Fol­low the Money

New Zealand Marketing - - Contents -

With news­pa­per ad spend on the way down, Erin Mcken­zie ex­plores the dif­fer­ent mod­els lo­cal news me­dia com­pa­nies are us­ing to fund jour­nal­ism.

P17. Bad news P18. Build a wall and make them pay for it P18. Sell­ing the sausage, not the siz­zle P19. Dom­i­na­tion sta­tions P20. Spon­sors - a moral dilemma P21. Get up, stand up P22. Merger she wrote P23. Fill­ing the gap P24. New rev­enue P24. Com­bine and con­quer P24. The new news­rooms P18. Pulling down the wall P20. Jour­nal­ism has a PR prob­lem P23. The $15 mil­lion ques­tion

Fol­low the money. It’s an ax­iom that jour­nal­ists have be­lieved in for years and a guid­ing light when it comes to hold­ing the pow­er­ful to ac­count. But that phrase is in­creas­ingly per­ti­nent to those who run me­dia busi­nesses. As ad­ver­tis­ing money flows away from tra­di­tional chan­nels to­wards large tech firms, the old busi­ness model of sell­ing space around the news is creak­ing. And that has led to a range of ex­per­i­ments from pub­lish­ers and broad­cast­ers hop­ing to keep the lights on – and to keep shin­ing those lights into dark places. Erin Mcken­zie dives into the lo­cal news me­dia feed and finds plenty of ex­per­i­ments, but no sim­ple an­swer to the fund­ing co­nun­drum. We live in an in­for­ma­tion-rich so­ci­ety. At the press of a but­ton, a click of the mouse or the flick of a page comes a wealth of lo­cal and in­ter­na­tional news and cur­rent af­fairs. On the flip side, as we’ve seen with re­cent po­lit­i­cal events, we also live in a mis­in­for­ma­tion-rich so­ci­ety. Who is reg­u­lat­ing the con­tent? Who is telling the truth? And what are the agen­das be­hind the in­for­ma­tion? This ten­sion means the ac­cu­racy, fair­ness and truth of jour­nal­ism is in even higher de­mand at the mo­ment as some of those in power pull at the strings of what seems to be an in­creas­ingly frag­ile democ­racy. TVNZ head of news and cur­rent af­fairs John Gille­spie says more so than ever, any­one can as­sume the man­tle of a jour­nal­ist, but mak­ing sure the writ­ing is truth­ful, cor­rect and fair is a skill that tends to go by the way­side from in­di­vid­u­als who are not pro­fes­sion­als. Some com­fort, how­ever, can be found in News Works’ Trust in Me­dia re­search with Col­mar Brun­ton. The 2017 study ex­am­ined how con­sumer trust in me­dia has evolved with the dig­i­tal me­dia land­scape and news me­dia came out on top. When 600 re­spon­dents were asked to in­di­cate how much they trust the news and in­for­ma­tion from dig­i­tal me­dia chan­nels, news me­dia web­sites/apps got 84 per­cent fol­lowed by Google’s 81 per­cent. TV web­site/tv apps got 77 per­cent while Face­book was just 38 per­cent. Look­ing at tra­di­tional me­dia, news­pa­per and ra­dio both re­ceived 87 per­cent and TV 86 per­cent. So why is it that Gille­spie says jour­nal­ism is un­der more stress than ever? Look­ing at some of the em­ploy­ment num­bers, it’s clear: ac­cord­ing to cen­sus data, 1,170 New Zealan­ders worked in print, ra­dio and tele­vi­sion jour­nal­ism in 2013, down from 2,214 in 2006. And while most un­der­stand the need for jour­nal­ism, the prob­lem is that no-one’s en­tirely sure where the money is com­ing from to fund it.

BAD NEWS

Ear­lier this year, Stan­dard Me­dia In­dex (SMI) re­leased the 2017 agency ad spend in New Zealand show­ing pos­i­tive growth to­tal­ing a record $1.04 bil­lion was spent on ma­jor me­dia across the coun­try. Un­for­tu­nately for news­pa­pers, they did not see that growth as agency ad­ver­tis­ing spend on the chan­nel was down 6.9 per­cent to $56.7 mil­lion. News­pa­pers and mag­a­zines (down 14.3 per­cent) were the only two me­dia

I THINK IN THE CASE OF OUR NEWSPAPE RS WE HAVE SEEN PEO­PLE ARE PRE­PARED TO PAY FOR JOUR­NAL­ISM AND WE BE­LIEVE IT’S HIGH TIME THAT WITH THE RIG HT JOUR­NAL­ISM AND PRE­MIUM CON­TENT PEO­PLE WILL BE PRE­PARED TO PAY FOR THAT IN A DIG­I­TAL SENSE. – SH A YNE CURRIE

chan­nels to fall. Shortly af­ter, the Ad­ver­tis­ing Stan­dards Au­thor­ity (ASA) re­leased its 2017 re­port on New Zealand’s ad­ver­tis­ing rev­enue and, again, news­pa­pers were on a down­ward tra­jec­tory. Rev­enue in 2015 was $474 mil­lion, in 2016 $417 mil­lion and in 2017 $353 mil­lion. Where there was pos­i­tive growth for news­pa­pers was the “news­pa­per dig­i­tal” cat­e­gory, which has been on the up since 2015 when it sat at $41 mil­lion, to sit at $82 mil­lion in 2017. In both the SMI and ASA re­ports, dig­i­tal was on the rise. And TV was hold­ing firm, with the 6pm news still bring­ing in some of the big­gest au­di­ences. How­ever, signs are emerg­ing that dig­i­tal’s shiny-new ap­peal could be wear­ing off. In 2017, P&G cut $200 mil­lion from its dig­i­tal spend due to bot and brand safety con­cerns and rein­vested in chan­nels with big­ger reach in­clud­ing tele­vi­sion, au­dio and ecom­merce. And ear­lier this year, Unilever threat­ened to pull ad­ver­tis­ing from on­line plat­forms that al­lowed "toxic con­tent". So could the con­cerns over tech see lo­cal ad­ver­tis­ers move their spend in a sim­i­lar di­rec­tion? When Stuart Rutherford, man­ag­ing di­rec­tor of Zenith New Zealand was asked the ques­tion by NZ Mar­ket­ing, he said he sees no ev­i­dence that ad­ver­tis­ers are shift­ing bud­gets away from on­line. By con­trast, he said, its share of global ad­ver­tis­ing ex­pen­di­ture con­tin­ues to rise rapidly and is fore­casted to hit 44.6 per­cent of global ad spend by 2020. “The con­cerns we have seen from large FMCG multi-na­tion­als and oth­ers re­lat­ing to brand safety and corporate re­spon­si­bil­ity are valid and yet they sim­ply will not stop the tech and dig­i­tal jug­ger­naut, and we cer­tainly will not see them shift­ing large spend back into tra­di­tional print chan­nels.” Most agree that ad­ver­tis­ing is not the an­swer if me­dia com­pa­nies hope to fund news and cur­rent af­fairs con­tent. So what is it?

BUILD A WALL AND MAKE THEM PAY FOR IT

Look around the news me­dia in­dus­try and you’ll see walls are go­ing up. News­pa­per brands like The Wash­ing­ton Post, Fi­nan­cial Times, Wall Street Jour­nal, and The New York Times all have one. Conde Nast brands The New Yorker, Van­ity Fair and Wired have launched ‘soft’ pay­walls, in the be­lief that hav­ing pay­ing read­ers rather than re­ly­ing on ad­ver­tis­ing just makes them bet­ter. Ad­week has also re­cently launched a pay­wall. And, in many cases, they’re prov­ing to be worth­while. The New York Times now has over 2.2 mil­lion pay­ing read­ers ac­cord­ing to Re­code and the busi­ness has grown 30 per­cent each year since it started in 2011. Fi­nally, con­sumers seem happy to pay for ac­cess to good con­tent and, at a time when Don­ald Trump has at­tempted to desta­bilise democ­racy through con­stant at­tacks on the me­dia, many have seen the need to sup­port the jour­nal­is­tic in­sti­tu­tions that hold power to ac­count. Closer to home, NZME an­nounced plans to have dig­i­tal sub­scrip­tions in place by the end of the year. The an­nounce­ment came at a sim­i­lar time as the re­lease of its 2017 fi­nan­cial results, which ba­si­cally showed what they’ve been show­ing for years: in 2017, its print ad­ver­tis­ing rev­enue was down nine per­cent, reach­ing $121 mil­lion, down from $132.7 mil­lion in 2016. Its cir­cu­la­tion rev­enue was also down three per­cent, reach­ing $83.3 mil­lion from 2016’s $86.1 mil­lion. Mean­while, its dig­i­tal per­for­mance showed healthy growth, out­per­form­ing the mar­ket with dig­i­tal rev­enue growth of 18 per­cent. But it’s still rel­a­tively small. And, given it, and all other me­dia com­pa­nies mak­ing ex­pen­sive-to-pro­duce news con­tent, is com­pet­ing for eye­balls with other dig­i­tal be­he­moths (as well as smaller, very pop­u­lar and non-jour­nal­is­tic do­mes­tic sites like Met­ser­vice and Trade Me) it’s get­ting harder to sus­tain this still largely ad-funded busi­ness model. That reader rev­enue is sure to rise with dig­i­tal sub­scrip­tions. And, to get there, NZME man­ag­ing ed­i­tor Shayne Currie says it will fo­cus on im­prov­ing pre­mium jour­nal­ism and nur­tur­ing au­di­ences on­line. “We have a project team look­ing re­ally closely at what we can of­fer in terms of pre­mium jour­nal­ism, what peo­ple are pre­pared to pay for, and how we present that gen­er­ally.” He adds, NZME doesn’t refer to it as a “pay­wall” any­more be­cause it sees it as hav­ing neg­a­tive con­no­ta­tions. In­stead, it’s called a “dig­i­tal sub­scrip­tion tool” or a “pay gate”. Many other pub­li­ca­tions call it a mem­ber­ship, often of­fer­ing tiered op­tions and var­i­ous ben­e­fits. “I think in the case of our news­pa­pers we have seen peo­ple are pre­pared to pay for jour­nal­ism and we be­lieve it’s high time that with the right jour­nal­ism and pre­mium con­tent peo­ple will be pre­pared to pay for that in a dig­i­tal sense,” says Currie.

SELL­ING THE SA U SAGE, NOT THE SIZ­ZLE

But what is pre­mium con­tent? Currie ad­mits it’s quite sub­jec­tive but says “it’s the strong work that re­porters are do­ing each day, with the big in-depth in­ves­ti­ga­tions that you won’t find any­where else”. One news or­gan­i­sa­tion with a pay­wall al­ready in place is News­room. Founded by Tim Mur­phy and Mark Jen­nings in early 2017, the site ap­pears in two forms, one a free news­feed and an­other called News­room Pro. The lat­ter pub­lishes news, com­men­tary and in­for­ma­tion for pay­ing sub­scribers, which

in­cludes cor­po­ra­tions, govern­ment agen­cies, lo­cal coun­cils, NGOS, and in­di­vid­u­als. How­ever, Mur­phy says both News­room and News­room Pro re­port on the things that mat­ter to New Zealan­ders. Look­ing at how the paid sub­scrip­tion model is per­form­ing, Mur­phy says they’re “more than happy with where it’s at” and, while he wouldn’t dis­cuss specifics, he says they’re on track and be­lieves reader rev­enue will con­tinue to grow. Right now, he says 35 per­cent of its in­come comes from sub­scribers and that will be above 50 per­cent by the end of year three. In four- to five-years, he sees sub­scribers be­ing its big­gest form of in­come. But while the pay­wall ap­pears to be on a pos­i­tive tra­jec­tory for News­room, ques­tions have been raised about the ef­fec­tive­ness of a paid sub­scriber model. Ac­cord­ing to Rob Howard, au­thor of Hia­tus, pay­walls con­flict with the in­ter­net age, be­cause they charge read­ers when there is lim­it­less free con­tent. He says for me­dia com­pa­nies to charge read­ers money, they have to en­sure the of­fer­ing is some­thing worth pay­ing for. “The re­al­ity is that 80 per­cent of cur­rentevents news is in­ter­change­able, re­gard­less of your source. If you’re look­ing for to­day’s top sto­ries, you can pick from a lim­it­less list of ven­dors and walk away with a very sim­i­lar body of knowl­edge,” wrote Howard in a piece pub­lished on Quartz, At­lantic Me­dia’s very suc­cess­ful – and free – busi­ness pub­li­ca­tion. An­other point of con­flict he points out is with the pri­mary role of jour­nal­ism, which is to ed­u­cate and in­form the pub­lic about im­por­tant is­sues. How can pub­lish­ers de­cide what is free and what is paid-for in a way that doesn’t un­der­mine their other con­tent? When nzher­ald.co.nz was re­designed it fea­tured a sec­tion called pre­mium and in-depth, which many felt was an ad­mis­sion that all the other con­tent on the site didn’t fit into that cat­e­gory. “When the pa­pers say, ‘this is so im­por­tant that we’re mak­ing it free,’ they’re si­mul­ta­ne­ously say­ing that all the other stuff they pub­lish doesn’t re­ally mat­ter, so they’ll charge you for it. It’s hard to imag­ine a busi­ness phi­los­o­phy that’s more up­side­down,” said Howard.

DO­NA­TION STA­TIONS

One fund­ing model that doesn’t dif­fer­en­ti­ate be­tween con­tent is vol­un­tary dona­tions, some­thing most fa­mously em­ployed by The Guardian, which asks read­ers to sup­port its mis­sion in ex­change for mak­ing con­tent freely avail­able to any­one who wants to see it. Press­pa­tron is one ser­vice al­low­ing dona­tions to be made to news me­dia or­gan­i­sa­tions and founder Alex Clark says for too long pub­lish­ers have been mak­ing the as­sump­tion that they need to repli­cate the news­pa­per strat­egy on­line and force au­di­ences into a fixed price. But that’s not how he thinks they should ap­proach it. His knowl­edge comes from study in dig­i­tal me­dia, en­trepreneur­ship and in­ter­net law at Vic­to­ria Uni­ver­sity of Welling­ton, UT Austin and UC Berkley, as well as work­ing as a me­dia re­searcher. In 2015, he was con­ferred the Mas­ter of Ad­vanced Tech­nol­ogy En­ter­prise hav­ing grad­u­ated with dis­tinc­tion for his the­sis eval­u­at­ing con­sumers’ will­ing­ness to pay for jour­nal­ism un­der dif­fer­ent fund­ing mod­els. In it, he asked 416 re­spon­dents which model they would be pre­pared to pay for when pre­sented with 10 fund­ing strate­gies and had in­ter­views with news me­dia or­gan­i­sa­tions in­clud­ing The New York Times, The Econ­o­mist, Me­di­a­works and Fair­fax. Of those sur­veyed, 1.4 per­cent said “def­i­nitely” to mak­ing a vol­un­tary monthly con­tri­bu­tion to their favourite news web­site or blog­ger, with $11 be­ing the av­er­age amount. 11.1 per­cent said “prob­a­bly” to con­tribut­ing. While not high, the find­ing was sig­nif­i­cantly higher than the 0.24 per­cent who said they would “def­i­nitely” pay for a sub­scrip­tion to a web­site with con­tent restric­tions such as a pay­wall. 2.6 per­cent said “prob­a­bly” to the idea of sub­scrib­ing. “More re­spon­dents were will­ing to make vol­un­tary con­tri­bu­tions than pay for pay­walls,” says Clark. Armed with that knowl­edge, Clark cre­ated Press­pa­tron. It al­lows news me­dia or­gan­i­sa­tions to crowd­source with sup­port­ers of jour­nal­ism who make monthly or one-off con­tri­bu­tions to their favourite me­dia sites. Clark too has been on the front­line of the print ad­ver­tis­ing freeze. He was ed­i­tor of Tear­away mag­a­zine from 2007-2009, through the GFC, and he ex­pe­ri­enced first-hand the trou­ble news me­dia or­gan­i­sa­tion are go­ing through. Clark watched the mag­a­zine drop from 64 pages a month to 28 and within a cou­ple of years af­ter he left, it went out of print. It does, how­ever, re­main on­line. While Tear­away is not us­ing Press­pa­tron, over 18 lo­cal me­dia web­sites are and it’s work­ing to ex­pand across the US and Aus­tralia. From those us­ing it, Clark says its per­for­mance ex­ceeded his re­search, with many sup­port­ing jour­nal­ism and con­tin­u­ing to do so. He says while it’s easy for monthly do­na­tors to can­cel, the can­cel rates are lower than those com­pared to pay­walls, with 85 per­cent of those who signed up still con­tribut­ing each month. “It’s in­cred­i­ble – un­ex­pected in terms of value. It’s ex­ceeded re­search that I’d done.” It’s also ben­e­fit­ting the news me­dia or­gan­i­sa­tions as a way of re­veal­ing what their read­ers care about. This is seen in the in­flux of dona­tions they will re­ceive fol­low­ing hard-hit­ting in­ves­ti­ga­tions. And while clicks have long been a mea­sure of suc­cess, Press­pa­tron has in­tro­duced a new click to mea­sure—the do­na­tion but­ton. “If you look at ar­ti­cles that have the most clicks on the do­nate but­ton, it’s a bet­ter met­ric for qual­ity than page views or time spent read­ing,” Clark ex­plains. “That’s be­cause when you mea­sure clicks you are mea­sur­ing cu­rios­ity, not what they care about.” And that change of fo­cus can only be ben­e­fi­cial to the qual­ity of jour­nal­ism pro­duced, he says. “A lot of sites have pur­sued the mass au­di­ence strat­egy be­cause they are only pur­su­ing ad­ver­tis­ing rev­enue and it’s dis­torted in­ter­nally what they are fo­cused on. They are pri­ori­tis­ing clicks and shares on Face­book. And while it makes sense if they are only re­ly­ing on ad­ver­tis­ing rev­enue, it’s nice there

IF YOU LOOK AT AR­TI­CLES THAT HAVE THE MOS THET CLICKS ON DO­NATE BUT­TON, IT'S A BET­TER MET­RIC FOR QUAL­ITY THAN PAGE VIEWS OR TIME SPENT READIN G. – ALEX CLARK

is an­other model that can help to re­fo­cus on the core mis­sion of what me­dia is all about.” But that’s not to say me­dia out­lets can’t still have ads. Be­cause there’s no pay­wall, there’s no ex­pec­ta­tion that ads will be fil­tered out, which means Press­pa­tron can be used to com­ple­ment ex­ist­ing rev­enue streams. News­room is one of those and it sees over 500 fans do­nate ev­ery month along­side its News­room Pro sub­scribers. Mur­phy says those dona­tions in­clude $10, $20 and up to $100 per month, which to him shows sup­port­ers have faith in it to “keep go­ing hard”. The Spinoff is also us­ing Press­pa­tron to fund in­ves­tiga­tive long-form pieces and while the dona­tions have seen it fund its own writ­ers Alex Casey and Noelle Mccarthy’s ‘In plain sight: be­hind the pages of Pave­ment mag­a­zine’ in­ves­ti­ga­tion, part­ner­ships ed­i­tor Si­mon Day points out Press­pa­tron is en­cour­ag­ing for in­di­vid­ual jour­nal­ists. “As a free­lancer, it can be re­ally dif­fi­cult to fund your abil­ity to do the much harder sto­ries be­cause you have to do a whole lot of leg work that’s un­paid be­fore you get to a point where you are able to pitch an in­ves­ti­ga­tion,” he ex­plains. “It can keep some free­lance jour­nal­ists afloat.” Press­pa­tron is also keep­ing afloat not-for-profit plat­forms, such as Crux and The Scoop Foun­da­tion. The for­mer is owned and pub­lished by the not-for-profit South­ern Com­mu­nity Me­dia Trust, which pro­vides is­sues and ac­tion fo­cused pub­lic in­ter­est jour­nal­ism to the South­ern Lakes Dis­trict, while The Scoop Foun­da­tion for Pub­lic In­ter­est Jour­nal­ism is a not-for-profit char­i­ta­ble trust with an aim of mak­ing in­for­ma­tion freely avail­able to New Zealan­ders.

SPON­SORS – A MOR AL DILEMMA?

Like News­room and many other web­sites, in­clud­ing ICG Me­dia brands Stop­press, Idea­log and The Regis­ter, The Spinoff’s Press­pa­tron dona­tions are sup­ported by an­other rev­enue stream: spon­sor­ships. Whether it’s one-off pieces or spon­sor­ships of en­tire sec­tions, Day says they are brands in­ter­ested in fa­cil­i­tat­ing in­ter­est­ing and mod­ern con­ver­sa­tion around the world and they in­clude Spark, Ki­wibank and found­ing spon­sor Light­box. For Spark, its spon­sor­ship is seen in The Spinoff’s mu­sic sec­tion and that’s rep­re­sen­ta­tive of its de­sire to fos­ter and en­cour­age great mu­sic ex­pe­ri­ences – a goal linked to its spon­sor­ship of the Spark Arena and part­ner­ship with Spo­tify and Auck­land City Lim­its. Mean­while, when The Spinoff teamed up with Ki­wibank in 2016, man­ag­ing ed­i­tor Dun­can Greive wrote about the part­ner­ship, ex­plain­ing the top­ics it will be cov­er­ing about the econ­omy are crit­i­cally im­por­tant to our so­ci­ety, so it has at­tempted to fill them with the chaos and hu­mour the site is known for. “…I hope they travel a long way. Ki­wibank’s aim and ours is to get our au­di­ence to be more con­scious in their con­sump­tion and think about where the dol­lars are go­ing, and what they’re fu­el­ing,” Greive said. Sounds like a win-win for both par­ties. But that win-win does raise the eye­brows of some be­cause they be­lieve brands fund­ing jour­nal­ism throws up an eth­i­cal dilemma. Do they in­flu­ence edi­to­rial de­ci­sions? Day says: “We’ve never had a story jeop­ar­dised, or put back in the draw, or ma­nip­u­lated for the ben­e­fit of one of our spon­sors.” Ev­i­dence of the point can be seen in The Spinoff Bul­letin, a cu­ra­tion of sto­ries from around New Zealand me­dia de­liv­ered to in­boxes with the help of its spon­sor Vec­tor. Day says ear­lier this year when Vec­tor was un­der fire for its post-auck­land storm re­sponse, The Spinoff in­cluded sto­ries about it in The Bul­letin. Vice is an­other news me­dia com­pany with spon­sors in its fund­ing mix, and like Day, ed­i­tor Frances Mor­ton is adamant they don’t in­ter­fere with edi­to­rial de­ci­sions. When en­ter­ing into a part­ner­ship, she says they will al­ways ask them­selves “will we be mak­ing this con­tent any­way?” and put the in­ter­est of the au­di­ence first. “I think that’s one of the rea­sons we are at­trac­tive to brands and have that strong re­la­tion­ship with our au­di­ence. There have been times in the past where we have turned down deals be­cause we didn’t feel con­fi­dent that we wanted to be putting out that con­tent.” For TVNZ, ev­ery part­ner­ship is en­tered into with great con­sid­er­a­tion be­cause Gille­spie says sell­ing spon­sor­ships is more than just a fi­nan­cial trans­ac­tion. “The big­gest thing we have to sell is out cred­i­bil­ity,” he ex­plains, “and if au­di­ences think that’s been af­fected by a spon­sor­ship or a logo that’s in­volved in bring­ing the news and cur­rent af­fairs then we are killing the goose that lays the golden eggs.” Look­ing at TVNZ’S of­fer­ing as a whole, not news alone, ac­cord­ing to its 2018 in­terim re­port, TVNZ en­joyed growth in TV and on­line ad­ver­tis­ing in­come, which con­trib­uted to to­tal rev­enue of $170.4 mil­lion, up $1.6 mil­lion (or one per­cent year-on-year). News­room also re­lies on spon­sors and Mur­phy joins the cho­rus in say­ing those spon­sors do not in­ter­fere. He says the reper­cus­sions of in­ter­fer­ence are not pos­i­tive for ei­ther party. “Ev­ery­one is very ma­ture and com­mer­cially aware: If you are get­ting into

that zone of in­flu­enc­ing con­tent it’s not good for you.” Most say there is no in­ter­fer­ence from spon­sors with this fund­ing model and most spon­sors un­der­stand that their con­nec­tion doesn’t guar­an­tee pos­i­tive cov­er­age. But many be­lieve it’s more sub­tle than that. It’s often about the sto­ries that might not be writ­ten when oth­ers are. Com­mer­cial and edi­to­rial de­part­ments were orig­i­nally set up to be like church and state. And they were set up like that for a rea­son. As Chris Keall wrote on NBR: “Corporate spon­sor­ships al­ways come with sub­tle and not-so-sub­tle pres­sure, par­tic­u­larly as re­newal ap­proaches. And in my im­me­di­ate ex­pe­ri­ence, even when a com­pany has ma­ture lead­er­ship, there’s often at least one man­ager who thinks they can lever­age the sit­u­a­tion for in­flu­ence.” But as News­room’s Mur­phy replied in the com­ments: “Your ar­gu­ment is com­pletely dis­proven by the fact that we did an un­com­fort­able story in­volv­ing one of our foun­da­tion sup­port­ers and treated them ex­actly the same as any other or­gan­i­sa­tion or news­maker. Full­stop. We ran what they de­cided they would say in re­sponse to de­tailed ques­tions we put to them.” An­other is­sue is that spon­sors have a habit of leav­ing as new mar­keters ar­rive, new strate­gies are im­ple­mented or goals aren’t reached. When a spon­sor is in­te­gral to the cre­ation of new sec­tions, it be­comes even harder.

GET UP, STAND UP

If 2017’s EY Busi­ness Jour­nal­ism Awards are any­thing to go by, not all brands ap­pre­ci­ate the need to step aside. New Zealand jour­nal­ists proved their in­tegrity last year when many boy­cotted the awards af­ter a badly han­dled con­flict of in­ter­est. It dis­qual­i­fied an NBR se­ries that was crit­i­cal of Fuji Xerox New Zealand, which was one of EY'S au­dit clients. With NZ Lis­tener jour­nal­ist and judge Re­becca Mac­fie's sug­ges­tion that the two EY judges sim­ply re­move them­selves from the judg­ing ig­nored, she was prompted to re­sign. NBR showed sol­i­dar­ity with its jour­nal­ist by with­draw­ing all en­tries from the awards and it was fol­lowed by oth­ers, in­clud­ing NZME, Fair­fax and RNZ. When ed­i­tor Dun­can Bridge­man shared the news of the con­flict of in­ter­est and NBR’S de­ci­sion to with­draw its en­tries, he said: “Jour­nal­ism is meant to act as a pub­lic watch­dog and does so with­out fear or favour. If corporate spon­sors can’t ac­cept that, and in­stead do the ex­act op­po­site, what busi­ness do they have run­ning these awards?” He isn’t the only one at NBR rais­ing ques­tions about the in­volve­ment of corporate spon­sors as a means of sup­port­ing jour­nal­ism. Pub­lisher Todd Scott, who was NBR’S chief ex­ec­u­tive and sales chief be­fore buy­ing out long-time pub­lisher Barry Col­man in 2012, con­sid­ers him­self a pas­sion­ate ad­vo­cate and sup­porter of jour­nal­ists and doesn’t see corporate spon­sors as the way to go. “I’ve got some real con­cerns over the num­ber of, par­tic­u­larly new me­dia, that are re­ly­ing on spon­sor­ship or corporate wel­fare to fund their news­rooms.” De­spite the re­as­sur­ances that are given in con­tracts, Scott says we have to ac­cept the only rea­sons cor­po­rates of­fer the fund­ing is be­cause they be­lieve they will get some­thing favourable in re­turn. “It could be all above board but as long as that type of fund­ing ex­ists, there’s im­plicit ex­pec­ta­tion that you’d never hang a spon­sor out to dry.” And spon­sors aren’t the only fund­ing model Scott has called into ques­tion. Ear­lier this year, NBR pub­licly stated it would not pay any me­dia agency com­mis­sion, say­ing the "gravy train reign is over”. Scott took to Twit­ter to re­port agen­cies boy­cotting NBR, with phone lines go­ing dead and email book­ings and en­quiries stop­ping. How­ever, it didn’t seem to con­cern him as he said clients’ needs al­ways come first and “agen­cies are not the client”. An­other tweet said: “Fo­cus on the mis­sion not the com­mis­sion” and, for Scott, that mis­sion is in­creas­ing sub­scribers, which he sees as the only way to eth­i­cally fund jour­nal­ism. “There are no con­flicts of in­ter­est if what you are do­ing is de­liv­er­ing a ser­vice to mem­ber sub­scribers or read­ers that pay for con­tent. They don’t con­trol how you write it, they sim­ply want to sup­port eth­i­cal, in­tel­li­gent, un­bi­ased jour­nal­ism.” Right now, NBR has over 5,000 in­di­vid­ual on­line sub­scribers com­mit­ting $35 a month to its of­fer­ing and 181 sub­scribers pay­ing vary­ing amounts for com­pany-wide ac­cess via their IP ad­dresses, but he hopes to reach a short-term goal of 10,000 monthly paid on­line sub­scribers. From there, it will set its sights on 30,000 and then, as he told RNZ’S Colin Pea­cock, 100,000. He says there is too much free con­tent out there and the rea­son it’s free is be­cause ad­ver­tis­ers, cor­po­rates and PR com­pa­nies all have a hand in it. “If Don­ald Trump has proved any­thing in Amer­ica, it’s that you need to be cog­nisant of who you are re­ly­ing on for your me­dia. Who do you trust? Who do you rely on? Ab­so­lutely there are 10,000 sub­scribers out there.” To get the num­bers up, Scott says NBR plans to broaden its con­tent out­side the silo of busi­ness news and get in­volved in the busi­ness of sci­ence and the busi­ness of medicine. “What’s ex­cit­ing about it is when we get to 10,000 monthly on­line paid sub­scribers, we will be even less re­liant on ad­ver­tis­ing sup­port and that money we gen­er­ate from paid sub­scrip­tions will be rein­vested so that we can broaden the over­all ap­peal of our of­fer­ing,” he ex­plains. “NBR in the fu­ture—they won’t know that it stood for Na­tional Busi­ness Re­view. Peo­ple will know it stands for exclusive, in­tel­li­gent con­tent that’s not freely avail­able and you have to sub­scribe to.” Look­ing be­yond its con­tent of­fer, NBR is

in­vest­ing in tech­nol­ogy to keep up with how its cur­rent and po­ten­tial fu­ture sub­scribers want to read, watch, lis­ten and en­gage with it. The first will be a new web­site in July that’s seen half a mil­lion dol­lars of in­vest­ment be­fore a mo­bile app launches later in the year in­volv­ing ad­di­tional in­vest­ment.

MERGER SHE WROTE

NBR’S plan is well un­der­way, and, given the pres­sure on its pre­vi­ously lu­cra­tive print prod­uct, it needs to move fast. The same goes for NZME and Stuff, but their hope to face the changes and move for­ward to­gether as one has not gone quite to plan. In 2016, the two sought ap­proval for a merger in re­sponse to their busi­ness mod­els be­ing un­der­mined by the in­ter­na­tional gi­ant, aka Face­book and Google. The merger pro­posed to bring the two news­pa­per net­works and cor­re­spond­ing on­line news sites un­der com­mon own­er­ship. The Com­merce Com­mis­sion’s pre­lim­i­nary view was that the merger would be likely to sub­stan­tially lessen com­pe­ti­tion in ad­ver­tis­ing and reader mar­kets – specif­i­cally Sun­day news­pa­pers, on­line news and com­mu­nity news­pa­pers in 10 re­gions. It also in­di­cated that the merger would not be of such a ben­e­fit to the pub­lic that it should be al­lowed. The de­ci­sion was later up­held by the High Court and that rul­ing is be­ing ap­pealed in the Court of Ap­peal. Should that be suc­cess­ful, the two com­pa­nies will rene­go­ti­ate the com­mer­cial terms of the deal. Re­flect­ing on the last two years, NZME’S Currie says early on there was un­cer­tainty about what the merger would mean for jour­nal­ists, but as the le­gal process has been drawn out, that has set­tled. Now, the at­ti­tude he sees is heads down, busi­ness as usual to do the best job they can. Sim­i­larly, Stuff edi­to­rial di­rec­tor Mark Stevens says since the “no” came out, it’s cracked on and run its own race and points out “the amaz­ing work that’s come out from both com­pa­nies, jour­nal­ism is strong and healthy at the mo­ment”. How­ever, Stevens does add there was some irony in the de­ci­sion to deny the merger. “There was a lot of con­cern dur­ing the Com­merce Com­mis­sion process around los­ing the plu­ral­ity of voices and the irony is if we are not there we will be los­ing plu­ral­ity of voices.” Dur­ing one of the hear­ings con­ducted in the lead up to the de­ci­sion, Fair­fax Me­dia chief ex­ec­u­tive Greg Hy­wood stated em­phat­i­cally that pre­vent­ing news­pa­per pub­lish­ers from mak­ing nec­es­sary com­mer­cial de­ci­sions would spell an “end-game” for the busi­ness. “We be­lieve that the NZCC has failed New Zealand in block­ing two lo­cal me­dia com­pa­nies from gain­ing the scale and re­sources nec­es­sary to ag­gres­sively com­pete now and into the fu­ture.” Hy­wood also did not shy away from ex­plain­ing what this would mean for the lo­cal busi­ness. “In light of the NZCC de­ci­sion, an even greater fo­cus on cost ef­fi­ciency will be nec­es­sary,” he said. “Mov­ing to the next stage of our New Zealand pub­lish­ing model will in­volve re­shap­ing how we de­liver our jour­nal­ism to lo­cal com­mu­ni­ties. Fur­ther pub­lish­ing fre­quency changes and con­sol­i­da­tion of ti­tles i s an in­evitabil­ity.” That state­ment has since be­come a re­al­ity, as it an­nounced in Fe­bru­ary that 28 mast­heads would be sold or closed. This fol­lowed Fair­fax Me­dia re­port­ing its net profit, af­ter tax, for the six months to end of De­cem­ber reached $38.5 mil­lion, a 54 per­cent drop on the prior cor­re­spond­ing pe­riod. For the lo­cal arm of the com­pany, now re­branded as Stuff, the six-month in­terim results re­leased in March showed print ad­ver­tis­ing rev­enue fell by 14.9 per­cent and au­di­ence sub­scrip­tion dropped by 4.3 per­cent. And ac­cord­ing to the New Zealand Her­ald, as of 22 April, half of Stuff’s rev­enue comes from its top five mast­heads, in­clud­ing The Do­min­ion Post, The Press and the Sun­day Star-times, while non-print rev­enue ac­counted for 17 per­cent, up from five per­cent just four years ago. Since the an­nounce­ment to sell or close mast­heads, there have been three rounds of clo­sures, amount­ing to 25 closed ti­tles, one sold ti­tle (Av­enues mag­a­zine) and two un­der re­view (Clutha Leader and Kaik­oura Star). Stuff was un­able to find buy­ers for the closed mast­heads and, as a re­sult, 38 jobs have been lost. When 15 of the clo­sures were an­nounced in May, chief ex­ec­u­tive Sinead Boucher said: “This out­come isn’t what we all would have ide­ally wanted, and once again I re­ally want to thank those af­fected for all their hard work over many years.” Stevens says the step away from those mast­heads is not an exit from con­tent, au­di­ences or the read­er­ship in those ar­eas. And he points to Stuff.co.nz and Neigh­bourly as mod­ern ver­sions of the same ser­vice. “We have hun­dreds of thou­sands of mem­bers on [Neigh­bourly] and it makes ab­so­lute sense that we use that to show­case our lo­cal and re­gional jour­nal­ism wher­ever we can.” Mean­while, Stuff’s re­main­ing Mon­day to Fri­day metropoli­tan and re­gional news­pa­pers

NBR IN THE FU­TURE–THEY WON'T KNOW THAT IT STOOD FOR NA­TIONAL BUSI­NESS RE­VIEW. PEO­PLE WILL KNOW IT STANDS FOR EXCLUSIVE, IN­TEL­LI­GENT CON­TENT THAT'S F–REELY NOT AVILABLE. TODD SCOTT

have been reimag­ined, go­ing from broad­sheet to com­pact for­mat. Again, Stevens does not see this as an exit from its con­tent and au­di­ences, say­ing there’s been in­vest­ment in qual­ity con­tent and jour­nal­ism go­ing out in them.

FILL­ING THE GAP

With Stuff shed­ding many of its re­gional jour­nal­ists on the ground, op­por­tu­ni­ties have opened for lo­cal play­ers to swoop in with the de­vel­op­ment of lo­cal apps. Wanaka, Welling­ton, South­land and Nel­son are among eight pro­vin­cial apps that are part of the In­de­pen­dent App Net­work of New Zealand. One of those, the Nel­son App, found a gap to fill when Stuff culled its re­gional sports jour­nal­ists and found it was in a good po­si­tion to take over that role so a sports re­porter was hired. An­drew Board is man­ag­ing di­rec­tor of the app, as well as the in­de­pen­dently owned Nel­son Weekly, and he told RNZ, be­cause of the app he’s in­creased his team of jour­nal­ists by 70 hours a week. More re­cently, The South­land App was launched by Ad­vo­cate South and in the an­nounce­ment, gen­eral man­ager David Pick­ett said: “We ul­ti­mately want to be the de­fin­i­tive place to find ac­cu­rate and timely South­land news, weather and road con­di­tions, sports draws and results, death no­tices and ac­knowl­edge­ments, busi­ness di­rec­to­ries and

much more, with the con­ve­nience of be­ing al­ways at your fin­ger­tips." "Kind of like the news­pa­per of old, but in a for­mat for to­day." Fund­ing for the apps comes from lo­calised, di­rec­tory-style ad­ver­tis­ing and Wanaka App de­vel­oper Tony O’re­gan told RNZ the news apps are pro­vid­ing a sus­tain­able ad­ver­tis­ing rev­enue stream, un­like news web­sites.

N EW REV­ENUE

Look­ing at the dig­i­tal rev­enue fig­ures of me­dia com­pa­nies makes for har­row­ing read­ing in com­par­i­son to what they were mak­ing in print. It’s sim­ply not enough to sus­tain these ex­pen­sive news­rooms, which is why me­dia com­pa­nies are di­ver­si­fy­ing their rev­enue streams. Me­dia com­pa­nies have long at­tempted to sell things, and very few of them have done it suc­cess­fully, but over the last cou­ple of years Stuff has added a num­ber of new, non-news re­lated prod­ucts to sell to its sig­nif­i­cant au­di­ence. It’s launched pay-per-view stream­ing ser­vice Suff Pix, cre­ated Stuff Fi­bre with New Zealand Fi­bre Communications Lim­ited, launched a dig­i­tal en­ergy busi­ness called En­er­gy­clubnz and part­nered up with NIB to cre­ate health in­surance provider Done. When Stuff Fi­bre launched, Si­mon Tong (Fair­fax man­ag­ing di­rec­tor at the time) ex­plained the move was a means by which to keep its news of­fer­ing go­ing. “We’re re­ally proud of the fact that we’ve kept so many jour­nal­ists in their roles around the re­gions, and we re­ally want to main­tain that be­cause that’s what makes us dif­fer­ent,” he said. “The ques­tion isn’t ‘how many jour­nal­ists do we have’, but rather ‘how do we pay for the level of jour­nal­ism we’ve got to­day in the fu­ture.’” NZME, which has a wider range of as­sets at its dis­posal through ra­dio brands and ecom­merce en­gine Grabone, has also re­cently added new re­cruit­ment, au­to­mo­tive and prop­erty plat­forms to its list of dig­i­tal as­sets. Called YUDU, Driven and Oneroof, they ex­tend on clas­si­fied list­ings that have long been in­cluded in news­pa­pers – and more re­cently have moved across to on­line mar­ket­places like Trade Me, Seek or Realestate.co.nz – as they of­fer re­cruit­ment, ve­hi­cle and real-es­tate list­ings re­spec­tively. Currie says it ab­so­lutely sees them as huge op­por­tu­ni­ties for rev­enue. And like Stuff, he does not sig­nal a move away from its pa­pers. “The news­pa­pers are still vi­tally im­por­tant, and our print sub­scribers are very loyal,” says Currie.

COM­BINE AND CON­QUER

Be­yond new rev­enue sources, other op­por­tu­ni­ties for news me­dia or­gan­i­sa­tions have opened up in the form of part­ner­ships. Once upon a time, ex­clu­siv­ity was some­thing used to gain a com­pet­i­tive ad­van­tage but now the value of com­bin­ing tal­ent, re­sources and au­di­ences has been re­alised. For Stuff that’s demon­strated in its work with Māori Tele­vi­sion, RNZ, TVNZ, and New­shub. The lat­ter part­ner­ship re­sulted in A Tale of Two Ci­ties, an in­ves­tiga­tive piece ex­am­in­ing the gaps in pros­per­ity across Auck­land. Stevens says we will see more and more of these re­la­tion­ships and col­lab­o­ra­tions in the fu­ture as a way of se­cur­ing the sus­tain­abil­ity of jour­nal­ism in New Zealand. RNZ’S chief ex­ec­u­tive Paul Thomp­son agrees, say­ing it now un­der­stands if more re­sources, like two news­rooms, are thrown at a story, the im­pact of the jour­nal­ism in­creases. He gives the ex­am­ple of the Panama Pa­pers in­ves­ti­ga­tion when it teamed up with TVNZ and Nicky Hager. They were brought to­gether by the In­ter­na­tional Con­sor­tium of In­ves­tiga­tive Jour­nal­ists and jour­nal­ists spent a week and a half trawl­ing through the lo­cal as­pects of the funds in­cor­po­rated in 21 tax havens. The find­ings were rolled out on RNZ and 1News.

THE N E W NEWS­ROOMS

A more re­cent part­ner­ship of lo­cal me­dia out­lets saw Stuff and Me­di­a­works col­lab­o­rate in a doc­u­men­tary se­ries called 'The Val­ley'. It in­ves­ti­gates the New Zealand De­fence Force’s 2012 bat­tle in Baghak – a val­ley in Afghanistan – that re­sulted in the deaths of two New Zealand sol­diers. The Stuff Cir­cuit team be­hind the se­ries (Paula Pen­fold, Toby Long­bot­tom, Eu­gene Bing­ham and Phil John­son) won Best Team In­ves­ti­ga­tion at the 2018 Voy­ager Me­dia Awards. But not only is it a show­case of qual­ity jour­nal­ism, it demon­strates the new look of jour­nal­ism. It’s made up of a six-part on­line doc­u­men­tary, prime-time broad­cast doc­u­men­tary, a long-form read, an in­ter­ac­tive web­site and a vir­tual re­al­ity ex­pe­ri­ence. That evo­lu­tion in sto­ry­telling was also re­alised in the ad­di­tion of dig­i­tal and mul­ti­me­dia cat­e­gories in the 2018 Voy­ager Me­dia Awards. Best In­no­va­tion in Dig­i­tal Sto­ry­telling went to RNZ for its 'NZ Wars: The Sto­ries of Ruapekapeka' web-doc­u­men­tary, Best Team News Video was won by 1News Now’s 'Edge­cumbe’s poor flood de­fences', and Best Team Fea­ture Video was awarded to New Zealand Her­ald’s 'Un­der the Bridge' se­ries. This kind of jour­nal­ism doesn’t come cheap, it takes a long time to cre­ate, and it isn’t often that ap­peal­ing to ad­ver­tis­ers who tend to shy away from con­tro­versy. So step­ping in to pro­vide some sup­port has been NZ On Air, which, ac­cord­ing to its An­nual Re­port 2017 had an ex­pen­di­ture to­talling $130.8 mil­lion in the 2016/17 year. 60.5 per­cent of that went to na­tional TV, three per­cent to dig­i­tal me­dia, 0.9 per­cent to re­gional me­dia and 24.9 per­cent to pub­lic ra­dio. Within that al­most half a mil­lion went to Stuff for 'The Val­ley' and also for the in­ves­ti­ga­tion 'Last of A Few', a short se­ries fo­cused on three Air Force war veter­ans rep­re­sent­ing the last of their era. They are just two of a num­ber of jour­nal­ism projects funded by NZ On Air, in­clud­ing 'The Si­lence Project' for nzher­ald. co.nz, 'Hi­jacked' for The Wire­less, 'Frame' for The Spinoff and 'Great South Sto­ries' for News­room. While this type of fund­ing can’t sus­tain a com­mer­cial me­dia busi­ness, these dig­i­tal jour­nal­ism projects are help­ing to push jour­nal­ists in new sto­ry­telling di­rec­tions and for Stevens, all it takes is a look around the Stuff news­room to see how the skillsets of jour­nal­ists have changed since the days when writ­ing was the key skill. “When I started you needed to be able to write, now we have jour­nal­ists cre­at­ing au­dio for pod­cast, fronting videos and shoot­ing videos, tak­ing stills, analysing data for data jour­nal­ism pieces, cre­at­ing in­ter­ac­tives and vi­su­al­i­sa­tions of that data and writ­ing sto­ries.” With such va­ri­ety, it’s un­doubt­edly an ex­cit­ing time to be a jour­nal­ist. But it’s also a scary time. Edi­to­rial bud­gets have been con­tin­u­ally cut as com­pa­nies look for cost sav­ings and, with the ap­peal of big salaries in PR and comms roles, many jour­nal­ists have left of their own vo­li­tion. Me­di­a­works’ chief news of­fi­cer Hal Craw­ford sees some hurt and anger among some jour­nal­ists who are re­sis­tant to the changes be­ing forced upon them. “Peo­ple take jus­ti­fied pride in skills they have main­tained over years and it is very alarm­ing for in­di­vid­u­als to find that those skills are no longer valid or they no longer add value in dif­fer­ent en­vi­ron­ments.” He says be­ing re­sis­tant to the change and un­will­ing to move be­yond a fixed skillset is not a good mind­set any­more. On the flip side, those who are will­ing to keep learn­ing will find them­selves in a bet­ter space to get bet­ter results as a jour­nal­ist. “That at­ti­tude is the key to rid­ing out the anx­i­ety.” How­ever, it doesn’t all have to change. As the fake news saga has brought to light, the im­por­tance of jour­nal­ism and the fun­da­men­tals of its prac­tice re­main the same. “So much has changed but those fun­da­men­tal pil­lars of jour­nal­ism haven’t and can’t and won’t change – fair­ness, ac­cu­racy, bal­ance and that term ‘keep­ing the bas­tards hon­est,” says Stevens. Gille­spie agrees, and when re­flect­ing on the pace of re­port­ing on dig­i­tal he says “if you are first and wrong, you are still wrong, you are not re­ally first”. But it’s prob­a­bly RNZ’S Thomp­son, a man at the helm of a me­dia com­pany that is likely to re­ceive ad­di­tional govern­ment fund­ing and is in what many now see as a lux­u­ri­ous po­si­tion as a to­tally non-com­mer­cial broad­caster, who best sums up the fu­ture of jour­nal­ism when he com­pares cock­roaches to jour­nal­ism: “We may get bombed oc­ca­sion­ally but we do sur­vive.” De­spite the nu­mer­ous com­mer­cial pres­sures and ex­is­ten­tial angst in the news me­dia busi­ness, ev­ery­one is hop­ing that the truth will con­tinue to set them free.

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