1 Mar 2024

When no news is bad news

From Focus on Politics, 7:00 pm on 1 March 2024
Title: "Focus on Politics". National MP Melissa Lee in front of Newshub billboard.

Photo: RNZ

"To axe the whole news division, that's huge and I'm really deeply shocked by it" - Mark Jennings

In a devastating blow to New Zealand's media landscape, Newshub appears set to shut down by the end of June

The response from politicians has been varied, and while some are looking for solutions in the industry it seems too late to rescue the company from financial ruin. 

Hundreds of staff - journalists, camera operators, editors, producers - learned of the proposal to axe the entire news division and other local productions not supported by co-funding at an emergency meeting on Wednesday. 

Warner Brothers Discovery is blaming a collapse in advertising revenue and changes in viewing habits, having made a loss of just under $35m in New Zealand in the 2022 financial year.  

The announcement caused a tidal wave of shock and devastation across the wider media sector. Newshub's newsroom is known for an energetic, agenda-setting and often provocative approach that will leave a massive hole in New Zealand's media landscape. 

The closure also means a lack of direct competition for the state-owned but commercially run television news broadcaster TVNZ, which is facing problems of its own. 

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Focus has quickly shifted to whether Newshub can be saved. Its investigations correspondent Michael Morrah says staff plan to make a proposal to keep the newsroom operating. 

As for government intervention, however, Broadcasting Minister Melissa Lee is adamant there was nothing she could do. She told reporters a lack of competition was not a concern because the media had shifted away from specific platforms like television, and that the company never reached out for assistance. 

"It is actually a structural issue, it's a company that actually felt that their business model isn't actually working," she said. 

But Warner Brothers Discovery did ask both the current and previous government for assistance, via a reduction in the multi-million dollar fee paid to Kordia for the ability to broadcast terrestrial television. Lee said she had sought advice, but "when I spoke to Glen Kyne, Warner Brothers themself actually felt that the ... Kordia fee relief was not going to be helping them in this current situation". 

Other politicians appeared more concerned, with several - Labour's Chris Hipkins, ACT's David Seymour, and NZ First's Winston Peters - all warning it was a problem for democracy. Peters, who said it was a crisis, wanted the coalition to soberly consider what could be done, but refused to share his own ideas. 

Seymour was more forthcoming, saying he had requested advice on whether TVNZ should again be made to pay a dividend, which it has not done since 2021. The state broadcaster, however, reported a first-half operating loss of $17m, with advertising revenue down another 14 percent. Chief executive Jodi O'Donnell is signalling the organisation will need to cut costs further in response. 

Kyne revealed he had proposed a shared news gathering service between the TVNZ, Newshub and RNZ - similar to the former New Zealand Press Association - that would've seen all three organisations supplied with stories. TVNZ rejected the proposal two days later, a decision he describes as disappointing and truly baffling, especially considering its finances. Hipkins and Peters both appeared opposed to having TVNZ pay a dividend. 

Another possibility for supporting the industry includes the Fair Digital News Bargaining Bill - currently before select committee - which would effectively compel big tech companies to pay news outlets to use their content. Labour proposed the idea and Lee says she doesn't support it in its current form - but changes could yet be made. 

She has also proposed a full review of the Broadcasting Act, which has not been updated since 1989, the year Newshub was founded. 

It's not clear what parts of the law the Minister wants to change or when it might happen, but any rewrite of the law will do little to help Newshub and any final decision on the newsroom's future is expected in early April.

In this week's Focus on Politics, Political Reporter Katie Scotcher examines the proposed shutdown of Newshub, the ramifications for the wider media industry and the government's response.

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