4 Mar 2024

Government keeps media problems at arm’s length

From Mediawatch, 5:34 pm on 4 March 2024
Prime Minister Christopher Luxon and Minister Simeon Brown at post-cab

Photo: RNZ / Angus Dreaver

The Newshub closure announcement, TVNZ’s slump in revenue and Meta scrapping news funding across the Tasman all threw media companies' problems into sharp relief last week - but the government appeared ambivalent. Ministers discussed those issues today but the PM says it has no plans yet to ease the industry’s problems.

At the post-Cabinet press conference today the Prime Minister defended his media minister Melissa Lee from criticism about a lack of public response to the problems besetting the news media. 

“She is deeply about the issues within the media. We had a wide-ranging conversation around some of the challenges it’s facing. I know she’s working pretty hard on some of those big issues,“ Christopher Luxon said. 

“(Warner Bros Discovery) is one of the largest media companies in the world, worth billions and billions of dollars. They couldn’t make the media model work for them here with Newshub. It’s worrying and it’s concerning but the reality is a big change in the way people are consuming the news.”  

“We have to make sure there’s a plurality of voices across the country - and that’s important to us.”

Asked if the government supported the Fair Digital News Bargaining Bill - a means of forcing Facebook and Google to pay for news - he said he would wait for a Parliamentary Select Committee to report back in May. 

“I have observed what has happened in Canada and in Australia and we want to take away all that and work out what we do.“ 

He said the transmission fees paid to state-owned Kordia had been raised with Newshub’s owner Warner Bros. Discovery, but Cabinet had not considered whether these could be postponed or reduced for broadcasters.   

“There are long-term systemic challenges in the sector - as there are other sectors around New Zealand. There have been changing consumer habits for media and a degeneration of the advertising model and many media companies are struggling to retool their innovation to deal with it.

“Around the world they need a high-level of innovation to find new ways to make their businesses work.”

How pressure piled up on the PM and media minister 

After Warner Bros Discovery announced the proposal to scrap Newshub on Wednesday, the PM said intervention was “highly unlikely.” 

Lee said it was essentially a case of a company taking action because “its business model isn’t actually working” - and added there were still “plenty of medias about” for people to choose. 

But only one other makes and broadcasts TV news nationally - state-owned TVNZ, of which Lee is shareholding minister. 

On Friday TVNZ posted significant financial losses, with revenue for the year slumping by 13.5 percent - in spite of its comprehensive dominance of the free-to air TV business and the fact it has been excused the burden of returning a dividend to the Crown in recent years.   

The minister had little to say about that, other than to assure reporters she was aware of the problems and “taking them seriously”. 

National-led governments have usually been as 'hands-off' as possible in the media market. 

But state ownership of TVNZ - and nearly $300m a year in public funding for RNZ, Whakaata Maori, NZ on Air, Te Mangai Paho and others - make the government an even bigger player in today’s fast-shriveling market, whether it likes it or not.

The National Party went into the election six months ago without a media policy of its own - other than opposing its predecessor’s initiatives. 

It opposed Covid-19 crisis relief measures and Labour’s Public Interest Journalism Fund of $55m over three years. Labour’s planned new public media entity (dumped pre-election by by Labour itself) was dubbed “a solution looking for a problem” and in Parliament, Lee condemned the Fair Digital News Bargaining Bill as “literally" a shakedown.   

After the shock Newshub news last week, Lee said she’d wait to see what a Select Committee made of the Bill in May, but when questioned in Parliament, she said the government response would “take into account these latest developments in terms of the wider media landscape".

RNZ’s Guyon Espiner revealed today that officials warned the new government last November it may face requests to bail out media companies if it failed to pass the Bill.  

The jeopardy was also pretty clear in the Briefing to the Incoming Minister drafted the same month  - but only made public a month ago. 

Under the blunt heading ‘Traditional media business models are failing’, the Minister was told:

“The longer-term viability of New Zealand commercial media, and the local content and perspectives they provide, is at risk.

“Advertising revenue on traditional news media entities is declining... and at the same time, large online companies are increasingly competing for digital advertising revenue and audiences while making a limited contribution to local jobs and content.”