Finding a way through the media maze

Anywhere, anytime, anyhow

Divisions between different media are fast breaking down. Most news organisations now see it as vital to have a dedicated online presence, available on a variety of devices.

The New Zealand Herald, which first came off the presses in 1863, in March reached 2 million people on its website alone. On top of that are the 423,000 daily print readers and 495,300 listeners to Newstalk ZB, also owned by NZME.

The Herald digital audience is growing strongly - up 19 per cent on the year before, according to Nielsen.

An ever increasing portion is coming from readers on smartphones and NZME managing editor Shayne Currie says mobile traffic is up 63 per cent on this time last year.

"Much of our growth is through social media and video channels and on mobile platforms - people are just a fingertip away from engaging in our content," Currie says.

"One of the best examples of a new journalistic channel has been the launch of online video news service NZ Herald Focus," he says. "We recognised, early, that video was a huge growth channel for news - and in just one year we've built our daily Focus brand into a powerhouse that's attracting more than 800,000 - and sometimes more than 1.5 million - weekly views."

Other media are also moving with the times.

"Radio isn't just something that you plug in, stick on top of your fridge and turn on," says Radio New Zealand head of digital Glen Scanlon.

"Your radio is on your phone, it's on your TV, it's in your car, it's on your desktop. So the experience you're building has to work across all of those types of platforms."

Newshub's head of broadcast news, Richard Sutherland, says its re-branding from 3 News about a year ago was an attempt to define the organisation as far more than just the 6pm news bulletin.

"It was a very deliberate move by us to come up with something which sat independently from TV or radio or digital, but could go across all platforms," he says.

As audiences fragment, he says it is vital for news organisations to follow where they go.

TVNZ chief executive Kevin Kenrick says the breakdown of historic boundaries is happening fast. "For us, what we're focused on is being viewer-led and saying, 'what is it that the viewers want to see?'"

"We think, over time, online will grow, linear TV will decline, but overall video is going to grow."

TVNZ chief executive Kevin Kenrick. Photo / Greg Bowker

Where did the money go?

According to the latest PwC global entertainment and media outlook, 14 per cent more was spent on digital advertising in New Zealand last year than in 2015, taking spending to $970m. At the same time, 4.4 per cent less was spent on newspaper ads.

PwC has forecast that internet advertising spending will jump to $1.5 billion by 2020.

At first, that might sound like good news for the big media organisations, which are happy to sell digital advertising.

But advertising and media commentator Martin Gillman, of Krunch.co, says the biggest challenge for the news media is the gargantuan force of Google and Facebook.

While advertisers are doing well by using these global companies, they are not spending their advertising dollars on news websites, he says.

"If you look at the change in the business model for advertising, in its simplest form the old model said the same thing to everybody at the same time. With digital you can target advertising to the relevant people at the most appropriate time," he says.

"You look at the big campaigns like Trump and Brexit, they all employed highly-sophisticated digital techniques where they were tailor-making advertising to many different groups of people with different beliefs at the most appropriate time."

Despite newspapers' fervent efforts to digitise their content, print still provides the lion's share of advertising revenue. Gillman believes digital advertising revenue is not sufficient to make up for the decline in the amount spent on traditional newspaper advertising.

"The growth in digital advertising hasn't been on news sites, it's been on search and social - Google and Facebook," he says. "They're already worth over $1b in this market, and essentially that's $1b that has come out of other media. Print has suffered most but we've also seen TV slow right down."

That is despite newspaper readership numbers being relatively stable.

"Unfortunately, decline in print revenue may accelerate a little bit more now, even though ... we're seeing stabilisation of readership," Gillman says. "So it's not that people aren't reading it, the issue is going to be advertising revenue."

Television and radio are also experiencing declines, but not to the same extent as print.
Television advertisers are increasingly turning to strategies such as product placement, while radio will stay afloat "because their sales people are hustlers," Gillman says.

NZME managing editor Shayne Currie speaks at the Commerce Commission hearing in Wellington on the proposed merger of NZME and Fairfax NZ. Photo / File

New tech, new players

Five years ago, reckons Duncan Greive, he would have struggled to find an audience for his popular online magazine the Spinoff. But after less than three years, the website has a loyal following, despite having just a handful of writers.

The Spinoff is one of a number of online-only news sites to crop up lately.

"There's a huge volume of people, particularly younger people, who might not consume media any other way," Greive says. "So you can either just give up on them as a demographic or you go to where they live and that's what we represent: our readership is generally urban, it's young, it's educated - it's a particular demographic which has largely deserted television."

The Spinoff was set up to write editorial content for streaming service Lightbox, but branched out to cover many topics across a variety of platforms.

"For the first year we were working with young writers, experimenting with different forms, power rankings and podcasts and all the stuff you can do online that you wouldn't be able to do in print. So I started to think, 'This could work, both as a model and in terms of finding an audience with a much broader remit'."

Greive says there was a period during the 2000s when "narrow but deep" websites were becoming extremely popular - sites dedicated to specific topics like, say, guitars or surfing.

But Facebook changed all that, with users turning away from "destination sites" and opting to start specialist groups on Facebook, where they can engage with their fellow Pokemon or motorbike enthusiasts ad nauseam.

Greive says the Spinoff maintained its audience by offering a broad range of content across a range of platforms.

"It's really a guiding principle behind what we do - people might come in to read a Bachelor power rankings, or a politics podcast, or a feature interview, and then stay around for something else. I think that's what's driven our growth."

While the bar for starting a news website is incredibly low - verging on nonexistent - maintaining a site that is credible and trusted takes a lot of work.

"You just have to get up and do it every day and you have to uphold a particular set of standards if people are going to take you seriously," Greive says. "Readers are very discerning."

Spinoff editor Duncan Greive. Photo / Dean Purcell

Making digital pay

Advertising commentator Martin Gillman believes it is imperative for New Zealand newspapers to start charging for online content, a strategy that has been contemplated by the Herald and Stuff for years.

Some overseas newspapers, including the New York Times and Washington Post, allow readers to read only a limited number of stories before they have to pay to continue browsing. New Zealand business publication NBR has also started charging for content.

But it is not such a simple proposition.

"It would have been convenient if [Fairfax and NZME] had merged because now, as soon as the first one puts up a paywall, the readers are just going to read the other one and they are going to benefit from it," Gillman says.

The Spinoff has taken a different approach, not selling advertising, but sponsorship. Spinoff editor Duncan Greive says custom content and brand insights are written by Spinoff journalists and published on the site, identified as sponsored content.

TVNZ chief executive Kevin Kenrick says TV advertising revenue has been slowly declining while digital ad revenue is growing.

But he is confident the growing appetite for on-demand content presents a big opportunity for advertising.

"Something like 10 per cent of YouTube ads are actually watched, because of people clicking off mid-way through. The reverse of that is true with TVNZ on demand, where less than 10% of the ads aren't fully viewed," Kenrick says.

"This is because it's in a long-form video environment and I think consumers understand that you either pay with your wallet, you pay with your time or you pay with your data.

"As long as that seems in balance then that's a tradeoff that people are prepared to make. We're seeing on-demand is growing both in terms of revenue and in terms of viewership and it seems to be a sustainable model."

NZME chief executive Michael Boggs said after Wednesday's Commerce Commission decision that the company was considering its options after what was a disappointing decision for both businesses and their audiences.

He says NZME's strategic focus continues in six key areas: growing audience reach, retaining print revenue, returning radio revenue to growth, growing new revenue streams, ensuring effective cost management and developing people and talent.

Fairfax managing director Andrew Boyle said, "tough decisions will have to be made."

Old school rules

Despite the digital wave sweeping the media landscape, print and broadcast media still have a formidable reach in New Zealand.

In 2016, 423,000 people read a copy of the Herald on average every day, according to Nielsen data, and average daily readership grew by 19,000 from the year before.

The Herald on Sunday - New Zealand's most-read Sunday paper - was read by 320,000 people, also up 19,000 from 2015.

While some predict print's demise, NZME managing editor Shayne Currie says newspapers remain a vitally important part of NZME's stable.

"We have reiterated very publicly, numerous times, that we want to maintain our print revenues and subscribers," Currie says.

"We are seeing growth in our print readership and you're seeing examples overseas where subscriptions are increasing in both print and digital because people are hankering for that quality content. If we can keep producing quality, relevant journalism, then I see our print products going well into the future. Digital is absolutely vital, but we've never ever walked away from our newspapers. It's always been an integral part of our business."

Newstalk ZB - also owned by NZME - gained 36,300 listeners to hit 495,300 overall in the latest radio survey. It retained its spot as the most listened to radio station in the country.
While mainstream media companies embrace new technology, there are some who maintain that the old ways are best.

Wairarapa Times-Age owner Andrew Denholm is a self-confessed luddite, who purchased the regional title from NZME in June last year.

Forget digitisation, convergence of platforms, "socialisation" and all the other buzzwords; Denholm likes his newsprint.

You can pick up a copy of his paper throughout the Wairarapa for $1.50 Monday to Friday and $1.70 on a Saturday. The Times-Age does have a popular Facebook page and a website, but unless it's breaking news, Denholm makes a point of only uploading a selection of stories online.

"The traffic through the website is phenomenal but there's no revenue and I don't really want to migrate readers to the digital product."

Denholm believes the key to his paper's success will be its strong focus on local content. "People are really passionate about their views - they're very parochial and loyal and ... we welcome their engagement. Letters to the editor are gold because we want to have a conversation with the public."