More seismic changes - affecting some of our biggest entertainment shows - are set to unfold after this week’s devastating Newshub news; Where redundant news stars may end up; ‘Utterly infuriating’ - Minister feels the heat; Who’s in line for the TVNZ political editorship? Stuff sports journos learn fate; One
Media Insider: TVNZ’s ‘tough’ $16.7m after-tax loss - Shortland Street, shows in costs spotlight; Newshub talent eye new gigs; Broadcasting Minister under fire
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The impairment pushes the six-month loss past the full-year forecast loss of $15.6m. More details on the financial result are outlined below.
In an interview with Media Insider last week, TVNZ chief executive Jodi O’Donnell was clear there were no “sacred cows” as the state broadcaster considers all of its costs.
Media Insider understands that includes one of the biggest sacred cows of all, Shortland Street, TVNZ 2′s 7pm weekday show, which has been a staple of the New Zealand television diet for 32 years.
TVNZ fully funds Shortland Street to the tune of millions of dollars a year (it stretches to eight figures but the exact costs are deemed commercially sensitive) and with no assistance from the likes of NZ on Air.
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“Everything is under the spotlight,” says a TVNZ spokeswoman. “There are no changes for any shows that I can give you information on today.”
However, TVNZ was looking at all of its slate, including its entertainment programming.
She said audiences were strong for TVNZ “but the revenue isn’t in the market”.
“We are a commercial business. We have to make sure costs align with revenue.”
Asked directly if Shortland Street was safe, she said, “I can’t say that it is, or isn’t”, but added that it was a strong show, delivered five nights a week.
Ratings data shows it is one of TVNZ’s most popular on-demand shows. But it’s a different story on linear television: from highs of almost 350,000 viewers in the critical 25-54 age group in 1999-2010, Shortland Street would be lucky to get a third of those numbers at 7pm now.
Several options are likely under consideration - production costs most definitely, but also the frequency of the shows, and whether the 7pm linear timeslot might be freed up for a more commercially attractive offering.
TVNZ’s spokeswoman followed up further specific questions about Shortland Street and came back with a statement: “For all our commercially funded programmes, whenever we look to renew or green-light content, we go through a thorough analysis process.
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“This will include looking at audience performance and forecast, budgets, revenue outcomes and commissioning principles. We are having these discussions with South Pacific Pictures on Shortland Street at the moment, but this is very much part of our regular renewal process for the show.
“As discussed earlier, [there are] no changes to the format of the show or the scheduling of Shortland Street to announce.”
Shortland Street is produced by South Pacific Pictures, which said yesterday it was in constant discussions with TVNZ about the show.
South Pacific Pictures chief executive Kelly Martin and managing director Andrew Szusterman were not backward about their broader concerns for the production industry, highlighted by this week’s Warner Bros. announcement.
Martin said SPP had done a lot of work over the years to keep Shortland Street fresh and relevant. It ticked every cultural and social box that Government organisations and broadcasters strived to achieve.
An independent report in 2022 revealed the show employed 65 core crew staff, 118 crew contractors, 200 casual crew workers and - across 2021 - 190 cast members, including 21 core cast members. Between 2012 and 2022, the report said, the show generated $227m in direct economic output.
Martin and Szusterman believe a wider and fundamental overhaul of the Broadcasting Act is required in New Zealand.
“The Broadcasting Act was last updated in 1989 and is no longer fit for purpose,” says Szusterman.
”We now have a range of international options like Netflix and Amazon Prime [which] are taking eyeballs from the likes of TVNZ and TV3 and not making any commitment to NZ stories.”
With TVNZ operating as a commercial business - and no official charter in place for local content since 2011 - there is little requirement for it to fund local productions or even news.
They could flick the switch at any time.
The TVNZ Act specifies: “The functions of TVNZ are to be a successful national television and digital media company providing a range of content and services on a choice of delivery platforms and maintaining its commercial performance.”
It says TVNZ must provide high-quality content on three fronts:
- Is relevant to, and enjoyed and valued by, New Zealand audiences; and
- Encompasses both New Zealand and international content and reflects Māori perspectives.
- TVNZ’s services must include the provision of channels that are free of charge and available to audiences throughout New Zealand.
Martin said Warner Bros. Discovery’s moves this week were “certainly a big wake-up call that there are no sacred cows”.
Beyond news, there was a massive production sector at risk.
“Our governments have kicked the can down the road for years; we are doing nothing to protect New Zealand’s voice.”
Shortland Street was not just a breeding ground for some of our biggest acting stars - it also provided a training ground for technical expertise on other local productions.
In Australia, it was announced in December that long-running soap Home and Away would be eligible for government production tax subsidies under new rules.
Shortland Street used to receive NZ on Air funding - would that or other relief be possible again in this ever-evolving media landscape?
TVNZ’s $16.7m loss
TVNZ chief executive Jodi O’Donnell says today’s $16.7 million after-tax loss for the six months to December 31 comes on the back of a 13.5 per cent decrease in revenue, to $155.9 million.
A “challenging” trading environment had seen a significant reduction in television advertising revenue, she said, while digital revenue had increased year-on-year.
“Digital generates nearly a quarter of TVNZ’s advertising revenue,” O’Donnell said.
“The challenge we’re facing into is growing these digital revenues at a faster pace than TV revenues are declining. TVNZ is building a future beyond broadcast television and today’s results show the need for us to make this transition faster.”
She said more than 1.25 million New Zealanders were using TVNZ+ each week.
“TVNZ+ has provided us with a strong foundation for securing a digitally-led future. Our focus is now on increasing our scale and expanding our offering with new products and services to better meet the audiences of tomorrow,” says O’Donnell.
“TVNZ is part way through an all-of-business digital transformation. This multi-year project will move TVNZ from a broadcast organisation with digital bolted on, to a future-focused media entity with digital at its core.”
O’Donnell said TVNZ expected the challenging economic conditions to continue into the second half of 2024.
“We will need to make further changes to our cost base to navigate through this uncertainty,” she said.
“While we hope to see some improvement in the advertising sector in late 2024, we anticipate market disruption from global streaming services and social media platforms to continue, and this means standing still is not an option. Ultimately, we need to get our organisation into the right shape and the right size to compete in a digital world.”
Where Newshub’s top talent might end up
Some of Newshub’s best-known names and faces are already eyeing new roles, following the devastating plan to close the news organisation at the end of June.
Once upon a time, many of the 300 affected staff might have been able to walk directly into new jobs in the sector. But every commercial media company has been in careful cost-management mode over the past 12 months.
That said, there are already various behind-the-scenes phone calls and meetings under way as rival companies jockey for some of the company’s biggest names.
Some of Newshub’s senior journalists are also trying to come up with a rescue plan for their newsroom, as reported by my colleague Tom Dillane last night.
Expect the likes of Ryan Bridge, Paddy Gower, Rebecca Wright, Michael Morrah and others to be among prime big-name targets, on a range of fronts.
The network’s two biggest stars, Samantha Hayes and Mike McRoberts, carry huge mana.
As we saw with Jessica Mutch McKay’s recent move to the ANZ, there is demand in the PR and corporate world for well-connected journalists and broadcasters.
Within the Newshub newsroom there are a range of talented journalists - take senior journalist Nick Truebridge and his agenda-setting series of immigration stories over the past year as one example.
Warner Bros. Discovery also has a raft of talent in the likes of production, PR, advertising sales and marketing roles.
Across the media landscape, there are two big and obvious broadcasting roles up for grabs.
One is the role of host of the one-hour Early Edition show - between 5am and 6am - on Newstalk ZB.
That role was vacated by Kate Hawkesby in December. Her husband and New Zealand’s top radio host, Mike Hosking, has been holding the fort in the interim, ahead of his three-hour Breakfast show.
The other big role is the TVNZ political editorship, although as I report in the column further below, applications have closed and a second round of interviews is under way today.
Broadcasting Minister’s missteps
That extraordinary Newshub bulletin on Wednesday evening - in which staff had to deliver news of their own demise - was also one of the best examples of how democracy will suffer when the company’s newsroom closes.
Broadcasting Minister Melissa Lee’s less-than-stellar and frankly puzzling comments on the collapse of Newshub, with around 300 job losses, came under the spotlight of Newshub political reporter Amelia Wade.
In initial remarks to political journalists, Lee played down the fact there would be just one (state-owned) television news network left delivering New Zealand news.
“Well, there’s Sky as well. There’s a whole lot of other media about,” she told journalists.
Sky TV does not employ any news or investigative journalists. It has a 5.30pm news bulletin, hosted by Eric Young - it’s produced by Newshub and is also facing the axe unless Sky can find another New Zealand newsroom to deliver it news and video packages.
Lee also claimed to political journalists that Warner Bros. Discovery “has never reached out for assistance”.
“It’s not something that they felt that was helpful. I don’t think there’s anything we could have done that would assist them.”
That was wrong and left Warner Bros. Discovery bosses fuming on Wednesday.
“Playing dumb was utterly infuriating and appalling,” one senior source told me.
Warner Bros. Discovery leaders were in Lee’s office at 11.30am on December 21, discussing a range of regulatory and industry issues - including the massive transmission fees that they and other broadcasters pay Kordia; the outdated Broadcasting Act; and the Fair Digital News Bargaining bill.
So after Lee’s initial comments, Wade was back on the phone to the minister before the 6pm news went to air.
The minister clarified that Warner Bros. Discovery had not asked for direct financial assistance, Wade reported live on the bulletin.
An apt illustration of a dogged journalist seeking out the truth - and the importance of a competitive broadcasting and journalism landscape.
Meanwhile, while each of those three industry issues, individually, might not have been able to save Newshub, the broader point is we need a brave Government to start properly tackling the uneven media playing field.
Having Google and Facebook pay a more equitable share of tax would be a start. The tech giants take 90 cents in every digital advertising dollar out of New Zealand - they hire precisely zero journalists, but thrive on local journalism and other content for their extremely profitable platforms.
National didn’t bother releasing a broadcasting and media policy before the election, even though one was apparently prepared. I asked for a copy at the time, but was refused.
Requests for a 1-1 interview with Lee over several weeks have so far not come to fruition. With more big cutbacks expected in some areas of the media industry, the government’s policy and the minister’s performance will be under increasing scrutiny.
One Good Text
This week, with Sam Hayes.
The human moments
Out of the devastation on Wednesday came some lighter and sweeter human moments.
- Newshub staff gathered at a nearby watering hole, Galbraiths Alehouse, for the evening - and the discussions didn’t stop for some, even after closing time. Mike McRoberts, Paddy Gower and Ryan Bridge all kicked on at Bridge’s house afterwards.
- The patterned dress that Sam Hayes wore for Wednesday night’s 6pm news bulletin was the same one she wore for her first appearance with McRoberts in May 2016.
- A truly classy gesture from TVNZ who delivered flowers - and a wonderful note - to their stricken Newshub competitors.
The revenue repercussions
Warner Bros. Discovery boss Glen Kyne has been very upfront with Media Insider that the company’s losses of the past two years - $21m in 2021 and $35m in 2022 - have not been stemmed in 2023.
All indications are they have worsened.
That said, Newshub commanded millions of dollars a year in revenue, through its broadcast and digital channels, including newshub.co.nz.
According to Nielsen’s monthly audience numbers, Newshub is the third-biggest news site.
Stuff was the number-one site in January, followed by the NZ Herald, but those two positions seem set to be reversed for February following a reduction in Stuff’s traffic since its website revamp.
Analysts Forsyth Barr issued a market research note on NZME yesterday, saying it expected the publisher of the NZ Herald would benefit from additional advertising revenue following the pending closure of Newshub.
“The closure of Newshub could offer several potential benefits to [NZME], including: (1) reduced pressure on reporter and editorial expenses, (2) an uplift in viewership for [NZME]’s NZ Herald and BusinessDesk platforms as Newshub’s audience migrates, (3) increased advertising revenue as displaced Newshub advertisers seek new platforms, and (4) the potential to accelerate [NZME]’s digital subscriber growth beyond the +12 per cent we currently forecast in FY24 (down from the +15 per cent and +37 per cent seen in FY23 and FY22 respectively),” wrote analysts James Lindsay and Will Twiss.
“We expect advertisers to relatively quickly move campaigns to other platforms given Newshub’s impending closure.”
“Further, Stuff.co.nz is also dealing with the same challenging ad market, and its attempt to move to a subscription model suggest further industry changes are possible.
“While industry headwinds persist, [NZME]’s strengthened competitive position, potential support for its digital subscription strategy, and conservative balance sheet offer resilience and potential upside.”
The chief executive of ad agency OMD, Nigel Douglas, said his company’s hearts went out “to all the people affected at WBD” and said it was too early to know precisely what would happen to audiences and commercial revenue.
The last few years had been “extremely tough” as the industry moved through digital transformation, he said.
“We didn’t expect it to play out quite like this, but the market conditions are rapidly accelerating the pace of change.
“News attracts significant audiences but is very expensive to produce. What they do in this space and the impacts remain to be seen. The flow-on effects also remain to be determined. We’ve had some early discussions about this in the agency and we can see multiple scenarios which we will work through with our media and client partners to navigate carefully.
“In the meantime, we think the first port of call is to do the best we can to support our colleagues at WBD then regroup around what’s next.
“There’s lots of great people that have given significant parts of their lives to that business, and this will be incredibly distressing.”
Stuff cuts four sports journalists
Stuff sport journalists are expected to hear today the outcome of what has been described internally as a Hunger Games-like scenario in which they’ve been interviewed for a reduced number of roles in a new structure.
Media Insider has been told the number of official roles is being reduced from 17 to 12, equally split between the free Stuff website and the company’s newspaper and paywalled websites. It is understood one of the current 17 roles is a vacancy.
“Everyone’s really nervous; no one’s 100 per cent sure if they are safe,” one Stuff insider said yesterday.
While it is not uncommon for companies to run a selection process, this particular method hasn’t gone down well with some in the Stuff team, according to insiders.
Stuff owner Sinead Boucher confirmed four people would be affected “as we change the focus of our large, nationwide sports team, but we are encouraging them to apply for a range of other editorial vacancies within the Stuff digital or masthead publishing businesses”.
She said the process still had “a few days to play out”.
Meanwhile, Boucher has taken exception to who she calls people who “love to take potshots at Stuff”.
In an email to staff following Warner Bros. Discovery announcement this week, Boucher expressed her support for Newshub staff.
The pending closure, she wrote, was a “blow for not only journalism, but for democracy in New Zealand”.
“Today’s news has also brought out those who love to take potshots at Stuff, and our strong position in the media marketplace. They have been doing this for years - referring to ‘rumblings’ about our financial position and organisational strength.
“I want to unequivocally call them out for this and ensure you all know they are simply wrong. Despite the challenging economic conditions we face currently, and the lobbying we are doing to ensure global media giants pay fairly for the content they publish, Stuff is a profitable, debt-free, stand-alone, independent media business fit for the market we find ourselves in.”
I have heard lots of speculation about Stuff over the years, and more in recent times, but as a private company, it refuses to release any financial details (as is its right).
Interestingly, the Public Trust holds a security interest over Stuff’s assets, as per a financing statement dated November 30, 2023. The BNZ also registered a security interest in early November.
Stuff has ignored my specific questions over the past two weeks about these.
Boucher said Stuff had done a “huge amount” in the last three years to build a modern, digital, media business.
She reiterated that Stuff was profitable and debt-free and she further told me: “Unfortunately, those plainly mischievous, and totally incorrect, potshots I referred to in my note didn’t come from any one person but stem from rumours circulated by a number of our competitors, as they have ever since the MBO almost four years ago now - you may have heard them too…?”
TVNZ political editor role
Several well-known names keep rising to the top of the list to fill one of the most important roles in New Zealand journalism - the TVNZ political editorship.
With Jessica Mutch McKay moving to a new corporate gig at ANZ last month, the role has been advertised and applications are now closed.
Sadly for potential, soon-to-be-redundant Newshub staff, they have missed an opportunity.
Media Insider understands a first round of interviews has been completed. A second round is under way today.
Early on, a range of names were being floated as possible contenders.
It is understood TVNZ bosses were particularly keen to see Q+A host Jack Tame in the mix, but this has not happened.
Other names that have been linked to the role have been deputy political editor Maiki Sherman and Auckland-based business reporter Katie Bradford.
Some happy news
In what has been a truly awful week for media, some happy news - a former top TVNZ leader has been announced today as the inaugural Independent Media Agencies New Zealand (IMANZ) general manager.
Kath Mitchell, former trade marketing general manager at TVNZ, was one of several senior casualties in a recent round of cost-cutting at the state broadcaster - not unexpectedly she has quickly ended up with another big role in the industry.
Before her 10 years with TVNZ, Mitchell held senior marketing/partnership roles with Yellow, American Express and Air New Zealand.
She says she’s looking forward to advocating for independent agencies.
“This is a fantastic time to be stepping into a role championing the value of Aotearoa’s independent media agencies,” says Mitchell. “The appetite for Kiwi-owned expertise has never been stronger, and the depth of talent across our member base is exceptional.
“I’m looking forward to ensuring our more than 30 member agencies, and valued technology and media partners, feel strongly supported and ensuring advertisers have greater appreciation of the value of an independent perspective.”
Mitchell’s role will see her overseeing the running and growth of IMANZ, established last year.
“Kath’s real superpower is her exceptional relationship management skills and her infectious enthusiasm that has made her a well-regarded leader within our industry,” says IMANZ chair and co-founder of independent media agency D3, Alex Radford.
“Her deep understanding of the media landscape, combined with a formidable commitment to innovation and collaboration, positions her perfectly to lead IMANZ into its next chapter.”
And a top award...
DDB Group Aotearoa has won the coveted Campaign Brief New Zealand Agency of the Year Award, for the seventh time.
The award - selected by publishers of Campaign Brief magazine - recognises an agency’s business performance and creative work delivered for clients in 2023.
Almost 50 agencies contest the award. DDB last won in 2021.
Campaign Brief publisher Michael Lynch said: “It’s been a year of highs for DDB Group Aotearoa, an agency laser-focus on delivering big, powerful creative ideas. Winning major awards, clocking up enviable new business wins and hiring some of the region’s most talented people hasn’t gone unnoticed...”
DDB Group Aotearoa chief executive Priya Patel and group chief creative officer Matty Burton were delighted.
“I’m really proud of everyone in the building, how they show up, how we manage to just take problems or potential opportunities and turn them into something interesting,” said Burton.
More to come...
It’s been one of our industry’s biggest and saddest weeks, and there will be more Media Insider content this weekend, across nzherald.co.nz
This column was updated after publication to change the word audience to traffic.
Editor-at-Large Shayne Currie is one of New Zealand’s most experienced senior journalists and media leaders. He has held executive and senior editorial roles at NZME including Managing Editor, NZ Herald Editor and Herald on Sunday Editor and has a small shareholding in NZME.
