Newstalk ZB breakfast host Mike Hosking. Photo / NZME
OPINION
Commercial radio is listened to by around 3.4 million New Zealanders every week but is facing a threat to its sustainability, thanks to the impacts of our largely unregulated global competitors like Meta and Google.
Some estimate they take a majority of the $2 billion in digital advertising from the total annual advertising pie in New Zealand which sits at about $3.4b.
Would it matter if your car radio dial was empty tomorrow morning when you turned it on?
Would it matter if there was no Newstalk ZB, no Breeze, no Radio Rhema, no bFM in Auckland or no 1XX in Whakatane?
I hope you said yes, although I know there will be some people who say no, like the 50-something guy in Auckland last year who wrote, “Don’t swipe right if you are a drama queen or like commercial radio” on his Bumble profile.
I got into radio by accident. I finished a marketing degree at Massey University in 1987. Energy FM was starting in New Plymouth and what was meant to be a fun holiday job, turned into a career thanks to former government minister Steven Joyce, one of the station’s founders.
I quickly learned radio wasn’t all fun and games.
In my first year, the country was hit by Cyclone Bola. I remember walking to work at 5am down Liardet St in New Plymouth and being blown into a building wall. We spent the next 48 hours living and broadcasting from the radio station trying to get information to people in Taranaki to help them stay safe and know what to do. Radio has always done whatever it needs to for its audiences. It was true then and is still true today.
In the recent weather events that hit so much of the country, Tairawhiti was without power or internet connection for days. Nationwide radio networks all covered the storms and terrible impacts across the country.
MediaWorks didn’t know if its local station, More FM Gisborne, was still on air as they had no contact for days. They assumed the worst, but when they chartered a plane to get in and get the station back on air, they found the local radio host had been on the radio the whole time.
Literally. He’d been living at the radio station, taking naps every few hours and relying on handwritten, hand-delivered notes from the local civil defence emergency management team to get information to locals. Without information from him and the likes of Radio Ngāti Porou, locals would have been relying on information from the national networks which was nowhere near as specific and comprehensive for the region as what the locals could provide.
All radio stations in New Zealand are providing more of this critical information more often, whether it was in the early days of Covid when the whole country went into lockdown, the many cyclones and storms that have hit us this year or the tsunami threats and earthquakes that shake the country on an all-too-regular basis.
We used to do this sort of thing once every year or two. Now we do it multiple times annually. It impacts the major centres but especially the regions.
Every 24 hours, the networks and local radio stations across the country are broadcasting emergency management updates that have an airtime rate card value of more than $1 million and that does not include any of the news coverage.
In the last three years alone, I would estimate the commercial radio industry has given well in advance of $50m in airtime for emergency broadcast events.
Unlike Radio New Zealand which is an official lifeline utility, commercial radio stations have paid for the use of our FM and AM spectrum.
Until the GFC came crashing down on us in 2008, radio was one of the most profitable media platforms in New Zealand.
Around that time we completed our negotiations with the government to pay $96m for the use of our AM and FM frequencies for 20 years, from 2011 to 2031.
At the time we saw signs there would be global competition for news, music and entertainment. The common view was that the threat to revenue would be at a national level not “local” where most radio revenue lies. Unlike many media, radio still has high levels of consumer engagement with more than 3.4 million New Zealanders listening for an average of around 15 and a half hours a week.
While we had tried to negotiate a much lower price, the whole process had already taken 10 years, the government had continually moved the goalposts, we were still very profitable, and we were totally over the fight. We signed and we hoped we’d be rolling in revenue growth for most of the way to 2031.
We fought hard to have payments made annually so that if things changed, we could review the costs. The government put its foot down and said no. Pay up now or we take them to auction.
Alarm bells should have rung loudly for everyone when MediaWorks, who I worked for at the time, along with a few other broadcasters, then had to borrow the money from the government to pay the government. News stories at the time suggest they paid more than 11 per cent interest pa for the loans; there were no favours given.
We had been trying to get the last government to engage on a partial refund and no-cost extension of this spectrum for the past five years. The point they seemed to miss was that it took 10 years to negotiate the last time and the only sticking point then was “how much” we would pay, not “whether” we should pay at all.
As expected some said we paid a fair price at the time and they have to maximise the value of the taxpayers’ assets.
I don’t disagree with that principle, but we argue that due to changes that no one could have foreseen in 2009, it turned out we paid a totally “unfair “price in the government’s favour.
Why so “unfair” you may ask?
Firstly we were made to pay it all upfront, rather than pay it annually, which would have allowed for reviews of the charges when it was obvious to all, that the price paid was so out of line with the new media environment we operate in.
However, the major issue was the “unregulated” arrival of Google and Meta who have taken billions of dollars in advertising revenue in the last few years but have not had to operate in the same regulatory environment as New Zealand media outlets. This situation is unfair, anticompetitive and is killing New Zealand media organisations.
Even now the broadcast legislation we operate under stops New Zealand radio and TV channels from running ads on days like Christmas Day while all the digital channels can. This Christmas will see another couple of million dollars go to the international digital players not your local radio stations.
We are not asking for a handout, we are asking for a “levelling” of the playing field, recognition of the important role New Zealand media organisations play generally and for the significant role commercial radio is now playing in increasing coverage of civil defence emergencies.
People talk about “total” trust in media going down and it’s hard for any one radio station to match the major news outlets like the Herald, Stuff and 1 News but we also know when a Civil Defence crisis happens Newstalk ZB listeners trust Newstalk ZB, More FM Listeners trust More FM, 1XX Whakatane listeners trust 1XX and people turn to the radio stations they listen to every day to find out what’s going on and what they need to do.
How do we prove our point? If we turn off all commercial radio for a day or refuse to do emergency management information to make the point, we’d be hurting ourselves and our listeners, not the government. It’s hard to show our value without hurting those we serve.
Our issues may not have been election issues, but next time you listen to your favourite radio stations, imagine life without them. If these issues are not resolved there will be fewer radio stations in New Zealand and the industry will have to look at how to start to move away from FM and AM before 2031.
We’ve said we are unhappy; we have said we need to be heard. Now we ask the new government to listen and hear what we and our 3.4 million listeners know so well.
Commercial Radio matters. Well at least to everyone except that clown on Bumble I swiped left on.
Jana Rangooni is Independent Chair of the Radio Broadcasters Association of which NZME, which publishes the NZ Herald, is a member.
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