One of the great New Zealand pastimes is facing up to a digital future.
One of the great New Zealand pastimes is facing up to a digital future.
The uncertain future of traditional television broadcasting has been raised in a briefing document to new Media and Communications Minister Melissa Lee.
“As the sector transitions online, companies will be required to consider the viability of ongoing investment in analogue broadcasting infrastructure,” says the Ministry for Culture and Heritage briefingdocument, released today.
“It is likely that the Freeview chief executives [from TVNZ, Warner Bros Discovery, RNZ and Whakaata Māori] will raise the future of traditional TV broadcasting with you. TV broadcasters pay a fee to Kordia (a Government-owned firm), and the costs are increasingly unsustainable as competition increases from global streaming companies.
“The ongoing transition away from legacy transmission infrastructure continues to require careful management. Analogue radio and TV broadcasting still contribute to New Zealand’s resilience during natural disasters and towards equity of access for geographically isolated New Zealanders.”
The document outlines the sector’s big shift to digital - TVNZ is investing heavily in a new streaming platform - but also details the impact that the likes of global tech giants such as Facebook, Google and Netflix have on the industry.
“Digital products provide only a fraction of the revenue previously provided by traditional operating models. At the same time, the expense of maintaining those traditional models means broadcasters are now facing the prospect of switching off TV and radio AM services and moving exclusively to online streaming.
“There are opportunities to support both sector innovation and greater audience choice. The media and content production sectors are aware of the need to find funding from sources other than government and are strong supporters of creating a more modern and streamlined system that encourages more effective investment.”
The briefing document paints a sobering picture of the New Zealand media industry’s financial challenges, citing TVNZ’s drop in profits from $59.2 million in 2020/21 to $1.7m in 2022/23 and a forecast loss of $15.6m this financial year.
It also outlines heavy losses for MediaWorks and Warner Bros. Discovery and NZME’s drop in profit in 2022. A line about another company has been redacted.
TVNZ newsreader Simon Dallow.
Newshub newsreaders Samantha Hayes and Mike McRoberts. Photo / Getty Images
The briefing document, written in late November, recommends meetings with major industry players including NZME, Stuff, Warner Bros. Discovery, Sky TV, Freeview, the News Publishers Association and the Radio Broadcasters Association.
Most of these meetings have taken place.
The ministry says it has preliminary work under way to modernise the regulatory system for media.
A primary focus is the 30-year-old Broadcasting Act.
TVNZ and other broadcasters are known to be irked by historical legislation that prevents Sunday morning advertising.
The document says: “Inconsistent regulation across platforms has wider impacts beyond market distortion.
“For example, TVNZ has advised that these rules discourage it from bidding for rights to international sporting events such as Rugby World Cups, which may be limiting audience access to events of national significance.
“New Zealand’s funding entities and broadcasters support modernisation of the act.”
Damian McKenzie in action at last year's Rugby World Cup, for which Sky had the live TV rights. Photo / Photosport
The document says artificial intelligence, copyright and intellectual property issues are creating “opportunities and challenges”.
“Media companies are calling for more work to be done on intellectual property issues to ensure our copyright regime remains fit for purpose in the context of a rapidly changing technological environment. This environment is impacting the way we create, distribute and consume content.”
The ministry cites the previous Government’s Fair Digital News Bargaining Bill as a “mechanism to encourage sustainable investment in local online news”.
The bill - which would force the likes of Google and Meta (Facebook) to the table to negotiate with media companies, or otherwise pay for news - faces an uncertain future under the new coalition Government.
Sources have previously said that National has softened its view on the bill that’s before the select committee, although it may well want changes.
Through a spokesman, Lee told Media Insider in December: “After considering the best way forward to address any concerns, changes and impacts on stakeholders who have already submitted, the minister has confirmed to the leader of the House to recommend that the Fair Digital News Bargaining Bill remain re-instated for the purposes of select committee processes.
“This does not preclude the minister deciding to discharge the bill after considering the findings and any recommendations of the select committee in charge.”
Meanwhile, the ministry says it’s considering options to encourage more private and international investment into local media content.
“Advocates for regulatory intervention (including sector organisations such as the Screen Production and Development Association) highlight that most of the global streamers that are popular with New Zealand audiences have almost no locally produced content in their catalogues.
“In October 2023, a manual scan showed Netflix had only six New Zealand titles in its catalogue, half of which are more than 5 years old. Disney had none. Neon, Sky’s New Zealand streaming platform, carried 54 home-grown titles, making up 4 per cent of its catalogue.
“By comparison in Australia in the 2021/22 financial year, streaming companies (Amazon Prime Video, Disney, Netflix and Stan) spent $335.1m on acquiring, producing or investing in 718 Australian programmes.
“This kind of investment provides a significant boost to the Australian media production sector as well as assisting local content to reach Australian and global audiences.
“In New Zealand’s context, it could enable potential savings to government by reducing reliance on content funding (which constitutes the significant majority of portfolio spend).”
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.
