Media under the sinking lid in 2024

This week, Minister of Racing Winston Peters announced the end of greyhound racing in the interests of animal welfare.

Soon after, a law to criminalise killing of redundant racing dogs was passed under urgency in Parliament.

The next day, the minister introduced the Racing Industry Amendment Bill to preserve the TAB's lucrative monopoly on sports betting which provides 90 percent of the racing industry's revenue.

"Offshore operators are consolidating a significant market share of New Zealand betting - and the revenue which New Zealand's racing industry relies on is certainly not guaranteed," Peters told Parliament in support of the Bill.

But offshore tech companies have also been pulling the revenue rug out from under local news media companies for years, and there has been no such speedy response to that.

Digital platforms offer cheap and easy access to unlimited overseas content - and tech companies' dominance of the digital advertising systems and the resulting revenue is intensifying.

Profits from online ads shown to New Zealanders go offshore - and very little tax is paid on the money made here by the likes of Google and Facebook.

On Tuesday, Media Minister Paul Goldsmith did introduce legislation to repeal advertising restrictions for broadcasters on Sundays and public holidays.

"As the government we must ensure regulatory settings are enabling the best chance of success," he said in a statement.

The media have been crying out for this low-hanging fruit for years - but the estimated $6 million boost is a drop in the bucket for broadcasters, and little help for other media.

The big bucks are in tech platforms paying for the local news they carry.

Squeezing the tech titans

In Australia, the government did it three years ago with a bargaining code that is funnelling significant sums to news media there. It also signalled the willingness of successive governments to confront the market dominance of 'big tech'.

When Goldsmith took over here in May he said the media industry's problems were both urgent and acute - likewise the need to "level the playing field".

The government then picked up the former government's Fair Digital News Bargaining Bill, modelled on Australia's move.

But it languishes low down on Parliament's order paper, following threats from Google to cut news out of its platforms in New Zealand - or even cut and run from New Zealand altogether.

Six years after his Labour predecessor Kris Faafoi first pledged to follow in Australia's footsteps in support of local media, Goldsmith said this week he now wants to wait and see how Australia's latest tough measures pan out.

(The News Bargaining Incentive announced on Thursday could allow the Australian government to tax big digital platforms if they do not pay local news publishers there)

Meanwhile, news media cuts and closures here roll on.

The lid keeps sinking in 2024

"I've worked in the industry for 30 years and never seen a year like it," RNZ's Guyon Espiner wrote in the Listener this week, admitting to "a sense of survivor's guilt."

Just this month, 14 NZME local papers will close and more TVNZ news employees will be told they will lose jobs in what Espiner described as "destroy the village to save the village" strategy.

Whakaata Māori announced 27 job losses earlier this month and the end of Te Ao Māori News every weekday on TV. Its te reo channel will go online-only.

Digital start-ups with lower overheads than established news publishers and broadcasters are now struggling too.

"The Spinoff had just celebrated its 10th birthday when a fiscal hole opened up. Staff numbers are being culled, projects put on ice and a mayday was sent out calling for donations to keep the site afloat," Espiner also wrote in his bleak survey for the Listener.

Spinoff founder Duncan Grieve has charted the economic erosion of the media all year at The Spinoff and on its weekly podcast The Fold.

In a recent edition, he said he could not carry on "pretending things would be fine" and did not want The Spinoff to go down without giving people the chance to save it.

"We get some (revenue) direct from our audience through members, some commercial revenue and we get funding for various New Zealand on Air projects typically," Greive told Mediawatch this week.

"The members' bucket is pretty solid. The commercial bucket was going quite well, and then we just ran into a brick wall. There has been a real system-wide shock to commercial revenues."

"But the thing that we didn't predict which caused us to have to publish that open letter was New Zealand on Air. We've been able to rely on getting one or two projects up, but we've missed out two rounds in a row. Maybe our projects ... weren't good enough, but it certainly had this immediate, near-existential challenge for us."

Critics complained The Spinoff has had millions of dollars in public money in its first decade.

"While the state is under no obligation to fund our work, it's hard to watch as other platforms continue to be heavily backed while your own funding stops dead," Greive said in the open letter.

The open letter said Creative NZ funding had been halved this year, and the Public Interest Journalism Fund support for two of the Spinoff's team of 31 was due to run out next year.

"I absolutely take on the chin the idea that we shouldn't be reliant on that funding. Once you experience something year after year, you do build your business around that ... for the coming year. When a hard-to-predict event like that comes along, you are in a situation where you have to scramble," Grieve told Mediawatch.

"We shot a flare up that our audience has responded to. We're not out of the woods yet, but we're really pleased with the strength of support and an influx of members."

Newshub shutdown

A recent addition to the Spinoff's board - Glen Kyne - has already felt the force of the media's economic headwinds in 2024.

He was the CEO of Warner Brothers Discovery NZ and oversaw the biggest and most comprehensive news closure of the year - the culling of the entire Newshub operation.

"It was heart-wrenching because we had looked at and tried everything leading into that announcement. I go back to July 2022, when we started to see money coming out of the market and the cost of living crisis starting to appear," Kyne told Mediawatch this week.

"We started taking steps immediately and were incredibly prudent with cost management. We would get to a point where we felt reasonably confident that we had a path, but the floor beneath our feet - in terms of the commercial market - kept falling. You're seeing this with TVNZ right now."

Warner Brothers Discovery is a multinational player in broadcast media. Did they respond to requests for help?

"They were empathetic. But Warner Brothers Discovery had lost 60-70 percent of its share price because of the issues around global media companies as well. They were very determined that we got the company to a position of profitability as quickly as we possibly could. But ultimately the economics were such that we had to make the decision."

Smaller but sustainable in 2025? Or managed decline?

Kyne did a deal with Stuff to supply a 6pm news bulletin to TV channel Three after the demise of Newshub in July.

He is one of a handful of people who know the sums, but Stuff is certainly producing ThreeNews now with a fraction of the former budget for Newshub.

Can media outlets settle on a shape that will be sustainable, but smaller - and carry on in 2025 and beyond? Or does Kyne fear media are merely managing decline if revenue continues to slump?

"It's slightly terrifying because the downward pressures are going to continue into next year. Three created a sustainable model for the 6pm bulletin to continue.

"Stuff is an enormous newsgathering organisation, so they were able to make it work and good luck to them. I can see that bulletin continuing to improve as the team get more experience."

No news is really bad news

If news can't be sustained at scale in commercial media companies even on reduced budgets, what then?

Some are already pondering a 'post-journalism' future in which social media takes over as the memes of sharing news and information.

How would that pan out?

"We might be about to find out," Greive told Mediawatch.

"Journalism doesn't have a monopoly on information, and there are all kinds of different institutions that now have channels. A lot of what is created ... has a factual basis. Whether it's a TikTok-er or a YouTuber, they are themselves consumers of news.

"A lot of people are replacing a habit of reading the newspaper and listening to ZB or RNZ with a new habit - consuming social media. Some of it has a news-like quality but it doesn't have vetting of the information and membership of the Media Council ... as a way of restraining behaviour.

"We've got a big question facing us as a society. Either news becomes this esoteric, elite habit that is either pay-walled or alternatively there's public media. If we [lose] freely-accessible, mass-audience channels, then we'll find out what democracy, the business sector, the cultural sector looks like without that.

"In communities where there isn't a single journalist, a story can break or some someone can put something out ... and if there's no restraint on that and no check on it, things are going to happen.

"In other countries, most notably Australia, they've recognised this looming problem, and there's a quite muscular and joined-up regulator and legislator to wrestle with the challenges that represents. And we're just not seeing that here."

They are in Australia.

In addition to the News Bargaining Code and the just-signalled News Bargaining Incentive, the Albanese government is banning social media for under-16s. Meta has responded to pressure to combat financial scam advertising on Facebook.

Here, the media policy paralysis makes the government's ferries plan look decisive. What should it do in 2025?

To-do in 2025

"There are fairly obvious things that could be done that are being done in other jurisdictions, even if it's as simple as having a system of fines and giving the Commerce Commission the power to sort of scrutinize large technology platforms," Greive told Mediawatch.

"You've got this general sense of malaise over the country and a government that's looking for a narrative. It's shocking when you see Australia, where it's arguably the biggest political story - but here we're just doing nothing."

Not quite. There was the holiday ad reform legislation this week.

"Allowing broadcasting Christmas Day and Easter is a drop in the ocean that's not going to materially change the outcome for any company here," Kyne told Mediawatch.

"The Fair Digital News Bargaining bill was conceived three years ago and the world has changed immeasurably.

"You've seen Australia also put some really thoughtful white papers together on media regulation that really does bring a level of equality between the global platforms and the local media and to have them regulated under common legislation - a bit like an Ofcom operates in the UK, where both publishers and platforms, together are overseen and managed accordingly.

"That's the type of thing we're desperate for in New Zealand. If we don't get reform over the next couple of years you are going to see more community newspapers or radio stations or other things no longer able to operate."

Grieve was one of the media execs who pushed for Commerce Commission approval for media to bargain collectively with Google and Meta for news payments.

Backing the Bill - or starting again?

Local media executives, including Grieve, recently met behind closed doors to re-assess their strategy.

"Some major industry participants are still quite gung-ho with the legislation and think that Google is bluffing when it says that it will turn news off and break its agreements. And then you've got another group that think that they're not bluffing, and that events have since overtaken [the legislation]," he said.

"The technology platforms have products that are always in motion. What they're essentially saying - particularly to smaller countries like New Zealand - is: 'You don't really get to make laws. We decide what can and can't be done'. And that's quite a confronting thing for legislators. It takes quite a backbone and quite a lot of confidence to sort of stand up to that kind of pressure."

The government just appointed a minister of rail to take charge of the current Cook Strait ferry crisis. Do we need a minister of social media or tech to take charge of policy on this part of the country's infrastructure?

"We've had successive governments that want to be open to technology, and high growth businesses starting here. But so much of the internet is controlled by a small handful of platforms that can have an anti-competitive relationship with innovation in any kind of business that seeks to build on land that they consider theirs," Greive said.

"A lot of what's happened in Australia has come because the ACCC, their version of the Commerce Commission, has got a a unit which scrutinises digital platforms in much the same way that we do with telecommunications, the energy market and so on. Here there is just no one really paying attention. And as a result, we're getting radically different products than they do in Australia."

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