Last week, RNZ reported that an advisory group has recommended the Government disestablish both TVNZ and RNZ, whose radio and online platforms are entirely Governmentsupported, and in their stead found a new public media entity.
It’s an intoxicating idea, particularly because commercial media plurality is under threat. Between them, Stuff and NZME have closed close to two dozen rural and community papers since the first half of last year. Stuff’s main holdings remain Stuff, The Dominion Post, The Press and The Sunday Star-Times; NZME owns The New Zealand Herald and NewsTalk ZB. If the companies are prevented from merging again (Stuff is owned by Australian media firm Nine) there’s a distinct possibility the withering will continue.
On the other hand, if the Government relented, a unified state media corporation along the lines of the BBC or ABC could counterbalance the loss of wider private sector ownership. Ownership concentration was the reason the Commerce Commission first nixed a deal between Stuff and NZME in 2017.
However, a consolidated state media champion would always contain its own internal contradiction. Even as it aimed to replace a lost plurality, it would make life all the more nettlesome for its remaining private-sector competitors. The better it was at giving away a product they were trying to sell, the more they would struggle.
After all, ‘‘New Zealand Broadcasting Corp.’’, would need to be given the tools to thrive. Any ‘‘fit for purpose’’ mandate would allow it a digital-first strategy, to deliver news and entertainment through the platforms that New Zealanders, especially young ones, expect to use.
If, as RNZ suggests is recommended, a mixed-funding model was used, including advertising and other commercial revenue as well as government money, the problem would be compounded. Just as advertising revenue is migrating online and especially to new and global competitors in the form of social media platforms, a new player would take yet another slice of the fragmenting pie.
At the same time, the public would need to stump up the funds where other revenue fell short. Last year the Culture and Heritage Ministry commissioned PwC to research approaches to financing and regulating public media in six other countries: Denmark, Norway, Finland, Ireland, Canada and Australia (the first four were selected because they have similar-sized populations to New Zealand, the latter because they also have a lot of English-language content coming from overseas).
All have consolidated broadcasters and none raise more than a small proportion of funds commercially.
In Australia and Canada the public broadcasters, while well-respected, are no more popular as news sources than their best private-sector counterparts.
The 2019 Digital News Report by the Reuters Institute shows ABC News is only a hair ahead of Channel 7 News as Australia’s top source of information through old media: print, TV and radio. Online, ABC is pipped by News. com.au. In Canada, CBC News ranks third behind CTV News and Global News in print, TV and radio, while it leads the pack online.
That ought to be a spot of hope to the Government. There is nothing intrinsic to a state entity that makes it more capable or more trusted than private-sector players in a healthy democracy. There’s clearly a role for the Government in the current media crisis, but it needn’t mean birthing a sleek new state competitor.