Newshub’s demise – the canary in the coalmine?
Media experts say there is now urgency for the Government to throw its support behind news media, as other countries have, or face a distorted democracy or broken news media. Kelly Dennett reports.
‘Folks, this is awful.” When Warner Bros. Discovery boss Glen Kyne addressed Newshub staff yesterday morning he summed up the shockwaves that would immediately ensue – not just in media circles, but around the country.
That statement reportedly followed the announcement delivered by the global conglomerate’s Asia-Pacific president, James Gibbons, immediately beforehand that the company “simply cannot afford to produce news in-house. That’s the fact”.
As Kyne is said to have told Newshub staffers, “Every time we think we’ve landed on stable footing, something comes along and makes it unstable again, forcing us to look at ways of further reducing costs.
“Unfortunately we’ve now reached a stage where any further reduction in costs means proposing major changes.”
Kyne’s description of the TV network’s rollercoaster that in 35 years saw Three restructured, bought out, sold, and again, echoed the uncertainty in newsrooms around the country – “clinging on by their fingertips” Stuff publisher Sinead Boucher recently told Parliament, when a select committee convened to hear submissions on the Fair Digital News Bargaining Bill that could see social media giants pay mainstream media for its content.
By midday yesterday, more than
200 Newshub staff – including editors, journalists, much-loved and recognised TV hosts, camera operators, producers, and website staff – learned that by June they likely wouldn’t have jobs. (Newshub, in a story on its website which appeared after other media had broken the news, has called it a “proposal” but Kyne went further, reportedly saying, “Proposing changes to our operating model is the only way we could see a path for us staying viable in the New Zealand market.”)
Regardless of the path forward, experts spoken to yesterday all agree on one thing: it’s crunch time.
“We are there, where alarm bells are ringing loudly,” says AUT senior lecturer and co-director of its Research Centre for Journalism, Media and Democracy, Dr Merja Myllylahti. “The question is, how far can we go? Where does the buck stop? Do we allow foreign equity companies [to continue] taking over our media business? Look what happens. They do not have... a long-term view on the news.
“Discovery, in the end, they look after their own bottom line and profit, but it’s certainly devastating… Certainly we need a mechanism to support journalism in this country. That’s not in doubt at all. [But] what is the best way? This is tricky.”
State funding of news media has been controversial in recent times, with the flourishing of misinformation and disinformation during the pandemic and lockdowns, which saw an increased distrust of media and journalism. There was widespread scepticism and criticism of the Public Interest Journalism Fund (PIJF), a rescue package launched under the previous Labour government amid increasing calls for government-backed support for struggling news media which particularly suffered during lockdowns.
ACT leader David Seymour, in line to be deputy prime minister, was particularly vocal and the current deputy, NZ First leader Winston Peters, has also previously compared the fund to a bribe, but yesterday said Newshub’s closure was a “disaster”. (Yesterday Prime Minister Christopher Luxon appeared to downplay Newshub’s closure, saying New Zealanders had plenty of news options.)
The three-year, $55m fund, operated and distributed by NZ On Air, an independent organisation, was seen to have strings attached to it. Always intended to be short term, the fund has ended. Over three years it paid for jobs in stretched newsrooms, and funded particular journalism projects across all media, including Stuff, the owner of this newspaper.
The closure of Newshub would see one sole state news broadcaster, TVNZ. Victoria University’s associate professor of its media and communications programme, Peter Thompson, said his concern was not in the plurality of a staterun broadcaster – he didn’t believe there was anything as nefarious about TVNZ as seen in authoritarian regimes – but it was a worry that TVNZ was subject to the same commercial pressures.
“We all know that the television sector and other commercial media sectors have been squeezed very tightly,” he said, “largely because of the loss of advertising to the big platforms, but also the proliferation of online media services which has fragmented the audience.
“In a sense, you’ve got a double whammy – of the decline of advertising dollars, largely attributable to the capture of digital advertising by the platforms, coupled with a fragmentation of a domestic audience because of all the new services.
“The thing that strikes me is there are a couple of unusual contextual considerations. I guess we all hoped the difficulties of MediaWorks, when it got taken over by Warner Bros. Discovery, was that, this is a big international media company that had a huge amount of inventory and capacity to keep the company afloat…. Like a lot of people, I would have expected the ownership to be kinda good news.
“The other thing that strikes me is [it’s] an unusual time for a company to decide to throw the towel in.” The Fair Digital News Bargaining Bill is still winding its way through Parliament, despite a lukewarm response from Media and Communications Minister Melissa Lee.
“That suggests to me that it stems not [from] an immediate problem with the domestic model – although it has lost significant money… [but] that Warner Bros. Discovery, on a global scale, is looking to restructure some of its business because of debt considerations…
“A small company in New Zealand is not seen as a strategic asset to retain. No doubt that was an easy one for shareholders. For me, it underlines the difficulties of trying to sustain a traditional media business model under A: foreign ownership and B: the current condition of the commercial market.”
Thompson didn’t think charging Facebook and Google for the news was a panacea, nor could they solely be blamed for the sector’s struggles. One thing that could happen, as seen under Labour, was the possibility of another rescue package.
When Labour announced the PIJF, during the Covid years, Bauer Media, with its stable of local magazines, had also closed.
Says Thompson, “Whether something like this would goad the Government into taking [action], I don't know. I think it makes the issue more urgent, though.”
A “really, deeply shocked” Mark Jennings, former MediaWorks boss and now co-owner of Newsroom, yesterday sounded disturbed as he spoke to RNZ
“I think it’s really major. Newshub’s newsroom has been… a very strong and vibrant player in the market and an important one for this country. Who is going to keep TVNZ’s news honest now? I think this is a major blow.” Former MediaWorks boss Mark Jennings
about Newhub’s axing.
“I think it’s really major. Newshub’s newsroom has been… a very strong and vibrant player in the market and an important one for this country. Who is going to keep TVNZ’s news honest now? I think this is a major blow.”
Jennings criticised Discovery for having no strategy when it entered the market, and for not acting sooner to try and retain its service.
“It’s not just about news. This is going to impact the local production sector significantly as well. We’re going to see now, probably, a channel of reality shows. At some point you’d have to start questioning the whole channel’s viability, really.”
Jennings, through Newsroom, had reported on meetings between then broadcasting minister Willie Jackson and Discovery, during which Discovery apparently sought financial support, although Jackson refused to confirm the nature of the conversation, citing commercial sensitivity. Jennings yesterday speculated whether or not Discovery had “fully explained the difficulties” to Jackson. Discovery bosses said $100m had left the advertising sector across the country. Jennings also questioned whether the Government would have taken a different view of offering support had it been locally owned.
Former CEO Brent Impey, who left the broadcaster in 2009, was totally unsurprised at the broadcaster’s demise, as “newsrooms are expensive beasts”.
Discovery was in no position to do anything about the continued decline of advertising, he said, but its collapse raised two questions.
One was whether the current fair digital bargaining bill before Parliament, if enacted, would have made a difference – as it has in other countries.
“Yes, it probably would have,” says Impey. “The second question is a much wider one: in New Zealand, what sort of expectation do we have for our news when the media companies are under such significant pressure? Do we want it to be only one free-to-air TV news service? The answer for that at the moment is: that is all the market will have.
And, “Does the taxpayer want to put money into journalism? If they do, what are the expectations? Because if you get public money it's absolutely critical the editors have editorial independence and are not seen as toeing the Government’s line… I think the public quite rightly would question whether there were any strings to the funding.
“It’s very tough – because journalism, which is dependent on advertising in traditional media, is under enormous pressure. I can see it only going downhill in restructuring of newsrooms. TVNZ has done it, Stuff has done it, NZME has done it. It’s tough. The outlook: as long as it is funded solely by advertising, it has no future. I think the pressure will continue.”
As former RNZ executive news editor and former Newshub staffer Craig Norenbergs said yesterday, “Other media company executives will be watching to see how it all goes down… this is not about a failure of standards or not working, but failure of media in New Zealand to react to change years ago.
“It’s unprecedented, and shows the dangers of being bought out by a larger overseas company. The people [at Newshub] were genuinely the best I’ve ever worked with… and I’ve worked everywhere in the world. This is not good for the industry, or democracy. I’m not sure most people get that.”
Journalists and high-profile presenters were mostly unavailable yesterday, with some only saying they were “gutted… sad”. The 6pm news host Mike McRoberts reportedly said he was heartbroken: “We are a pretty good newsroom, if we can’t make it work, who can?”
High-profile documentarymaker, former Three staffer and Webworm blogger David Farrier told The Press the closure was devastating. “I think it’s pretty bleak for the state of journalism in New Zealand. Just the idea of having one TV news source is alarming, really. To not have anyone keeping TVNZ in check is pretty strange. New Zealand has always felt small, but this feels like a huge blow. People … will be missing out in a huge way.
“Of course, I have good friends and former colleagues that work there and do amazing work… It’s a real surprise.
“People need to be really worried about this, to put it bluntly. Journalism is in an incredibly rough spot. I think since Trump got in in 2016 I think there has been this erosion around what journalism is, and people dropping into fringe rabbit holes. People have forgotten what the fourth estate is there for. It’s a much bigger issue than Discovery.”
As presenter Janika ter Ellen said: “The strength of Newshub has always been its incredible tight-knit team, and we will lean on that strength now more than ever. I’ve been lucky to work with some of the best journalists, producers and camera operators in the country during my more than a decade with the company.
“We all believe in the power of our journalism, and we will bring it to New Zealand as long as we have the privilege to do so.”
– Additional reporting: Piers Fuller