Eyes on government as media faces crunch year
One of the pressing issues for the Government this year is what to do about the media. The media industry is beset by problems that have devastated traditional media around the world and that have been well canvassed. Essentially they boil down to mainstream media not being able to attract enough advertising dollars to fund the comprehensive journalism they would like to provide.
Too many of those dollars are swallowed up by the likes of Facebook and Google, which feed off the expensive news services they do not provide.
Some will say ‘‘cry me a river’’, but any sensible person will see the need for a robust, independent media sector disseminating news, investigations, opinion and criticism. Any healthy state needs a watchdog, a Fourth Estate, to keep the system open and honest and people engaged.
While many industries have to cope with change and disruption due to new technology and new consumer habits, the pains of the traditional media have serious social ramifications that politicians have to grapple with.
The country’s top media woe is that its one independent commercial television news network, TV3, run by MediaWorks, is struggling to find a buyer and could be closed.
Then we have New Zealand Media and Entertainment (NZME), which publishes the and runs a stable of radio stations, and my employer, Stuff Ltd, which operates NZ’s most-visited news website and owns a slew of other organs. Both operations have had years of slowly shrinking revenues and dwindling profits. Stuff, owned by Channel Nine in Australia, is for sale.
Late last year NZME expressed an interest in buying Stuff. The two companies had previously wanted to merge but this was ruled out by the Commerce Commission, concerned the resulting entity would control too much of the print and website media.
The scenario emerging is not pretty. TV3 could die an inglorious death, leaving 550 people looking for jobs. Stuff and NZME, which still do the basic journalism of council and court reporting, could slowly cut staff numbers to remain viable and therefore have to reduce coverage and variety.
That would leave the Government with the state-funded RNZ and the state-owned TV1 as the only major broadcast news and current affairs providers. Stuff and NZME, which are also broadcasters of a sort, would be the main competition.
Assuming the Government wants to see real competition and plurality in the media industry, it will want to do something, even if the public is apathetic. And it won’t want to be seen to be bailing out an industry that many think is the author of much of its own misfortune.
I don’t pretend to understand television but it’s clearly unfair that TV3, funded mainly by advertising, must compete with state-owned TVNZ for the advertising dollar. If TV3 fails to turn a dollar, it dies. TVNZ’s failure, as in no government dividend last year, is greeted with a ‘‘never mind’’.
The first thing the Government could do is turn TV1 into a television version of RNZ. The entities could continue to exist as separate operations and still compete in some areas.
Easier said than done, of course. The Government would effectively be giving up the profit-making capability built up in TV1 so an overseas-owned private entity like MediaWorks can take advantage.
It would also be presented with a big bill for running TV1 as a public broadcaster whose audience would be cannibalised by TV3 and the other media wolves that would no doubt appear.
Even if other parts of TVNZ could be sold off to help pay the bill and to provide competition in the commercial sector, it would cost.
The issues faced by Stuff and NZME are just as complicated, especially since they operate in places where local media is vital but not financial. That raises the question that, if the Government funds radio and television, why shouldn’t it fund or subsidise news websites and newspapers?
To a certain extent it already does. NZ On Air ploughed about $90m into the media (news, drama, entertainment) industry in the 2018-19 year, 76 per cent of which went to TVNZ, MediaWorks, Prime and Ma¯ ori TV. As part of a joint initiative with RNZ it has also funded a $1m pilot scheme that employs eight journalists to cover civic news in different regions in an effort to support local democracy.
The scheme could end up as a sort of news bureau in its own right, supplying the main players with things like court news and coverage of breaking events.
State subsidies for the media create their own problems. To have much of the media industry dependent on the public purse could be dangerous. RNZ appears to have retained its independence but even if it hadn’t, plenty of other media would pick up the slack. What happens, however, if all the media are reliant on a government that they need to scrutinise?
One solution already suggested is for the Government to take a ‘‘Kiwishare’’ stake in NZME once it has acquired Stuff. The shareholding would have to come with various safeguards and is a long way down the track.
The media is in for an interesting year. It is going to find out how much independent journalism is valued.
The pains of the traditional media have serious social ramifications ...