"Several stakeholders also observed that they expected the PIJF to improve media diversity and plurality because of its strong focus on Te Tiriti o Waitangi and supporting Māori and Pasifika journalists," Sapere wrote.
"One stakeholder observed that the PIJF represented the first time that public funding had ever been given directly to encourage Māori journalism."
However the report, drawn from interviews with figures in almost all of New Zealand's major media companies, received several warnings that "funding decisions had crossed into editorial decision-making, with New Zealand On Air effectively holding a 'beauty contest' to choose which proposed stories/investigations merited support".
Funding various one-off projects "does little to encourage the industry to confront the true challenges of producing sustainable news".
Support from the fund was described as uneven, creating winners and losers and not necessarily adding to the pool of reporters in New Zealand.
"Despite the impact of Covid-19 being near-universal, some newsrooms benefited from taxpayer-funded staff while others missed out entirely. Others observed that due to the relatively limited pool of journalists in New Zealand, the PIJF was creating a 'giant game of musical chairs' and was leading to salary inflation rather than building new capacity."
NZME, the owners of the New Zealand Herald, recieved money from the PIJF.
Although Sapere said most newsrooms rejected the idea that government funding would influence editorial independence or willingness to criticise the government, some saw the risk.
"Some stakeholders also expressed reservations that public funding of media firms may make those firms beholden to the government of the day and public officials might be reluctant to fund proposals that will be critical of government policies – which would undermine a key plurality objective of the media being able to hold public institutions and elected officials accountable."
Sapere described the idea of permanent funding of private sector funds to supply additional public interest journalism as "deceptively attractive" but coming with real risks. A number of new digital-only services, including BusinessDesk (which first reported on the Sapere analysis), The Spinoff, Newsroom, Crux Media had entered the market and grown by targeting gaps in the market left by traditional media players.
"Any large-scale permanent funding at a national level risks reducing the commercial opportunities available to firms to create content, risks propping up inefficient business models, and may unwittingly tilt the prospects of success/failure for businesses."
Sapere did, however, note a "significant underrepresentation" within newsrooms of Māori, Pasifika and Asian journalists and argued dedicated funding could be made to support established companies to improve newsroom diversity.
"As well as different ethnicities bringing unique perspectives to the news, there is value for many in society in being able to see themselves and their communities reflected in those who are bringing them the important news stories of the day."
Sapere found there was "a case for the government to establish a dedicated funding stream (sitting alongside the [Local Democracy Reporting scheme]) where, in partnership with news firms, public funding is made available to part-fund the training and initial placement of Māori, Pasifika and Asian journalists."
Trialled as part of the PIJF, Sapere "consider there is a case for a dedicated funding programme to be developed with a ring-fenced budget, and with clear objectives, targets and monitoring in place".
Meanwhile, the report also dismissed an idea that New Zealand news media should be able to collectively bargain with Facebook and Google to seek fair payment for journalism used on their digital platforms.
Late last year the News Publishers' Association (NPA) filed an application with the Commerce Commission seeking permission on behalf of its members, which includes NZ Herald publisher NZME, and all other independent New Zealand-owned media organisations.
The move followed a similar "bargaining code" introduced in Australia to help support the sustainability of the Australian news media sector by addressing the bargaining power imbalances between the global digital giants and Australian news businesses.
Sapere noted there was a strong consensus among the New Zealand media industry that global digital platforms are undermining media plurality in New Zealand through their dominance of digital advertising markets and their growing role in the dissemination of news.
However, Sapere argued both parties benefited from each other.
"Digital platforms benefit from increased consumer engagement from having links to news content on their platforms, but it is also apparent that news firms derive considerable value from their content being made easily accessible to consumers via Google and Facebook's platforms through increased brand exposure and increased traffic on their websites."
The report did not agree that Google and Facebook were effectively capturing or reducing advertising revenue that might otherwise flow to news firms.
"Even though the platforms are almost certainly benefiting from facilitating access to news content, it does not follow that this benefit is coming at the expense of news firms or that they are in a zero-sum relationship with news firms.
"Furthermore, if news firms consider that the negative impact that Facebook and Google are having on businesses outweigh the benefits they receive then they can opt-out from having links to their news content or snippets displayed on either platform."
