The risks and rewards of Stuff ’s TV move
The news that Stuff Ltd is buying into the TV news production game is a genuinely new and significant development for New Zealand’s media landscape.
Yesterday, Stuff – publisher of this masthead – and Warner Brothers Discovery (WBD) announced they have entered into a contract for Stuff to produce a 6pm news bulletin for Three. It will be one hour on weekdays and half an hour on weekends.
It is expected that some Newshub staff – particularly at the production end of things – will be hired by Stuff to put together the new programme with a limited amount of ex-Newshub on-air talent. Stuff will then also leverage its current journalistic talent, some of whom also have broadcast experience, and stories to produce the news.
Sinead Boucher, Stuff’s owner, has a history of making big calls. The former CEO bought the company for $1 in 2020, and appears to have run it off cashflow since then, eschewing potential new investors. Significant resources have since been tipped into overhauling the creaky and underinvested old tech infrastructure inherited from Nine Entertainment Co. No doubt she will also take satisfaction in taking on a big new thing in the face of persistent rumours about Stuff’s commercial health.
The Newshub brand will cease to exist and be replaced by something else. Some jobs will be saved, but it is an entirely new proposition.
The commercial drivers are simple enough. Warner Bros still wants the lucrative 6pm slot filled but doesn’t want to bear the big costs associated with a full-service TV news outfit. WBD also expects that what is produced will be high-quality news, and it seems likely that there will be performance measures and requirements.
In an interview with The Post, Boucher would not give specifics but confirmed that the arrangement was expected to be profitable for both organisations.
Structurally, it’s a new chapter for the industry.
Stuff has been the one big news company in New Zealand without a broadcast arm. And although it is not acquiring one now, it is venturing into a new platform, a new form of news on linear TV, but more consequently, through the Three Now broadcast video on demand channel.
On paper, this is an undeniably good thing for Stuff. It will finally have a slick at-scale and efficient video-producing arm to add to what it already does that will be able to be used across its digital platforms. In addition to the fee paid by WBD for producing the news, it will also give the privately owned Stuff access to plentiful video content, including Newshub’s archive, to run advertising inventory against. It will also give it the opportunity to cross-promote its Stuff and masthead brands.
There was clearly enough interest in this proposition (and money on the table to produce the news hour) that NZME, Sky News and others were keen to get in on it. Because Stuff – like NZME – is already an at scale news producer, its ability to absorb news costs is greater than smaller outfits rumoured to have also been interested.
That’s on paper. Stuff will now have to properly resource its newly acquired TV contract with the right mix and quantity of bulletin producers, while also trying to get the most out of its existing newsrooms and journalists, which have considerable reach around the country. The extent to which the company gets that mix right will be the key to both the editorial and commercial success of the new proposition.
Yesterday, Stuff executives were talking at a high level, admitting that the details still need to be worked out.
Bringing enough institutional memory and practical know-how into the new news organisation will be challenging. There are plenty of buzzwords around about innovation and the like – which this deal certainly is – but plugging that into a daily grind of producing a news bulletin at a lower cost will be challenging.
There will also be a careful balance to be struck over the economic cost – as opposed to the clearly assumed cashflow benefit – of the new project, especially as the company attempts to build its new masthead paywall business.
For the Government, this is terrific news, and Prime Minister Christopher Luxon said as much. Government ministers have been frustrated about calls for media bailouts of various descriptions (usually not actually made by the media companies themselves), and Broadcasting Minister Melissa Lee has been under pressure to reveal some big media rescue package. Any moves in that direction – such as they were – are held up in Cabinet select committee.
There will still be pressure on the Government to advance the Fair Bargaining Bill. That could well happen in concert with moves made by the Australian Government to ensure that the digital giants continue paying for Australian news.
The development also gives succour to the pro-market Government’s view that the market would sort it out in some fashion. Obviously, Newshub has not been sold, but there will still be two broadcast TV news bulletins on different channels in the evening. The bulletin will also be run on Three Now.
Several Government ministers see this as evidence that something they didn’t think was their problem in the first place has been sorted for the time being.
In a way, this turn of events raises the question of what a traditional TV station even is.
Traditionally understood, stations tend to be branded around in-house talent in news and lifestyle programming, paired with buying in international content and hit shows to set the the basic flavour of the channel against which to sell advertising.
The model is new, and it will require hard work and more than a bit of innovation to get right. Whatever the brand new Three news looks like, it will be new.