29 Feb 2024

Newshub's pain not necessarily TVNZ's gain - advertising expert

7:51 pm on 29 February 2024
The TVNZ logo on the front side of the Auckland Central office.

Photo: RNZ / Michelle Tiang

TVNZ should not expect to be able to charge more for advertising slots during its 6pm news bulletin in the wake of the demise of its only competitor, an expert says.

Newshub looks set to close by the end of June, with owner Warner Bros Discovery saying it cannot find a way to make it profitable. At risk of being lost are not just the 6pm show, but its digital news operation and associated shows like AM and Newshub Nation.

Up to 300 people could lose their jobs, and freelancers will be left with fewer options for work.

Wednesday's shock announcement saw viewership of Newshub's 6pm show that evening up nearly 50 percent, from 214,000 to 318,000.

More viewers usually means higher rates for advertising slots, but TVNZ should not assume they will pick up all of Newshub's audience, says director of media agency Spark Foundry Nicky Greville.

"What we know is the audiences will go to other places," Greville told Checkpoint on Thursday.

"They're going to go somewhere. Now that could be the TVNZ, it could be on their linear channel, it could be on demand, it could be the other online news sites. It could be to peers and indeed, it could be the social channels.

"Until we see where those audience fluctuations will be, it's going to be very difficult to pinpoint or rationalise any increase in a rate from any media partner."

ACT leader David Seymour has suggested the government require TVNZ to deliver higher dividends, claiming the state-owned broadcaster's lack of payouts lately could have "contributed to an uncompetitive market", driving down the price of advertising, which free-to-air broadcasters rely on to make money.

"How is it possible that New Zealand has very, very cheap television advertising and a major player owned by government that doesn't return a dividend as other companies are expected to do?"

Newshub's staff have been told June 30 will be their last day on the job.

Newshub TV presenters Mike McRoberts and Samantha Hayes. Photo: RNZ/Marika Khabazi

Greville said she could not comment on TVNZ's pricing. Newshub's rate card shows a 30-second slot on the 6pm news would typically cost between $9000 and $12,000.

She said TV was a "cost-effective" way to reach people.

"TV is still an incredibly important medium in New Zealand," Greville said. "It still represents really strong mass reach. It's really engaging, it is an effective medium and it's vastly important in terms of representing all regions and all voices across the country."

But there is the issue of fragmentation to deal with, not to mention changing viewer behaviour.

"We have got advertising partners who are pulling back as a whole as they look to protect the viability of their own businesses. And then in combination with that, we have got audiences going to multiple places.

"So the reality is that the total TV universe of people watching has decreased over time and people are not going to one single place from there. Fragmentation is a much-used term in our industry, and that's really aligned to the sheer number of screens and media options that exist in people's homes and hands today."

'A hard ask'

She doubted Newshub would be able to convince advertisers to pony up a bit more, or advertise with them instead of TVNZ, to keep the lights on.

"I think in this environment that is a hard ask. However, in speaking with several other leaders today, I do believe we have a responsibility in our media agency industry with our advertising partners to look at the long-term sustainability of our industry and ensure that we're really understanding the power of local industry providers, or in the case of Warners, those partners that have really significant workforces here on the ground.

"And I do think we have a responsibility to call this out with our advertising partners around supporting that argument for plurality of news content and mass channels."

If Newshub does close, Greville said it would be a "travesty for the New Zealand media industry".

"I'm devastated for my friends and my peers, and I'm devastated that the voices of Kiwis will no longer have that particular time slot there to represent them and that we have less choice in the market."

Broadcasting Minister Melissa does not share Greville's concerns. She turned down Checkpoint's request for an interview, saying she was not available.

In a statement, she reiterated comments she made on Wednesday - that the "way people consume news is changing, with many viewing on their phones, online and on demand".

"The decision that has been made is one by a private business who have assessed the sustainability of the business model. The reason for this is a significant decrease around television advertising which made their business model unsustainable.

"There was some discussion about possible relief from Kordia fees, but Warner Brothers have indicated to us that that would not have made a difference. They have not sought financial support from us."

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