Can expensive news operations survive the MediaWorks cost-cutters or is there more retrenchment to come?
The closure of the TV3 breakfast shows marks a step backward for a news operation that has been growing.
The question is whether the end of ASB Breakfast and Sunrise simply closes a period of expansion or there is more retrenchment ahead for TV3 news and current affairs.
TV3 news boss Mark Jennings has held a lot of sway at TV3, where John Campbell and Carol Hirschfeld were the clear-cut front people for the channel. But no more.
A longtime journalist at TV3, Jennings has headed the news and current affairs through numerous management incarnations. He has maintained 3 News as a creditable news bulletin that exhibits fewer tabloid instincts than its competitor at state TV.
Having paid so much, private equity owner Ironbridge has a stake in maintaining TV3 as a full-service TV channel - if it is ever to sell it at a profit.
But can a high-cost news operation survive under the new regime at MediaWorks?
Jennings and news had an ally in former MediaWorks chief executive Brent Impey, who presented as a hard-nosed businessman focused on the bottom line.
At heart, though, Impey was a broadcaster who wanted to see MediaWorks grow. He led the company through the good economic times and backed initiatives such as CampbellLive and Sunrise, projects that made strategic sense competing with TVNZ.
But like many companies everything changed with the global financial collapse in 2008. Ironbridge demanded heavy returns to cover debt - returns that the radio division could deliver but TV could not.
If Ironbridge went looking for fat on the MediaWorks carcass they did not find much. Ironbridge restructured debt to ease the tension on the company.
They might have looked at other ways to save money, such as changes to underperforming programmes like CampbellLive and Sunrise.
But Impey would have been in no rush to put the company in reverse. After the restructuring, he left suddenly at the end of last year with a severance payment that is rumoured to be well into seven figures.
Without Impey, and answering to the board-appointed Aussie consultant Ian Audsley, Jennings has been fighting his corner.
Audsley says the change is simply refocusing attention on prime time, when audiences are biggest. He will be replaced soon by Jason Paris who, as head of marketing at TVNZ, oversaw a period when the news operation was put in its place.
The good news for Jennings is that after slow decline CampbellLive has recovered, and 3 News appears to be trucking along.
With ASB Breakfast and Sunrise gone, there will be some relief for maintaining news budgets.
As at TVNZ, which has been considering moving to a 30-minute news package, there will be questions about where TV3 goes next.
The company is planning to introduce more automation to its newsroom for live shows and, including the breakfast personnel, is expected to lose about 22 staff.
TALENT/JOB SEARCH
What will happen to the presenters for TV3 breakfast television? ASB Business presenter Michael Wilson - a seasoned journalist who defected to TV3 two-and-a-half years ago - would be a significant loss.
Calm, soothing and slick, he would appear to have a natural home in public relations if he felt so inclined.
Sunrise host Carly Flynn is with child, due in June, and TV3 had been avoiding making a replacement. The other question hangs over Oliver Driver and his doggy companion Jack.
Like TV One breakfast host Paul Henry, Driver polarises people. He has attracted some Auckland viewers to Sunrise - unfortunately too few.
MediaWorks will announce next week that it's starting a new digital channel on Freeview, most likely with music.
Driver was a former director of Alt TV - which went into liquidation owing creditors $3 million. But it's understood Driver is expensive and unlikely to fit the tight budgets for the new channel.
ONLINE LOSS
What role did Audsley's replacement Jason Paris have in the decision? Paris is on gardening leave after defecting from TVNZ. But the decision to scrap breakfast TV appears to have been made recently.
It must have been a factor in his signing up. MediaWorks chairman Brent Harman has said that Paris will be boosting TV3's interactive arm when he starts in June.
Sunrise and ASB Business had limited capability for delivering news content to the website, which is moribund in comparison to the cross-subsidised tvnz.co.nz.
But with the departure of breakfast TV the website is now at a distinct disadvantage to tvnz.co.nz., which gets an early morning pick-me-up from Breakfast.
GAYE OLD TIME
Record companies are cracking down on advertising soundalikes - music that can allow agencies to avoid expensive licensing fees for well-known songs.
The rights are rarely policed, but it seems they were with Marvin Gaye's classic I Heard It Through the Grapevine, which is at the centre of the crackdown.
So what's going on?
Well, advertisers using established songs pay licensing fees to both publishers and record companies, and to avoid paying the latter they have songs covered by another band.
Commercials and radio ads featuring Grapevine were taken off air when the dispute arose between Sony Music and Ogilvy Advertising. Neither party would name the advertiser or confirm the disputed song title but they said: "After obtaining a copyright licence to use the song's musical score and licence, Ogilvy organised to re-record the song in an attempt to produce its own sound recording.
"In Sony's view, the re-record was so similar to Sony's original recording of the well-known song that reasonable consumers might not have noticed the differences. Ogilvy maintains that its record was distinguishable."
Ad industry contacts said advertising creatives frequently walk a fine line using and amending identifiable tunes in commercials to avoid sometimes paying astronomical fees to use original music.
One agency creative said that a big ad campaign might pay more than $150,000 for a widely recognised song, though New Zealand bands are said to be taking a reasoned approach.
Sony said: "The practice of cheating and using misleading soundalike recordings in advertising is of significant concern to Sony Music and the wider music industry. Sony Music is actively pursuing those who use misleading soundalike recordings without the appropriate licence - as are other master licence holders in New Zealand."
Record companies negotiate licensing deals with ad agencies directly.
The crackdown on advertising is distinct from a review of licensing charges for retailers and gyms by the industry collections agency Phonographic Performances New Zealand (PPNZ). That review is expected to bring an increase in charges to some music users mid-year.
The Copyright Tribunal is considering a case by radio companies challenging PPNZ claims for an increase in the fees they pay PPNZ to play songs
MAD MUSIC
Ad agency bosses insisted they had not heard about the Grapevine issue, but the chairman of the advertising industry body CAANZ - Draft FCB chief executive Bryan Crawford - thought the market for original music was weaker than in the past.
There were fewer big-budget branding campaigns that could sustain the fees. Ad creative Toby Talbot at DDB said there would always be a market for identifiable tunes, but the key was for music to be a factor in ads - not the main focus.
PPNZ PASSES GO
The music industry dodged regulation by watering down PPNZ's monopoly on charging performer licensing fees for the likes of retailers, gyms and sporting events. Under new rules okayed by the Commerce Commission, record companies will be able to negotiate directly to handle licence fees for some performers - so that PPNZ is not the only shop in town for rights.
One aspect of that arrangement is that some retailers will be able to negotiate directly with specific record labels for niche music rights rather than buying industry-wide rights from PPNZ. Apparently this has been an issue with some of the smaller record companies, which had sought exclusive deals with specific groovy cafes.
