A major shakeup of the media sector has made commercial operators nervous. Photo / NZME
OPINION:
When the draft legislation revealed the legal name for the new public media entity, it felt like an attempt to keep everyone happy. There was a bit of Aotearoa, a bit of New Zealand and an initialism that went on for days.
By the time it landed, no one was particularly enamoured with what they saw.
The concern now is that this is a prescient glimpse at an organisation that ends up leaving no one satisfied with the end product.
There are certainly signs things could become messy.
Clause 8 of the legislation provides that "if a service is the same, or substantially the same, as a commercial-free service provided by RNZ before the commencement date, Aotearoa New Zealand Public Media (ANZPM) must provide it in a commercial-free manner".
This directive is as vague as any of the communication regarding the merger, but the prickly bit lies in what it doesn't say.
The implication by omission here is that the conjoined entity would have the scope to continue commercialising existing properties while also launching new money-earning ventures.
Even from a practical point of view, this directive runs into a few potential spikes in the road. With the merger set to bring together the TVNZ and RNZ teams, what does this mean for their respective news websites? The non-commercial RNZ and commercial 1News websites currently exist as independent sites. Will this be continued? And if so, how will resources be divided between those two sites, particularly as commercial pressure remains on the TVNZ side of the organisation?
The lack of clarity and the potential consequences have unsurprisingly raised a few eyebrows among commercial media companies.
MediaWorks chief executive Cam Wallace told the Herald he was supportive of a strong public media entity, but was wary of how the amalgamated entity would compete with advertising-funded businesses.
"We remain concerned about the lack of detail in the proposed legislation, specifically how the RNZ/TVNZ business will evolve into new digital segments and whether this will be commercially funded or advertising-free," Wallace said.
"The aggressive timelines that are now required to pass this legislation run the risk of driving unintended consequences for the wider commercial operators which are inconsistent with the objectives."
New Zealand's local commercial operators are competing for a tightening share of the advertising market. Google, Facebook, and Tiktok (perhaps even Netflix in the future) are pulling in hundreds of millions of digital ad spend every year – and there's no sign any of that will change in the near future.
At this stage in the digital economy, it's ludicrous to believe that any local player, regardless of its makeup, is going to turn around that trajectory.
The reality is that any digital ventures started by ANZPM will compete directly with the digital properties owned by existing media companies.
In this sense, the ANZPM merger may well increase stability for public media (still up for debate) but the commercial eco-system will pay for it.
The concern here is two-fold, says NZME chief executive Michael Boggs, as the new entity competes for both audience and growth with commercial companies.
"Following early discussions with the Establishment Board and Ministry of Culture and Heritage, we understand there is no cap or limit to the amount of revenue the entity can make, which is of great concern to NZME and other commercial operators," Boggs says.
"This could lead to the entity using its increased public funding, as well as continuing to grow advertising revenue above expectations, to allow increased investment for competitive strength in audience, platforms, and product and system development at the expense of New Zealand's commercial media."
The added concern is it could use its public funding clout to drive audiences away from commercial media options.
"The new entity using its funding and dominance to compete in already well-served markets, rather than operating as a true public media entity - funding and filling the gaps left by current commercial media," says Boggs.
Spinoff Media Group chief executive Duncan Greive touched on how this might play out in a recent chat with the Front Page podcast.
While full details are yet to be revealed (an ongoing theme), it's understood the new public entity will be directly funded and would not have to go through the process of contesting funding through NZ on Air.
This, says Greive, would give the public entity a significant advantage over commercial companies still hamstrung by the old process.
"The advantage it gives them is that they can be nimble. If you're a production company and you've got a great idea, you can go to TVNZ and they can say they love it.
"With NZ on Air, there might be a funding round in two months, then the decision might take another two months – so that's four months away. But if you go to the public media entity, and they love your idea, they can go into production next week."
There is, of course, a chance the ANZPM leadership takes the high road and veers away from competing directly for ad revenue and collaborates openly with commercial media, but relying on goodwill is never a viable business strategy. There's every chance the next Government might not be as charitable as this one when it comes to funding public broadcasting – which could heap commercial pressure on the organisation to maintain its revenue. Under these circumstances, the public entity will start to keep a keener eye on its commercial imperatives.
Even if the new entity only competes on the audience side, this could also have unintended consequences.
Given ANZPM's large and growing audience will come at the expense of local companies, advertisers searching for scale could become ever more reliant on the global juggernauts.
On that topic, we still haven't been given any convincing answer for how stitching these two organisations together will stem the ongoing migration of audiences to digital platforms like Netflix or Tiktok.
The antiquated view of the media business as a battle of platforms is over. It's now about minutes we spend watching, reading or listening to media, regardless of which device we're on. It's a notion perhaps best captured by the Netflix chief executive who famously proclaimed his number one competition was sleep.
Let that sink in for a moment.
While we spend resources fastening legacy artefacts together, the most powerful media companies are mulling what they can do to pry our eyeballs open for a little longer.
We aren't even fighting the same battle any longer.
The event is described as a series of aggressive sales pitches.