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NEW ZEALAND MEDIA
OWNERSHIP 2019
AUT research center for Journalism,
Media and Democracy (JMAD)
Dr Merja Myllylahti (Lead-author)
Dr Sarah Baker (Co-author)
Date 05/12/2019
1
ABOUT THIS REPORT
This report is part of an ongoing series of reports on New Zealand media ownership.
Since 2011, AUT research center for Journalism, Media and Democracy (JMAD) has
published reports which document and analyse developments within New Zealand
media. These incorporate media ownership, market structures, and key events
during each year. The reports are freely available and accessible to anyone via the
JMAD research center: https://www.aut.ac.nz/study/study-options/communication-
studies/research/journalism,-media-and-democracy-research-centre
Recommended citation: Myllylahti, M. & Baker, S. (2019). JMAD New Zealand media
ownership report 2019. Auckland: AUT research center for Journalism, Media and
Democracy. Retrieved from https://www.aut.ac.nz/study/study-options/communication-
studies/research/journalism,-media-and-democracy-research-centre
This report is covered by the Creative Commons Attribution License 4.0
International: When reproducing any part of this report – including tables and graphs –
full attribution must be given to the report author(s).
2
JMAD RESEARCH TEAM
PROFESSOR WAYNE HOPE IS CO-DIRECTOR OF JMAD RESEARCH CENTER. HE IS ALSO CO-
FOUNDER OF THE CENTER WHICH WAS ESTABLISHED IN 2010. HE IS ALSO A RESEARCHER AND
LECTURER AT THE AUT SCHOOL OF COMMUNICATION STUDIES.
DR MERJA MYLLYLAHTI IS CO-DIRECTOR AT JMAD RESEARCH CENTRE, AND LEAD-AUTHOR
OF THE JMAD NEW ZEALAND MEDIA OWNERSHIP REPORT S. SHE IS ALSO A RESEARCHER AND
LECTURER AT THE AUT SCHOOL OF COMMUNICATION STUDIES.
DR SARAH BAKER IS CO-AUTHOR OF JMAD NEW ZEALAND MEDIA OWNERSHIP REPORT. SHE
IS ALSO A RESEARCHER AND SENIOR LECTURER AT THE AUT SCHOOL OF COMMUNICATION
STUDIES.
JULIE CLEAVER IS RESEARCH ASSISTANT AT JMAD. SHE IS ALSO LECTURER AT THE AUT
SCHOOL OF COMMUNICATION STUDIES AND FULL TIME BACHELOR OF LAWS STUDENT .
3
Acknowledgements
This ninth JMAD New Zealand media ownership report is the first co-produced by
the JMAD research team. The report is co-authored by Dr Merja Myllylahti (lead-
author) and Dr Sarah Baker (co-author). JMAD’s research assistance Julie Cleaver
contributed to the 2019 report for the first time by covering the 1. Trends in the
global media section and by assisting otherwise with production. JMAD co-director
Professor Wayne Hope provided his meticulous editing skills.
Together we are stronger, thank you for the team work!
4
Summary
The New Zealand media is facing the biggest changes since the first publication of the
JMAD New Zealand media ownership report in 2011. In 2019, major New Zealand media
organisations were put up for sale, and hundreds of jobs were at risk. In 2019,
MediaWorks was seeking a buyer for its television arm including Three. Furthermore, the
government was considering a fundamental restructure of the public media sector including
TVNZ and RNZ.
In late 2019, MediaWorks was on the verge of becoming partly owned by Australian
Quadrant Private Equity (which bought Australian outdoor advertising company QMS in
October). Earlier, MediaWorks became partly owned by QMS as the two companies merged
their operations. If Quadrant receives the final approvals to buy QMS, MediaWorks will
once more become a 100% private equity owned company. Investment management
company Oaktree Capital still holds 60% of MediaWorks shares.
In November, NZME confirmed that it was in discussion with Australian Nine about
buying Stuff. To this end, NZME had made a proposal to the government about the deal,
but the details were not announced. The outcome of the merger discussions is not yet
known.
During 2019, pay models for news expanded in the search for extra revenue: the NZ Herald
introduced a paywall and other outlets introduced other charges and voluntary payments.
Our analysis shows that the NZ Herald’s paywall is a ‘soft model’ as the majority of the
site’s content continues to be freely accessible. This softness may explain why the NZ
Herald traffic has not been severely affected by the paywall.
New Zealand media ownership - key trends and events
• MediaWorks gains new owner, its TV business is up for sale
• Government-owned media facing a fundamental restructure
• New Zealand Rugby became a substantial shareholder of Sky TV
• The NZ Herald introduced a paywall, other pay models expand
• An influx of streaming services entered the New Zealand market
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Content
Acknowledgements p.3
Summary p.4
1. Trends in global media ownership p.6-15
▪ Global media ownership patterns p.6-10
▪ Global media mergers p.10-13
▪ Trans-Tasman media mergers p.13-15
2. New Zealand media market and structure p.16-56
▪ General structure p.16-21
▪ Print and online news outlets p.21-39
➢ Print market p.21-24
➢ Digital news sites p.24-26
➢ Independents p.26-34
➢ Ethnic media and blogs p.34-39
▪ Television, on demand and streaming p.39-48
➢ Commercial television broadcasters p.39-44
➢ Public interest television p.44-45
➢ Streaming video on demand services p.45-48
▪ Radio broadcasting p.48-53
➢ Commercial radio p.48-51
➢ Public interest radio p.51-53
▪ Platforms p.53-56
3. New Zealand media ownership and patterns p.57-80
➢ Major patterns in ownership p.57-67
➢ NZME p.58-59
➢ Stuff p.60-62
➢ Sky TV p.62-66
➢ MediaWorks p.66-67
▪ Key events and trends p.68-80
➢ MediaWorks facing commercial realities? p.70-76
➢ NZ Herald paywall and other new pay models p.76-80
Conclusion p.81-82
Epilogue: Platform regulation – abandon the carrot approach p.83-85
References p.86-95
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1. Trends in the global media ownership
Global media ownership patterns
In 2019, recent trends in global media ownership continued: media firms continued
to consolidate, private equity firms strengthened their influence in the media sector,
and billionaires continued to add media assets to their portfolios. These ownership
patterns partly reflect the “downward spiral” of newspapers which have long
struggled to make money in the shadow of the internet (Pew Research Centre,
2019). Additionally, China has increased its influence outside China by buying
media companies, and by extending content agreements with news outlets. As
private equity companies strengthen their ownership in the media sector, news
companies have speeded their cost cutting and selling of digital media assets. For
some media companies, consolidation has become a business strategy for survival as
it allows for cost-cutting (Smith, 2019). Verizon offers an example. In 2019, it was
clear that Verizon’s consolidation strategy was backfiring. In recent years, the
company has purchased multiple online platforms, including Yahoo in 2017 for
US$4.5 billion. During 2019, Verizon reduced its workforce by seven percent, and
started to sell its online assets – including Tumblr – which was sold for a low value
of US$3 million (Shieber, 2019). Additionally, in October, Verizon put the HuffPost
on sale (Shieber, 2019). Other digital media outlets including Buzzfeed, Vice and
Vox were also laying off staff (Shieber, 2019). In May, Disney – which owned 21% of
Vice – also wrote down US$353 million of its stake in the company (Rodriguez,
2019).
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As financial difficulties of media companies have continued, private equity
companies have been buying media assets which have lost value and become
relatively cheap to acquire. For example, New Media, which is controlled by the
private equity Fortress Investment Group, has purchased multiple media
companies since it emerged from bankruptcy in 2013. It now owns nearly 150
newspapers across the United States (Smith, 2019). New Media recently purchased
Gannett, which owns USA Today and 11 other brands in the US, for US$1.4bn,
further cementing the prominence of private equity in the media sphere (Smith,
2019). As seen in table 1, in the United States billionaires have amassed a large
portfolio of media holdings. For example, Rupert Murdoch, Michael Bloomberg,
Warren Buffet and Patrick Soon-Shiong have built substantial media holdings.
Amazon’s owner Jeff Bezos owns The Washington Post and Steve Job’s widow
Laurene Powell has a majority stake in The Atlantic magazine. Similarly to the
United States, in the United Kingdom media ownership has continued to
consolidate with five billionaires (including two brothers) owning 80% of all of the
UK media (“5 billionaires own 80% of UK media, stats show”, 2018). These media
owners include Richard Desmond, who owns the Daily Star, Sunday Star, Daily and
Sunday Express; Jonathan Harmsworth, who owns the Daily Mail, the Mail on
Sunday and Metro; Sir David Rowat Barclay and Sir Frederick Hugh Barclay,
owners of The Telegraph, The Spectator and The Business; and Rupert Murdoch,
who owns the Sun, Times, Sky and others (“5 billionaires own 80% of UK media,
stats show”, 2018).
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Table 1: Billionaire media owners in the US in 2019
Billionaire
Main media assets
Michael Bloomberg
Bloomberg LP and
Bloomberg Media
Donald and Samuel "Si"
Newhouse
Advance Publications;
Wired, Vanity Fair, The
New Yorker and Vogue
Cox Family
Cox Enterprises; The
Atlanta Journal-
Constitution
Jeff Bezos (US)
The Washington Post
Patrick Soon-Shiong (US)
Los Angeles Times; San
Diego Union Tribune; 25%
in Tronc
John Henry (US)
Boston Globe
Sheldon Adelson (US)
Las Vegas Review-Journal;
Israel Hayom
Rupert Murdoch (Australia)
Dow Jones Company; The
Wall Street Journal; The
New York Post; The Times;
The Sun; The Australian
Warren Buffet (US)
Omaha World-Herald;
Waco-Tribune Herald;
Richmond Times-Despatch
(roughly 60 newspapers)
Laurene Powell (US)
The Atlantic (a majority
stake)
Marc Benioff and Lynne
Benioff (US)
The Time Magazine
Some news outlets that accommodate investigative, humanitarian and local
journalism have been able to survive through philanthropic donations from private
foundations such as the Bill and Melinda Gates Foundation (Scott et al., 2019).
9
A study by Scott et al. (2019) found that six out of the nine largest not-for-profit
newspapers (including The Guardian and the Thomson Reuters Foundation) relied
“almost entirely” on foundation support. Their study, based on interviews with 74
journalists and foundation representatives, revealed that journalistic autonomy was
not necessarily at risk in these organisations as the foundations aimed to avoid
impressions of them influencing media coverage (Scott et al., 2019).
Meanwhile, China has increased its efforts to influence global media coverage.
According to a Guardian investigation, China has been taking advantage of the
financial difficulties of global news organisations as a part of a “worldwide
propaganda campaign” (Lim & Bergin, 2018). China has expanded its influence in
Africa as well as Western markets by offering cash-strapped journalists “generous
remuneration [packages] and new opportunities” (Lim & Bergin, 2018). Thus, when
China’s state broadcaster China Global Television Network (CGTN) launched its
hub in London, it received over 6,000 applications for 90 journalism jobs “reporting
news from a Chinese perspective” (Lim & Bergin, 2018). Lim & Bergin further
observe that China is “trying to reshape the global information environment with
massive infusions of money – funding paid-for advertorials, sponsored journalistic
coverage and heavily massaged positive messages from boosters” (Lim & Bergin,
2018). Additionally, China’s state-run news agency Xinhua has built a substantial
audience by selling stories to newspapers around the world. The state-run English-
language newspaper China Daily also deals with foreign newspapers such as The
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New York Times, the Wall Street Journal, the Washington Post and The Telegraph
(UK) (Lim & Bergin, 2018).
Global media mergers
In 2019, ownership convergence in the global media market continued, especially in
the broadcasting sector, leading some analysts to forecast a “second wave” of media
consolidation (Fontanella-Khan & Nicolaou, 2019a). During 2019, Disney finalised
its merger with 21st Century Fox; CBS and Viacom agreed to merge; Nexstar bought
Tribune Media; and New Media acquired Gannett. Additionally, Vox bought The
New Yorker magazine. The combined value of these deals exceeded US$100 billion,
as seen in table 2. For the media companies, the driving force behind mergers in the
broadcasting sector was the necessity of competing with streaming services such as
Netflix, and the need to build large banks of original film and television content to
compete with them (PwC, 2019). PwC estimates that streaming video-on-demand
platforms will continue to grow in popularity, predicting that in the United States
alone revenue from streaming services will increase from US$32.8 billion in 2018 to
US$72.8 billion in 2023 (PwC, 2019).
Deloitte’s 2019 Media and Entertainment Industry Outlook report observes that
media industry mergers and acquisitions will continue as long as “media companies
attempt to strengthen their content libraries, quality, distribution, and value” (p.5).
For example, Disney has recently purchased multiple brands, and its Disney+ will
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host content from Disney, Pixar, Marvel, Star Wars, National Geographic and more
(Smith, 2019).
In February 2019, the merger between AT&T and Time Warner was cleared as
AT&T successfully challenged the United States Department of Justice which had
tried to block the US$85.4 billion merger (Bartz & Shepardson, 2019). All three
judges who heard the case ruled unanimously in favour of the acquisition (Bartz &
Shepardson, 2019). Reuters’ reporters Bartz and Shepardson (2019) called the deal
a “turning point for a media industry that has been upended by companies like
Netflix Inc and Alphabet Inc’s Google that put content online with no need for a
cable subscription” (Bartz & Shepardson, 2019).
In March 2019, The Walt Disney Company acquired 21st Century Fox and all of its
subsidiaries (United States Securities and Exchange Commission, 2019). After the
deal with 21st Century Fox, Disney owns media assets such as 20th Century Fox,
Fox Searchlight Pictures, Fox 2000 Pictures, Fox Family and Fox Animation; Fox’s
televisions creative units, Twentieth Century Fox Television, FX Productions and
Fox21; FX Networks; National Geographic Partners; Fox Networks Group
International; Star India; and Fox’s interests in Hulu, Tata Sky and Endemol Shine
Group (The Walt Disney Company, 2019).
The value of the deal was approximately US$71 billion (United States Securities
and Exchange Commission, 2019). The merger of two companies added to Disney’s
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global dominance in ownership of media content. The Financial Times notes that
Disney has become the “apex predator of the entertainment industry” as in the past
10 years it has bought multiple major television and film brands, including
Lucasfilm and Marvel Entertainment (Leigh, 2019).
In August 2019, CBS and Viacom agreed to merge after years of discussions
(previously, the two companies were part of the same entity until they went
separate ways in 2006). The new company ViacomCBS has a combined revenue of
US$28bn (Fontanella-Khan & Nicolaou, 2019a). As Netflix and Disney/Fox
dominate large portions of the entertainment market, the two companies agreed to
re-join to stay competitive (Fontanella-Khan &Nicolaou, 2019a).
Additionally, in September, the Federal Communications Commission (FCC)
approved Nexstar’s US$4.1 billion takeover of Tribune Media’s television assets
(Littleton, 2019). Once Nexstar purchased 42 of Tribune Media’s local television
stations, it became the largest such owner in the United States with “more than 200
outlets serving a wide swath of the country” (Littleton, 2019).
The 2019 mega deals in the media markets did not just involve broadcasting,
entertainment and telecom companies, they also extended to the newspaper
industry. As mentioned, New Media Investment Group confirmed that it would
acquire Gannett for US$1.4 billion (Fontanella-Khan & Nicolaou, 2019b). The
merged company will be one of the largest newspaper companies in the United
States as it “will bring under one roof 263 daily media organisations across 47
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states and the US Pacific island territory of Guam” (Fontanella-Khan & Nicolaou,
2019b). According to media analyst Ken Doctor, the merger means that one of six
newspapers in the United States will be owned by one company (Fontanella-Khan &
Nicolaou, 2019b). Further, in September, Vox Media announced it would purchase
New York Media which owns the New Yorker Magazine (Perper, 2019).
Table 2: Major bids & deals in the media sector in 2019
Bidder
Target
Deal value/
US$ billion
New Media
Investment Group
(GateHouse Media)
Gannett
$1.4 billion
Disney
Fox 21st Century
$71 billion
Nexstar
Tribune
$4.1 billion
CBS
Viacom
$30 billion
Sources: New Media Investment Group, The Walt Disney Co., Nexstar, CBS
Trans-Tasman media mergers
In 2017, the Australian government abolished media ownership rules which had
prevented further concentration in the sector. As a consequence, there has been a
wave of consolidation (as well as some disposals) in the Australian media sector.
The new rules mean that a single media organisation can own all kinds of media
assets in any given city, including television, newspapers and radio holdings.
According to media scholar Johan Lidberg (2019), Australia has one of the most
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concentrated media markets in the world as four media companies – News Corp
Australia, Nine Entertainment, Seven West Media and APN News – take 90% of all
the media revenue in the country (Lidberg, 2019).
In October, Australian free-to-air television broadcaster Seven West Media
announced that it was buying smaller competitor Prime Media Group for A$64
million to gain viewers and advertising revenue (Ashok, 2019). If the bid passes
regulatory hurdles and gains shareholders’ approval, Seven West’s current
shareholders will own 90% of the new company with Prime shareholders owning the
rest, 10% of the company (Ashok, 2019). In October, Prime’s board was “backing the
offer in the absence of a superior bid” (Ashok, 2019).
Shortly after (in October) private equity firm Quadrant announced that it had made
a A$420 million bid for Australian outdoor advertising company QMS which owns
40% of MediaWorks (Kruger, 2019). QMS chairman Wayne Stevenson said that “the
board believes this offer allows QMS shareholders to realise significant value for
their shares” (Kruger, 2019). In September, QMS finalised its merger with
MediaWorks which cost the latter A$38 million (QMS, 2018). The combined
company became the “largest multi-media advertising group in the country [New
Zealand]” (QMS, 2018). As a part of the deal QMS received a 40% shareholding in
MediaWorks while Oaktree Capital Management retained 60% ownership (QMS,
2018).
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In August, Stuff’s owner Nine Entertainment acquired a 45.5% stake in Macquarie
Media, giving it 90% shareholding in the business. Nine stated that after obtaining
90% of the shares, it would purchase the remaining 10% of the company (Nine,
2019a). The share deal was valued at A$113.9 million (Nine, 2019a). Macquarie
owns several radio stations across Australia, and purports to reach a broadcast
audience of two million Australians per week (Macquarie Media Limited, 2019).
Before the acquisition, in April, Nine sold approximately 160 of its regional
newspapers for A$115 million (Meade, 2019). Chief executive Hugh Marks said that
the selloff was part of the company’s strategy of exiting “non-core businesses” and
focusing on Nine’s digital platforms (Ryan & Davis, 2019). The purchasers of this
cluster of regional papers, Australian Community Media, were former Fairfax
executive Antony Catalano and billionaire investor Alex Waislitz (Meade, 2019).
After the purchase, Catalano lobbied for the Australian government to change
merger rules as he contemplated merging his business with other regional brands
as a response to the country’s regional newspaper “crisis” (Duke, 2019).
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2. New Zealand media ownership and market structure
General structure
In October 2019, journalism academic Mel Bunce at City, London University,
assessed that “journalism’s economic crisis has hit New Zealand journalism
particularly hard” (Bunce, 2019, p.9). She argued that because New Zealand spends
considerably less money on the public media than countries such as Australia and
Canada, it “means less journalism [is] protected from economic shocks” (Bunce,
2019, p.9). In 2019, the financial vulnerability of New Zealand media companies
was on full display; commercial broadcasters made losses, and multiple news
companies – TVNZ, Sky TV, NZME – were unable to pay dividends to their
shareholders.
There were major changes in media ownership patterns and market structures as
commercial broadcasters either engaged in expansion, or planned divestments. New
streaming services flooded the New Zealand market, adding to the commercial
broadcasters’ financial woes. In its financial year 2019 presentation, Stuff’s owner
Nine listed the company as a “discontinued, held for sale” asset (Nine, 2019b). In
August, the prospect of a NZME-Stuff merger re-emerged after The Australian
claimed that NZME had renewed its interest in such a deal (Murphy, 2019a). At the
time, Stuff chief executive Sinead Boucher declared that the merger “isn't on our
agenda at all" (Murphy, 2019a). Back in 2017, the Commerce Commission had
rejected the attempt to merge NZME and Stuff because the deal would have
17
reduced media voices and plurality. However, in November NMZE confirmed that it
was in discussions with Nine to buy Stuff, emphasising that “there can be no
certainty at this stage that these discussions will result in any transaction” (NZME,
2019e). NZME also said that it had put a proposal to the government “regarding a
possible transaction” (NZME, 2019e). According to Stuff, NZME had put to the
government a proposal for a “Kiwishare arrangement” which had been used by the
Crown in 1990 to protect free calls and fixed phone line rentals when Telecom NZ
was privatised (Malpass & Watkins, 2019). Malpass and Watkins (2019) state that
this arrangement could “ringfence Stuff's editorial operations and protect local
journalism”, and it would answer to the Commerce Commissions concerns raised in
2017.
MediaWorks is a privately held television and radio broadcaster, headquartered in
Auckland. Its main assets include television channel Three, Newshub and half of
New Zealand’s commercial radio network. In 2019, it merged its assets with QMS
New Zealand, owned by Australian outdoor advertising company QMS. As stated
above, QMS then gained 40% of MediaWorks shares while funds managed by
Oaktree Capital kept a majority 60% shareholding (MediaWorks, 2019a). QMS is a
stock market listed company (ASX), but Oaktree Capital is a privately held
investment management company. In October, MediaWorks announced that it was
seeking a buyer for its television operations. Shortly afterward, MediaWorks head
of news Hal Crawford announced that he was leaving the company in February
2020.
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Sky TV, is a publicly owned company, listed on the New Zealand stock exchange
(NZX), and is headquartered in Auckland. The company broadcasts live sports and
offers pay television services via its platform and Igloo, and if offers subscription
video-on-demand services. In October, Sky TV secured broadcasting rights with the
New Zealand, Australian, South African and Argentinian Rugby Unions until 2025.
As a part of the deal New Zealand Rugby (NZR) became a 5% shareholder in the
company. In a press release, Sky TV stated that “the deeper partnership between
NZR and Sky cements the shared commitment to nurture and grow the game in
New Zealand at all levels” (Sky TV, 2019a). The rights fees were not published, but
Sky TV stated that “the rugby rights have materially increased from our current
arrangements. Now that Sky has greater certainty on other key rights, it is working
the details into its revised forecasts. This was said to advance its revenue and
profits (Sky TV, 2019a).
In August 2019, the company bought RugbyPass from the US-based private
investment firm Cooper & Company for NZ$62 million dollars (Sky TV, 2019b).
RugbyPass “broadcasts live in 63 countries and is the largest publisher of Rugby
content in the world… reaching over 40 million people a month” (Sky TV, 2019b).
There were no other major changes in the main media market structures and
ownership. The number of publicly owned, commercial media companies remained
the same as in 2018, and these included NZME, Stuff Limited and Sky TV.
MediaWorks became partly owned by corporate entity QMS and its shareholders.
Outside of MediaWorks, the number of privately and independently owned media
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outlets remained the same. These included Allied Press, Bauer Media,
BusinessDesk, Crux, MediaWorks, NBR, Newsroom, The Spinoff and Scoop. Of
these, independently owned BusinessDesk gained a new major owner. In 2019,
there were three Crown-owned companies: TVNZ, RNZ and Māori Television.
NZME is a publicly owned company, headquartered in Auckland. The company is
listed on the New Zealand (NZX) and Australian stock market (ASX). NZME’s main
brands include the NZ Herald and Newstalk ZB. Additionally, the media company
owns a group buying site GrabOne; an online job advertising platform YUDU; a
property portal OneRoof; and the car and motoring website Driven. According to
NZME, in the first half of 2019, it had a total monthly audience of 3.3 million New
Zealanders – the NZ Herald had a daily brand audience of 1,098,000, and an
average readership per issue of 477,000 (NZME, 2019a).
Stuff, also headquartered in Auckland, is owned by Nine Entertainment which is a
public company listed on Australian stock exchange (ASX). Stuff’s main brands
include Stuff (website); newspapers The Dominion Post and the Press; neighborhood
and community website Neighbourly; broadband company Stuff Fiber, pay-per-view
streaming service Stuff Pix, Play Stuff, and online job search site Adzuna. In 2019,
stuff.co.nz had a unique audience of 1.94 million (Stuff, 2019a).
Māori Television, funded by the government, is New Zealand’s indigenous
broadcaster, providing a wide range of local and international programs for
audiences across the country and online.
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Table 3: Major communication companies in New Zealand in 2019
Company
Ownership
Funding
Most important assets
Allied press
Private
Commercial
The Otago Daily Times
Bauer Media
Private
Commercial
Metro, The Listener
BusinessDesk
Private
Commercial
BusinessDesk
Crux
Trust
Community
Crux
Stuff
Public,
shareholders
Commercial
The Dominion Post, The
Press, Stuff, Neighbourly
MediaWorks
Private
Commercial
TV3, 3NOW On Demand,
The Edge, Magic, The
Breeze
Māori TV
Crown owned
Public
Māori Television Channel,
Te Reo Channel
NBR
Private
Commercial
The National Business
Review
Newsroom
Private
Commercial
Newsroom.co.nz,
Newsroom Pro
NZME
Public,
shareholders
Commercial
The New Zealand Herald,
The Radio Network
RNZ
Crown owned
Public
RNZ National
Sky TV
Public,
shareholders
Commercial
Sky TV, My Sky, Prime,
Igloo, Neon, Fan Pass
TVNZ
Crown
Commercial
TV ONE, TV2, Ondemand,
ONENews.co.nz
Scoop
Foundation
Commercial
scoop.co.nz
The Spinoff
Private
Commercial
The Spinoff
Spark
Public,
shareholders
Commercial
Lightbox, Spark Sport
21
RNZ is Crown-owned, and the only advertising-free, public interest broadcaster in
New Zealand. Its operations are funded through NZ on Air and the Ministry for
Culture and Heritage.
TVNZ is Crown-owned, but it is commercially funded with no public service
obligation. Approximately 95 percent of its operations are funded by advertising,
and its primary mandate is to pay a dividend to the New Zealand government.
Bauer Media is a privately-owned, global media conglomerate, headquartered in
Germany. Approximately 85 percent of its shares are owned by Bauer family
member Yvonne Bauer. The company owns over 600 magazines, 400 digital media
outlets, and over 100 radio and television stations.
Print and online news outlets
Print
In 2019, Stuff and NZME maintained their duopoly in print and online markets (as
seen in tables 4 and 5). In November, The Guardian confirmed that it had hired its
first full-time reporter in New Zealand, and that the paper would have a dedicated
New Zealand section on its home page (Greive, 2019a). A spokesperson for The
Guardian commented that “we are going to increase the number of stories that we
do – that means more news, commentary and features on the subjects we already
know New Zealanders care about” (Greive, 2019a). Otherwise, local news reporting
received temporary relief from the Local Democracy Reporting pilot program,
22
launched by RNZ, NZ On Air and the Newspaper Publishers Association (NPA). The
NZ$1 million pilot, funded from the RNZ & NZ on Air Innovation Fund, runs only
for one year, and there is no guarantee that the program will continue in the future
(NZ On Air, 2019a). The launch was controversial because it allowed existing
newspapers – which were culling local reporters in 2018 – to fund reporters around
the country. Additionally, the programme does not extend to digital media outlets
such as Crux, Newsroom and The Spinoff. Veteran political journalist, Richard
Harman, who runs the Politik website, said that the scheme “smells more like a
subsidy for struggling companies” (Peacock, 2019a). However, NZ On Air executive
Jane Wrightson said that the pilot was established “to ensure public media funding
addresses gaps in the market” (NZ On Air, 2019a). The reporters will only cover
news related to local institutions such as councils, community boards, council-
owned businesses, trusts and health boards (NZ On Air, 2019a). Of the eight jobs
funded by the pilot, NZME and Stuff have been allocated four positions. Other
reporters will work at the Gisborne Herald/Wairoa Star, Beacon Media Group,
Wairarapa Times-Age and Greymouth Star (NZ On Air, 2019b). During 2019, some
new community papers were established. Ellen Irvine founded Papamoa Post, a
new free monthly newspaper delivered to 10,500+ households; and Rob Drent
launched Rangitoto Observer in Auckland’s North Shore (Sherson, 2019). Drent has
been editor and publisher at the fortnightly Devonport Flagstaff for 22 years.
23
Table 4: Print circulation and print & online readership in 2019
Publication
Print and
online
readership
(12 months
ending
June 2019)
% change
from
previous
year
Circulation
(March
2019)
%change
from the
same time
previous
year
NZ Herald
1885000
4.4.%
104266
-8.3%
The
Dominion
Post
485000
-3.0%
39626
-13.3%
Sunday Star
Times
309000
-23%
63538
-12.99%
The Press
344000
-5.5%
39758
-14.4%
Otago Daily
Times
238000
7.2%
30948
-3.7%
Waikato
Times
250000
23.2%
15489
-12.7%
Hawkes Bay
Today
146000
24.8%
16242
-5.1%
Southland
Times
121000
40.7%
13164
-17.5%
Sunday News
90000
8.4%
12062
-17.1%
Sources: ABC, Roy Morgan Research
During 2019, circulation of the leading print daily newspapers and Sunday papers
continued to decline. As seen in table 4, the year-on-year print circulation of the NZ
Herald fell 8% by the end of March 2019, and The Press and The Dominion Post
continued to lose print subscriptions (ABC, 2019). Circulation of the Sunday News
declined 17% and the Sunday Star’s declined almost 13% from the same time
during the previous year (ABC, 2019). As the print circulation fell, the combined
24
print & online readership of some newspapers rose substantially. As seen in table 4,
this was the case for regional newspapers such as the Southland Times, the Hawkes
Bay Today and the Waikato Times (Roy Morgan, 2019). The combined readership of
the NZ Herald rose 4.4% from the same time in the previous year, but for The Press
and The Dominion Post their combined online and print readership declined (Roy
Morgan, 2019).
During 2019, both NZME and Stuff saw their profit and revenue shrink. In the first
six months of the 2019 financial year, NZME’s net profit declined 73 percent to
NZ$900,000, and its revenue fell four percent to NZ$181 million compared to the
same time in the previous year (NZME, 2019a). For the financial year 2019, Stuff’s
operating profit fell to NZ$30 million, and total revenue declined 10% to NZ$261
million (Nine, 2019c).
Digital news sites
In 2019, most of the general news and media sites in New Zealand could be freely
accessed. However, at the end of April 2019, the NZ Herald introduced digital
subscriptions – a paywall – for its premium content, limiting the public’s access to
all of its content. Additionally, other media outlets such as The Spinoff and Scoop
launched new pay systems to support their journalism (these are further analysed
later in this report).
25
In 2019, Stuff and the NZ Herald continued to dominate audience share in online
news. According to Roy Morgan, the NZ Herald had 1,545,000 online readers and
The Dominion Post and The Press 498,000 online readers (Roy Morgan, 2019). In
September, the Stuff website had just over 34 million unique visits compared to the
NZ Herald’s 26 million (as seen in table 5). The combined number of visits to the NZ
Herald and Stuff websites was 60 million compared to the combined visits of 17.6
million for Newsroom, Newshub, RNZ, The Spinoff and TVNZ. The two dominant
news websites had almost 3.5 times more visits than the other five news outlets put
together.
Table 5: Unique audience and total visits in 2019
Website
SimilarWeb: Total
visits from desktop
and mobile (millions)–
September 20191
Newsroom
0.56
Newshub
5.1
New Zealand Herald
26.2
RNZ
3.5
Stuff
34.3
The Spinoff
1.0
TVNZ
7.4
Source: SimilarWeb, 2019
1
Total visits is the sum of all visits to the domain, within a country and time period analysed.
SimilarWeb calculates a visit for the website if the visitor accesses one or more pages (SimilarWeb,
n.d.)
26
Another noteworthy digital news site in New Zealand includes interest.co.nz, which
is a privately-owned digital media company, owned by the limited company JDJL
Limited. It provides financial news and commentary as well as analysis about
interest-rate related products and services. The site’s managing editor is Gareth
Vaughan and it has five other reporters and editors. Another niche media company
is The Health Media, which runs the nzdoctor.co.nz website. Also worth mentioning
is Politik; a subscription-based website run by experienced political journalist
Richard Harman. The public can read three stories a month for free after which the
readers are required to pay $15.50 a month for content.
Independents
In 2019, New Zealand continued to have a number of independently-owned media
outlets of which most delivered content digitally. Independent digital media outlet
Scoop celebrated its 20th birthday, The Spinoff its 5th birthday, and digital-only
Newsroom its 2nd birthday. Wellington-based BusinessDesk gained a major new
owner. Independent media outlets provided at least some news and current affairs
content, and many of them introduced new pay models to support their journalism.
The independents included:
• Allied Press, a regional newspaper group
• Asia Pacific Report, an independent news site
• BusinessDesk, a business, economics and politics newswire
• Crux, a non-profit local digital-only news site
• National Business Review, a financial newspaper group
• Newsroom, a digital-only news site
• Scoop, an independent digital-only website
• The Spinoff, a digital-only media site
27
Allied Press is an independent, Otago-based media company, which employs more
than 400 people. It is owned by Sir Julian Smith and his family. The company’s
leading newspaper the Otago Daily Times, odt.co.nz, was founded in 1861. In 2016,
the company announced that it would launch a paywall for the Otago Daily Times,
but this has yet to materialise. According to Allied Press, the Otago Daily Times has
an 89,000 average issue readership, 78,000 unique users per day and 50,821
Facebook followers (Allied Press, 2019).
The publisher holds a majority interest in the Greymouth Evening Star and has a
range of community and farming newspapers throughout the South Island
including North Canterbury News, The Ashburton Courier, The Timaru Courier, The
Oamaru Mail, The News, The Mountain Scene, The Star and The Ensign. In 2018,
the company bought the 124-year-old community paper Clutha Leader from Stuff.
Allied Press also owns a television station in Dunedin, Chanel 39, which is the only
local television provider in the area.
Asia Pacific Report news website was launched by the AUT’s Pacific Media
Center in 2016. It is a joint venture between Multimedia Investments Ltd and
AUT’s Pacific Media Centre. The core of its content is produced by thee
postgraduate students attending the Pacific Media Center’s journalism studies
course at the AUT School of Communication Studies (Asia Pacific Report, 2019).
The students report on issues related to the Asia-Pacific region, ranging from
“climate change and the environment to education and health to politics, media, law
28
social justice and sustainable business” (Asia Pacific Report, 2019). Editor of the
site is AUT Professor David Robie.
BusinessDesk is a Wellington-based independent newswire service, established in
2008. Its ownership structure changed in 2019. In April, Milford Asset Management
co-founder Brian Gaynor took a 40% shareholding in the company (BusinessDesk,
2019). Milford Asset Management is a New Zealand-based investment company
with NZ$7 billion of assets under management. Gaynor has been reducing his
operational involvement at Milford since early 2017, and has written weekly
business columns for the NZ Herald for more than two decades. In a press release,
BusinessDesk noted that Gaynor’s involvement was “a huge vote of confidence in
the importance of a fair, accurate, timely and ‘no fear or favour’ business news
service” (BusinessDesk, 2019). Pattrick Smellie, co-founder of BusinessDesk,
retained a 35% holding in the media outlet and chief reporter Paul
McBeth now owns 25% of the company’s shares. Jonathan Underhill, who co-
founded BusinessDesk with Smellie, sold his shares to Gaynor after taking a media
advisory role in the National Party leader’s office. The BusinessDesk reporting team
includes senior reporters such as Jenny Ruth (former NBR), Rebecca Howard (ex
AP-Dow Jones), Gavin Evans (ex Bloomberg, ex Freeman Media Energy News) and
Victoria Young, (ex NBR). In October 2019, BusinessDesk launched a new website
which offers individuals, groups and corporates subscriptions for the first time.
According to BusinessDesk co-owner Pattrick Smellie, the new website and
subscription structure reflect “a shift from providing solely a wholesale content
29
wire-style service for republication by other news outlets to offering news online
direct to consumers” (Pattrick Smellie, personal communication, October 23, 2019).
BusinessDesk continues to be available as a wire service for republication.
Crux launched in May 2018 as a public interest news site covering Queenstown,
Wanaka and Cromwell. The media outlet says that it is “activating the voices of our
community on fundamental issues such as the airport, a new hospital, growth,
local governance and now, water quality” (Crux, 2019). Its founder and managing
editor is Peter Newport, an experienced New Zealand journalist and television
producer, who has also worked overseas for the BBC, Channels 9 and 10 Australia
and the Discovery Channel. Crux is operated by the not-for-profit Crux Media
Trust, and it has three regular journalists as well as a group of freelancers and
video production partners. The site has gathered “over 140,000 unique users, has
had over 700,000 pages views, and now averages over 60,000 page views month”
since the launch (Peter Newport, personal communication, August 12. 2019).
Additionally, the site has approximately “60,000 engagements on Facebook a
month” (Peter Newport, personal communication, August 12. 2019). Although
Crux’s initial funding has come from local donors, it has “targeted on developing
new community revenue models with a view to eventually becoming community
owned” (Peter Newport, personal communication, August 12. 2019). The site has
received funding from NZ On Air for three major video series: Living in La La Land,
The Developers and Southern Lens.
30
NBR is a business newspaper publisher, and its masthead, the National Business
Review, is mainly published in a digital format. The publisher also has a streaming
video service NBR TV as well as NBR Radio for audio broadcast. The company has
been owned and published by Todd Scott since 2012. During 2018, NBR lost some of
its most experienced journalists. In 2019, the NBR website lists 14 reporters and 3
sub-editors as working for the outlet. Additionally, its team includes an art director,
content and web-producers and a social media coordinator (NBR, 2019a). In
November Newsroom reported that NBR was “reviewing its business with five to six
roles affected as it changes its video product, NBR View” (Murphy & Jennings,
2019a). According to Newsroom, some junior staff jobs were affected along with the
radio broadcaster Grant Walker’s position (Murphy & Jennings, 2019a). According
to NBR’s media kit, in 2019 nbr.co.nz had 102,257 unique users, and NBR had
35,000 email subscribers and “100+ corporate IP company subscribers” (NBR,
2019b). In 2018, NBR had 23,000 email subscribers, 200+ corporate IP (office-wide)
subscriptions and 5,000+ individual subscribers (Myllylahti, 2018a). Based on these
figures, NBR’s corporate subscriptions have declined whereas e-mail subscriptions
have grown. In 2019, it was unclear how many individual subscriptions the
company had.
Newsroom, a digital-only news site, celebrated its second birthday in 2019. The
site has become known for breaking, investigative news stories, and has won
multiple awards for its journalism. It was launched in 2017 by Tim Murphy (former
chief editor of the NZ Herald) and Mark Jennings (former head of news at TV3). It
31
is primarily owned by Murphy and Jennings (with support from private investors).
Additionally, Bernard Hickey owns 12.6%, Melanie Reid 8%, Craig and Selwyn
Pellett 3% and “an early individual investor” 2.5% of the company (Tim Murphy,
personal communication, August 13, 2018).
In July 2019, newsroom.co.nz had a unique audience of 210,000 (Tim Murphy,
personal communication, August 7, 2019). In August 2019, Newsroom had 15
fulltime and five part-time staff members. Additionally, it had three additional
contracted roles and one RNZ secondee working on the RNZ’s The Detail podcast
(Tim Murphy, personal communication, August 7, 2019). In 2019, Newsroom formed
a closer partnership with the public broadcaster RNZ as they launched a joint
podcasting initiative, and a content sharing agreement which means that stories
from both organisations will be published on the other’s site.
Newsroom consists of a freely accessible public site newsroom.co.nz and Newsroom
Pro which is a paid subscription service. It also receives voluntary donations to
support its operations. According to Murphy and Jennings, Newsroom Pro “has
grown rapidly” (Murphy & Jennings, 2019b). Newsroom has also received
“substantial one-off donations” from individuals, and 725 people support the site by
monthly donations, and a handful with annual donations which are paid via the
PressPatron platform (Murphy & Jennings, 2019b). According to the site’s co-
founders, “forging a sustainable business model in these tumultuous times for
media is not for faint-hearted”, Newsroom therefore continues to seek support from
32
donors and sponsors (Murphy & Jennings, 2019b). Currently, its major sponsors
include Kiwibank (banking), Chorus (a telecommunications infrastructure
company), Vodafone Business (telecommunications), Bell Gully (law firm), Ecostore
(consumer goods), Victoria University of Wellington, Auckland University, Otago
University and Beca (engineering and consulting company).
Scoop is an independent, digital-only, and free news website which celebrated its
20th birthday in 2019. It is owned by Scoop Publishing Limited, a social enterprise
wholly-owned by the Scoop Foundation for Public Interest Journalism. The not-for-
profit charitable trust was established in 2015. Scoop is funded by subscriptions,
licensing revenue and crowd-funding. In 2019, it had 265 “subscribers” who paid the
license fee, and it also launched a paid e-mail service to aid funding of its operations
(Cederwall, 2019). Joseph Cederwall, co-editor of Scoop, notes that the media
outlets’ “operating budget will be 100% non-advertising funded by January 2020”,
and this will give the site an “opportunity for the first time in some years to start
expanding the team” (Cederwall, 2019). Scoop’s editorial team includes co-editors
Joseph Cederwall and Ian Llewellyn, Gordon Campbell (political editor) Lyndon
Hood (news editor) Lindsay Shelton (Wellington editor) and Howard Davis (art
editor).
Currently, Scoop reaches “more than 500,000 readers a month” (Scoop, 2019). The
media outlet provides its clients with press releases and articles, and it produces its
own independent journalism as well. The site focuses on publishing “important
33
political and local content rather than clickbait” (Scoop, 2019). Cederwall notes that
“we are at a crucial juncture for the continued thriving of Scoop and independent
online news in New Zealand in general” (Cederwall, 2019). In August 2019, Scoop
launched a new online platform thedig.nz which is a “new public interest, in-depth,
engaged journalism platform” (The Dig, 2019).
The Spinoff, an independent, New Zealand-owned digital-only media outlet,
celebrated its fifth birthday in 2019, and was named as the best New Zealand
website at the Voyager Media Awards. The media outlet considers itself as “a
magazine for the digital age, not always racing to break stories, but striving to
analyse what they mean” (Greive, 2019b). According to the publisher Duncan
Greive, the outlet has “more than 20 staff, over 130,000 followers across various
platforms and millions of views on our stories and shows every day” (Greive, 2019b).
The largest shareholders in the company are Greive and his wife who each hold 44
percent of the company’s shares. The rest are held by Alexandra Casey (senior
writer), Toby Manhire (editor) and Scott Stevenson (senior sportswriter). The site’s
operations are funded by partnerships, including those with Lightbox (Spark),
Kiwibank, Unity Books and Callaghan Innovation, and it also publishes sponsored
content. The site has also gained funding from NZ on Air and Creative New
Zealand. In 2019, The Spinoff launched memberships, and its readers can pay
voluntary donations to support its journalism via PressPatron platform. Greive says
that people can “pay as much as they can afford” (Greive, 2019b). At the start of
August 2019, the site had 1,300 members. Greive states that voluntary reader
34
payments will ensure that its content remains free to all, while enabling the outlet
to “expand into areas which are extremely difficult to fund” (Greive, 2019b).
Ethnic media
During 2019, the objectivity and independence of the Chinese media outlets in New
Zealand was robustly debated. Some New Zealand media companies also collaborate
with Chinese media outlets. In 2016, the NZ Herald launched a new website in
collaboration with the Chinese Herald to attract Chinese readers (Myllylahti,
2018a). Additionally, the NZ Herald has a content partnership with the South
China Morning Post.
An article by Newsroom reporter Laura Walters observed that the executives and
editors of New Zealand’s Chinese-language media had “been attending state-
sponsored conferences in China aimed at getting overseas media to promote the
Chinese Communist Party's policies” (Walters, 2019a). For example, Lili Wang who
is director and shareholder of the Chinese NZ Herald, attended in 2018 to a forum
which was “hosted by state-run media The People's Daily, along with the Hainan
Provincial Committee of the Communist Party of China” (Walters, 2019a). Further,
Stella Hu who is a shareholder of NZC Media Group (which owns Panda TV, Radio
Chinese, Kiwi Style magazine and the Chinese Times) has attended state-sponsored
conferences (Walters, 2019a). Walters notes that “other CCP-friendly media in New
Zealand have been invited to China, on expenses-paid trips. Recently, director and
35
part-owner of Oceania TV, Luis Pang, was photographed with President Xi Jinping
during a trip to China” (Walters, 2019a).
During 2019, relations between New Zealand media outlets and the Chinese
government became somewhat strained. In June, Newsroom reported that it had
been blocked in China as a part of the Chinese government’s “Black Friday
crackdown on foreign media” in response to coverage of the Tiananmen Square
massacre (Jennings, 2019a). The Guardian, the Washington Post, NBC and
HuffPost were among other sites blocked by the Chinese government. Mark
Jennings, co-editor of Newsroom, writes that the news site was most likely added to
the list of banned news sites because it “published a story by New Zealand China
expert, Professor Anne-Marie Brady, who described the massacre as an open sore on
the Chinese body politic” (Jennings, 2019a). On June 10, 2019, Newsroom co-editor
Tim Murphy retweeted Brady’s tweet which stated that the New Zealand media is
not immune to Chinese censorship (Murphy, 2019b).
Chinese NZ Herald is 100% owned by Lili Wang (Myllylahti, 2018). It has a staff
of 27, and is published four times a week with a print circulation of 10,000
(Myllylahti, 2018a). Wang estimates that the paper’s readership is “around 150,000
per week” and that the online site has “more than 13,000 visitors per day on
average” (Myllylahti, 2018a). In an interview Wang said that the paper needs to
“stay neutral as a media company” in order to “build the trust in its content”
(Myllylahti, 2018a). However, in September 2019, a Newsroom article reported that
“experts have identified the Chinese NZ Herald website as a propaganda outlet for
36
the government of China” (Walters, 2019b). However, NZME, co-owner of the news
outlet, said that the Chinese NZ Herald “is not beholden to China’s media
guidelines and censorship requirements” (Walters, 2019). Back in 2017, though,
Professor Brady warned that “in the space of a few years, New Zealand’s Chinese
language mass media has gone from being an independent, localized, ethnic
language medium to an outlet of China’s official messaging” (Myllylahti, 2017).
Brady observed that New Zealand’s Chinese language media platforms had content
co-operation agreements with Xinhua News Service and received their China-
related news from Xinhua which is controlled by the People’s Republic of China
(Myllylahti, 2017).
In addition to the Chinese NZ Herald, there are three main television channels in
Mandarin and Cantonese, multiple print publications, three Freeview stations and
eight subscription channels to keep Chinese audiences informed (Creative NZ, n.d.).
The Multicultural Times is a digital ethnic media outlet, launched in 2018 by
Gaurav Sharma and Eric Chuah (co-founders). It was originally launched in print
and online form, but in 2019 it moved to digital-only as “the reach, engagement and
scope of innovation in the digital space is far superior to print” (The Multicultural
Times, 2019). When the paper was launched, it stated that “Aotearoa has 213 ethnic
groups calling it home, but ethnic communities in New Zealand still feel alienated,
left out, or voiceless". In response, the paper aimed to bring “the ethnic side of
things into mainstream New Zealand” (The Multicultural Times, 2018).
37
Indian Weekender is one of the best known Indian publications in New Zealand,
targeting 120,000 ethnic Indians in Auckland region (Indian Weekender, 2019).
However, the online version of the publication “is increasingly being accessed by
readers in Fiji, Australia, India, the US, the UK, Canada, Singapore and Malaysia
besides other countries” (Indian Weekender, 2019). The publication has
correspondents in India and Fiji. The weekend publication is published by KMG
Interactive and its publisher Bhav Dhillon. Indian Weekender has a circulation of
15,000 print papers, and a readership of 60,000 every week (Indian Weekender,
2019). Otherwise, the Indian population in New Zealand is served by three main
radio stations, seven print publications, one Freeview channel and two subscription
channels (Creative NZ, n.d.).
Maori and Pasifika media includes 21 Iwi stations, multiple print publications
such as Mana magazine, and one Freeview television station, Māori TV, to serve
Māori communities (Creative NZ, n.d.). In October 2014, NZME launched the first
mainstream Māori newspaper Māngai Nui in collaboration with the Rotorua Daily
Post. Pasifika communities are “well catered” with multiple radio stations and five
main print publications, however, there is no Pasifika specific television channel in
New Zealand (Creative NZ, n.d.).
New Zealand also has specific media for Filipino and Korean audiences. There is
one radio station for Filipino communities, one print publication twice monthly and
38
one paid television channel on the Sky platform. Additionally, there are five print
publications for Korean communities and two subscription channels on the Sky
platform.
Blogs
2019 marked the end of an era in the blogosphere when it was announced that the
controversial right-wing blog Whaleoil, “the most notorious publication of the digital
media era in New Zealand has closed down for good” (Braae, 2019). On August 1,
the Whaleoil website announced that the site was closing down, and directed
readers to new destination The BDF (“It’s the end of an era… and start of a new
one”, 2019). In the last post, the site stated that “Whaleoil grew to what we know it
is now, a vibrant community of like-minded people who embrace the freedoms that
liberal Western democracy has given us. We value those freedoms highly” (It’s the
end of an era… and start of a new one”, 2019). It added that the blog was “ so
influential that shadowy forces conspired to take it down and a hacker was paid to
hack it” (“It’s the end of an era… and start of a new one”, 2019). The blog was
started by Cameron Slater in 2005, but came to the end in 2019 after Slater became
unwell, and was burdened by defamation lawsuits and financial troubles. During its
heyday, the blog had a substantial audience and political influence, and Slater was
named as a blogger of the year at the 2014 Canon Media Awards. In the same year,
Nicky Hager’s Dirty Politics revealed “uncomfortable alliances between citizen
media, politicians, PR companies and legacy media” (Myllylahti, 2014). His book
documented how the National Party and PR practitioners used the blog to drive
39
their agendas. As Braae puts it, if the blog would be “remembered for anything, let
it be for making politics a crueler, and more viscerally hateful arena” (Braae, 2019).
In a bittersweet twist, businessman Matt Blomfield who was targeted and defamed
by Slater, bought the website in August 2019 (“Businessman defamed by Cameron
Slater buys Whale Oil website”, 2019). Blomfield said that he wants to remove
harmful content from the website before deciding what to do with it in the future
(“Businessman defamed by Cameron Slater buys Whale Oil website”, 2019).
In 2019, some of the most well-known blogs and blogging platforms included
PublicAddress (which features Russell Brown’s Hard News); Lizzy Marvelly’s
Villainesse; Martyn Bradbury’s The Daily Blog; David Farrar’s Kiwiblog; The
Standard, The Dim-Post, Chris Trotter’s Bowalley Road and Bill Bennett.
Television, on demand and streaming
Commercial television broadcasters
During 2019, it was obvious that commercial television broadcasting in New
Zealand was in trouble as all broadcasters reported losses. The influx of global video
streaming services brought more bad news for the sector which continued to fight
for its financial viability. Before announcing the sale of MediaWorks’s television
arm, CEO Michael Anderson was lobbying hard to make TVNZ 1 commercial-free. If
TVNZ 1 was to become free from advertising, it would immediately boost
MediaWorks’s bottom line, as approximately 95% of the TVNZ’s funding comes from
advertising. Anderson declared that MediaWorks might have to pull completely out
40
of television broadcasting altogether if the government did not address the ‘anti-
competitive’ behaviour of TVNZ 1 (Greive, 2019d). After these threats, it put its
television operations for sale. TVNZ is funded by advertising, and its stated purpose
is to make money, and to pay a dividend to the government. However, in the next
three years, TVNZ is not planning to pay a dividend as it will increase its local
content production (TVNZ, 2019a). In response to MediaWorks’s comments, TVNZ
CEO Kevin Kenrick pointed out that MediaWorks had been losing money for a
decade, and that the whole of New Zealand’s television broadcasting sector was
suffering from the global competition from the companies such as Facebook, Google
and Netflix (Jennings, 2019b). To address challenges by global giants, TVNZ has
decided to increase its local content production – one of the moves that infuriated
MediaWorks. TVNZ plans to invest an additional NZ$20 million per year in local
content as it is "intending to shift from 'international' to 'local'” (Pullar-Strecker,
2019a).
TVNZ operates six television channels including TVNZ 1 and TVNZ 2, and its
flagship news program is 1News. The broadcaster also has live-streaming on TVNZ
1, TVNZ 2 and Duke, and a video streaming service TVNZ OnDemand. For the
financial year ending in June 2019, it reported a 44% drop in its profit from the
previous year to NZ$2.9 million, and it was forecasting a NZ$17 million loss for the
forthcoming financial year (TVNZ, 2019b). In financial year 2019, the company’s
total revenue declined 2.5% from the previous year to NZ$311 million as its
advertising revenue declined. TVNZ announced that it would not pay a dividend to
41
the government, and that it was contemplating becoming a non-profit broadcaster.
While reflecting on the company’s results, CEO Kevin Kenrick said that financial
results for the company were “reflective of challenging market conditions” (TVNZ,
2019b). However, Kenrick stated that its flagship news program1News was
performing well: “the standout achievements for the year have been the stellar
ratings performance of our local news and entertainment content, and the growth in
TVNZ OnDemand” (Anthony, 2019b).
Sky TV broadcasts live sports and offers pay-television services via its own platform
and its brands including Igloo and NEON. Its FanPass offers its users passes to view
premium sports content, and SKYGo enables satellite customers to stream a selection
of Sky’s linear channels and view content on-demand. Additionally, Sky owns free-to-
air TV channel Prime.
Last year, Martin Stewart was appointed as chief executive of Sky TV, and during
his first year at the helm, the company expanded its rugby offerings. In the
financial year ending June 2019, Sky TV made a loss of NZ$670 million after
writing off goodwill. Its revenue was down seven percent from the previous year
(Sky TV, 2019d). Sky TV also suffered from falling subscriber numbers, and in the
financial year 2019 it lost another 42,000 satellite subscribers (Sky TV, 2019c). In
September, the company was consulting with 250 staff members as it planned to cut
the costs and restructure (Pullar-Strecker, 2019b).
42
In August 2019, Sky TV was facing increasing competition from telecom company
Spark and streaming services, and hence acquired an online-streaming platform
RugbyPass which will give Sky TV an audience of 40 million (“Sky TV shares rise
on US$40m RugbyPass acquisition”, 2019). The deal is understandable as Sky TV
lost rights to broadcast the 2019 Rugby World Cup in New Zealand to its fierce
competitor Spark. In October, Sky TV announced several major developments
regarding the company. The company extended its exclusive broadcasting deal with
International Cricket Council for the next four years (Sky TV, 2019c). Shortly
afterward, the company announced that New Zealand Rugby (NZR) and Sky TV had
“agreed a revolutionary new broadcast deal” whereby the former became a
substantial shareholder in Sky TV (Sky TV, 2019d). In October, Sky TV’s
shareholders approved the deal for SANZAAR rugby rights and the equity deal with
NZR (“Sky gets tick of approval for NZR deal from wary shareholders”, 2019). As
RNZ wrote, “it was anticipated the proposal would get shareholders’ approval,
despite the cost of the rights remaining confidential” (“Sky gets tick of approval for
NZR deal from wary shareholders”, 2019). However, some shareholders “raised
concerns that the company was putting all of its eggs in one basket” (“Sky gets tick
of approval for NZR deal from wary shareholders”, 2019).
Spark Sport has added many sports to its line-up including English football,
motorsport, cricket, hockey, and basketball. In March, ahead of the Rugby World
Cup, Spark launched its own streaming service Spark Sport which enables
43
audiences to watch live and on-demand sport. Its live streaming during the Rugby
World Cup angered some customers, and by October, the Commerce Commission
received 31 complaints about the company’s services (Nadkarni, 2019). In October,
the company announced that it had secured New Zealand Cricket rights from April
2020, and that it was partnering with TVNZ to broadcast some matches free to air
(Spark, 2019). Spark chief executive Jolie Hodson said that “streaming is the future
of sports viewing”, and that the latest contract was “another major step towards
Spark’s strategy of building a profitable sports media business” (Spark, 2019).
MediaWorks owns half of the New Zealand’s commercial radio stations. As stated
above, it has now put its television brands up for sale. Its media assets include
Newshub; a multiplatform service covering television, radio and digital news
services and television channel Three. On its website, MediaWorks lists Newshub,
The AM Show (radio), The Project (TV) and Magic under “news and current affairs”
brands, but channel Three (TV) and Three Now (on-demand) are listed under the
music and entertainment brands together with Bravo and entertainment programs.
Freeview is New Zealand's digital terrestrial television platform. It is operated by
a joint venture between the country's major free-to-air broadcasters – government-
owned Television New Zealand and Radio New Zealand, government-subsidised
Māori Television, and the Australian-owned MediaWorks New Zealand.
44
Public interest television
Māori Television, funded by the government, is New Zealand’s indigenous
broadcaster, providing a wide range of local and international programs for
audiences across the country and online. In May 2019, Shane Taurima was
appointed as new chief executive of the company (Māori Television, 2019). Māori
Television board chair Jamie Tuuta commented that Taurima “brings 25 years of
industry experience in radio and television broadcasting at the forefront of Māori
and mainstream media with a passionate commitment to the development of Māori,
te reo and our culture” (Māori Television, 2019). During 2019, Te Puni Kōkiri, the
Ministry of Māori Development, was conducting a review of the Māori media sector,
and how it is positioned for the future. The review found that Māori media receives
“significantly lower budgets to produce content compared to other media” (“Review
reveals 'challenges that Māori media organisations face”, 2019). According to Māori
Development Minister Nanaia Mahuta, Māori media struggled to find the resources
to deliver content to its audiences (“Review reveals 'challenges that Māori media
organisations face”, 2019).
Māori Television attracts, on average, three percent of all media consumers, and ten
percent of Māori media consumers (“Review reveals 'challenges that Māori media
organisations face”, 2019). During 2017-2018, it received funding from three main
sources including $19 million from Vote Māori Development, $16m from Te Mangai
Paho and additional income from advertising. The country's 21 iwi radio stations
each receive $500,000 in annual funding (“Review reveals 'challenges that Māori
45
media organisations face”, 2019). At the time of writing, it was not known how the
future funding of Māori media sector would be organised.
Streaming video on demand services
During 2019, there was an influx of subscription video-on-demand (SVOD) services
in New Zealand, adding to the worries of television broadcasters. Apple and Disney
launched streaming services (Apple TV+ and Disney+), and the UK based Acorn
also entered New Zealand. Additionally, Sky TV and Spark launched new sports
services, and Stuff introduced Play Stuff. In 2019, several other companies were
already offering subscription video-on-demand. These include Amazon’s Prime,
YouTube Prime, Netflix, Lightbox, NEON, Coliseum Sports Media, Vodafone TV
and broadcasters’ video services such as TVNZ OnDemand and 3Now. The
companies offering streaming services in New Zealand are reluctant to publish any
information about streaming numbers. In the last financial year, TVNZ OnDemand
had a “record 184 million video streams” (TVNZ, 2019c). According to media reports,
Spark’s Lightbox has 355,000 subscribers (McBeth, 2019). In the financial year
ending in June 2019, Sky saw its streaming customer base increase from “107,000
to 161,000”, but as Keall points out, the company did not “break out how many of
those were with NEON, and how many with FanPass (or both)” (Keall, 2019).
In August 2019, Stuff launched Play Stuff which is a free online video-on-demand
service. Stuff has partnered with BBC, Reuters, VICE, Red Bull, Bravo New
Zealand, Madman and NZ on Screen as well as others to deliver thousands of titles.
46
In the initial launch catalogue, there are 10,000 titles across a wide range of genres
which cover news, sports, entertainment as well as lifestyle programs (“Stuff
launches Play Stuff, an online video destination free to all”, 2019). It was followed in
September by Acorn TV which streams world-class mysteries, dramas, and comedies
from Britain and beyond. Acorn has around one million paying subscribers for its
mix of British, Canadian and Australian “quality dramas” (Keall, 2019). It is one of
the cheaper streaming services in New Zealand, although some of the programs
are already available on other services.
In November, Apple TV+ and Disney+ were launched to compete with other
streaming services such as Spark’s Lightbox and Sky TV’s NEON in New Zealand.
Apple TV+ offers original programming such as The Morning Show. Globally, Apple
is spending some US$6 billion on original programming, putting it in the same
league as Netflix, HBO and other top streamers and broadcasters. In New Zealand,
Disney+ offers classic Disney films, exclusive Marvel TV shows, a new Star Wars
series and National Geographic documentaries (“Disney announces when streaming
service Disney+ will land in NZ”, 2019).
In October, a survey conducted by HorizonPoll showed that eight out of ten New
Zealand adults were using video-on-demand streaming services (HorizonPoll, 2019).
TVNZ OnDemand was the most popular with 59% of adults accessing it
(HorizonPoll, 2019). TVNZ OnDemand has more people accessing it than Netflix:
“56% of adults in around 935,200 households, say they now have access to Netflix”
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(HorizonPoll, 2019). ThreeNow was accessed by 29% of adults, and Sky TV by
29% of adults (HorizonPoll, 2019).
Table 6: Pricing of streaming services in New Zealand 2019
Company
Pricing per month
Acorn
$7.99
Apple+
$8.99
Amazon Prime Video
$7.20
Disney +
$9.99
Lightbox
$12.99
Netflix
$16.99 (standard)
NEON
$13.95
Play Stuff
Free
Sky Sport Now
$49.99
Spark Sport
$19.99
3Now
Free
TVNZ OnDemand
Free
YouTube Premium
$15.99
Sources: TVNZ, NZ Herald, Spark
Another study found that in 2019, 75% of Kiwis were paying for at least one
streaming service (NZ Compare, 2019). The study notes that the adoption rates for
streaming services “are pretty impressive, even for older age groups” (NZ Compare,
2019). Streaming is more popular in New Zealand than terrestrial television
(approximately 87% of Kiwis aged 25-54 have streamed content) (NZ Compare,
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2019). Older generations were more likely to “stick with using Sky subscription
online” while younger ones were turning to Netflix (NZ Compare, 2019).
Increasing competition in streaming services has also meant fiercer price
competition. While Netflix increased its subscription prices in August, Sky’s NEON
dropped its subscription prices in September to compete with the service, as seen in
table 6. Acorn, Apple TV+, Disney+ and Amazon Prime Video offer substantially
lower streaming prices than Netflix, NEON, Lightbox and Spark Sport.
Radio broadcasting
Commercial radio
In 2019, New Zealand’s commercial radio sector provided different results for
NZME and MediaWorks. In the first half of 2019, NZME’s radio revenue “returned
to growth” with revenue growing 0.2% from the same time in the previous year to
NZ$53.5 million (NZME, 2019). According to NZME, in the first half of 2019 the
company increased its radio audience market share to 37.7% from 34.9% in 2018
(NZME, 2019a). For the financial year ending December 2018, MediaWorks radio
revenue fell from NZ$159 million in 2017 to NZ$153 million in 2018 (Longley,
2019). MediaWorks CEO Michael Anderson said that “while the radio stations'
rating share remained good throughout 2018, tough market conditions in the third
quarter saw revenue take a tumble” (Longley, 2019). As the competition between
the two radio companies intensified, NZME hired Wendy Palmer – an ex-
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MediaWorks employee – as chief radio and commercial officer (“NZME appoints
Wendy Palmer as chief radio and commercial officer”, 2019).
In the commercial radio space, MediaWorks Radio and NZME continued to operate
as a virtual duopoly. However, after MediaWorks announced that it was selling its
television business, the future of MediaWorks’ radio arm was not known. NZME
operates eight brands in most centers: Newstalk ZB, Radio Sport, Flava, ZM, The
Hits, Mix, Coast, Radio Hauraki, as well as Hokonui in some rural locations in the
South Island. Similarly, MediaWorks has nine brands in most regions: Mai FM, The
Edge, George, The Rock, More FM, Breeze, The Sound and Magic.
In June, after GfK’s independent radio survey (second of the year) NZME declared
that its “relentless focus on connecting with listeners fueled sensational results” for
its radio arm (NZME, 2019b). In a release NZME said that “Newstalk ZB grew its
dominance of the commercial radio networks”, adding that “Mike Hosking and
Marcus Lush are streets ahead of their competition” (NZME, 2019b). NZME CEO
Michael Boggs said that the results “give radio industry plenty to celebrate” and
that “radio is delivering incredibly engaged audiences for advertisers all around
New Zealand” (NZME, 2019b).
In September, GfK’s third commercial radio survey revealed that commercial radio
reached 77% of New Zealanders and was “a regular part of 3.3 million New
Zealanders lives every day” (GfK, 2019a). The results showed that in the aftermath
50
of the Christchurch mosque attacks, radio listeners were increasingly tuning in to
listen to the news.
Table 7: Commercial radio reach, rankings and station share in 2019
2
All people
10+
Total
station
share %
Rank
Breakfast
station
share %
Weekly
cumulative
reach (000)
Newstalk ZB
11
1
15.1
512.4
Breeze
9.0
2
7.5
555.1
More FM
8.3
3
9.7
571.4
Network
Magic Music
& Talk
7.9
4
7.4
373.2
The Rock
7.2
5
7.0
430.3
ZM
6.6
6
7.3
492.5
The Edge
6.4
7
6.1
590.8
The Hits
5.4
8
5.3
406.7
Mai FM
4.5
9
4.9
390.7
Source: GfK, third radio survey, 2019
2
The station share result, presented as a percentage, combines the cumulative audience of the
station (weekly reach) and the average time spent listening to establish an overall result.
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Radio Broadcasting Association (RBA) chief executive Jana Rangooni said that
“radio continues to be a trusted source of news, information and commentary in
times of significant news events. We see this with major events of national interest
and more frequently with localized issues like this week’s flooding in the
Coromandel” (GfK, 2019b).
The GfK’s September survey reveals that in September, NZME’s Newstalk ZB was
the number one station nationally and in Auckland when measured by the total
station share (GfK, 2019a). As seen in table 7, MediaWorks’s Breeze was ranked as
second and its network More FM as the third (GfK, 2019). In the breakfast station
share Newstalk ZB was ranked first with More FM and Breeze taking the second
and third spots (GfK, 2019a).
Public interest radio
RNZ Radio New Zealand) is New Zealand’s only commercial-free public interest
broadcaster. It is a Crown-owned company, and it is governed by the Radio New
Zealand Act 1995 and the Radio Amendment Act 2016. RNZ is run by a charter that
sets out the purpose, function and operating principles. Its purpose is to provide
high quality, diverse, comprehensive and independent radio and online content for
New Zealand and Pacific audiences. As stated elsewhere in this report, during 2019
the debate about the future of New Zealand public broadcasting – including RNZ –
continued, and the government was expected to announce its policy by the end of
2019. In an opinion piece written for Stuff, RNZ chief executive Paul Thompson said
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that “one of the things governments can do, is to ensure their independent public
broadcasters are not subjected to constantly shifting market forces” (Thompson,
2019). He added that at RNZ “we do strongly believe that comprehensive public
broadcasting services provide one antidote to the existential threat that faces the
local industry” (Thompson, 2019).
RNZ is funded through NZ on Air and the Ministry for Culture and Heritage. In
2019, the broadcaster received extra funding in the budget. This fell short of that
previously promised by the government. The budget allocated NZ$4.5 million for
RNZ, NZ$4 million for NZ on Air, and NZ$6 million for innovation split between
RNZ and NZ on Air. Peter Thompson, chairman of advocacy group Better Public
Media, described the budget support as "rather underwhelming" (Pullar-Strecker,
2019c).
In 2019, RNZ continued to improve listenership ratings, and it had “strong multi-
platform results” (RNZ, 2019). The third GfK radio survey of the year for RNZ
showed that “typically 669,600 New Zealanders or 15.4% of the 10 plus population
are tuned in to RNZ radio each week” (RNZ, 2019). Additionally, they revealed that
RNZ National has a market share of 11.1% and a cumulative audience of 599,800
listeners (RNZ, 2019). In the breakfast category, Morning Report reached 441,300
listeners, giving a station share of 14.4% of the total radio listening audience in the
breakfast station segment (RNZ, 2019). RNZ head of radio and music, David Allan,
commented that “there is an obvious audience need for a trusted source of
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challenging, innovative and engaging content which promotes informed debate in
this country” (RNZ, 2019). RNZ radio results were boosted by growth in online
audiences as it collaborated with other major media organisations, including Stuff,
NZME, MSN, TVNZ and Bauer. The broadcaster had “significant growth across
digital channels as 805,000 users accessed the RNZ website during a typical week”
(RNZ, 2019). During 2019, its digital audience grew year-on-year 36%, and it had on
average over 1,264,000 monthly views of RNZ content on YouTube (RNZ, 2019).
Iwi Radio Network
Te Whakaruruhau o Ngā Reo Irirangi Māori, commonly referred to as the Iwi Radio
Network, is a federation of 21 Māori radio stations typically attached to individual
iwi throughout New Zealand. Operating on broadcast frequencies reserved for the
revitalisation of te reo Māori, the iwi radio stations are “committed to preserving
and promoting te reo Māori, and engaging audiences with content from their rohe
[region] and across Aotearoa New Zealand” (Māori Affairs Committee, 2018, p.7). It
is funded by Te Mangai Paho, and in 2019 NZ$4.5 million was spent on iwi radio
services (Te Mangai Paho, 2019).
Platforms
In May 2019, The Workshop published a Digital Threats to Democracy report which
was funded by the New Zealand Law Foundation’s Information Law & Policy
Project and Luminate Group. The report states that in New Zealand the use of
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social media is high, and that “around a quarter of the sample [of New Zealanders]
used social media to engage with political issues or politicians” suggesting that
people were using these platforms as a tool “for engagement in formal democratic
system” (The Workshop, 2019, p.37). Another report, published in 2018, noted that
there were “power imbalances in digital media markets” as Google and Facebook
dominated the New Zealand digital advertising market. They were the main
websites measured by traffic as well as primary drivers for the news companies’
website traffic (Myllylahti, 2018b). During 2019, the big platform companies’
dominance in the New Zealand media market continued. Figures from the
Interactive Advertising Bureau New Zealand (IABNZ) show that in the first quarter
of 2019, search (mainly Google) made 63% of total digital advertising revenue and
social just over 3% (IABNZ, 2019). The total revenue for digital advertising was
NZ$275 million of which search’s proportion was NZ$174 million and social media’s
NZ$9 million. The rest was split between display and classified advertising (IABNZ,
2019).
In January 2019, 3.4 million New Zealanders were actively using social media –
meaning that social media companies reached 71% of the population (Hootsuite,
2019). The data based on monthly average traffic, gathered from SimilarWeb, shows
that search engines and social media websites such as Google, YouTube, Facebook
and Netflix dominated website traffic in New Zealand (Hootsuite, 2019).
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Table 8: Most visited websites and social media sites in 2019
Monthly average
traffic
Function
Most active social
media platforms
(survey based)
Google.com
Search
YouTube
Youtube.com
Streaming video
Facebook
Google.co.nz
Search
FB Messenger
Facebook.com
Social
Instagram
Trademe.co.nz
Shopping
Pinterest
Netflix.com
Streaming video
Snapchat
Stuff.co.nz
News
WhatsApp
Wikipedia.org
Reference
LinkedIn
Reddit.com
Social
Skype
NZHerald.co.nz
News
Twitter
Source: Hootsuite, 2019
As seen in table 8, stuff.co.nz was the seventh most visited website and the
nzherald.co.nz the tenth most visited website when measured by the monthly
average traffic (Hootsuite, 2019). Of the social media platforms, YouTube was most
actively used, followed by Facebook, Facebook Messenger and Instagram
(Hootsuite, 2019).
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In June 2019, Stuff’s neighbourhood community site Neighbourly, or what Stuff
calls a “social media network”, turned five with “more than 730,000 members
(Lovell, 2019). By then, the site had “recorded more than 21 million posts, 54
million interactions between neighbours and helped to organise more than 21
thousand events” (Lovell, 2019). Neighbourly is used by its members to “interact on
topics such as crime and safety, council issues, local services and lost pets” (Lovell,
2019).
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3. New Zealand media ownership and patterns
During 2019, there were major changes in media ownership, and major structural
changes were anticipated as well. Financial results for New Zealand media
companies were far from uplifting as they reported declining revenues and profits.
MediaWorks became partly owned by Australian outdoor advertising conglomerate
QMS, and Sky TV gained a new substantial shareholder in Rugby New Zealand
(5%). Additionally, the New Zealand government’s Accident Compensation
Corporation became a substantial shareholder in Sky TV.
In 2019, five financial institutions owned 48% of NZME’s shares, and 38.5 percent
of Nine’s shares. Additionally, financial institutions had 28.4 percent ownership in
Sky TV’s shares. Financial institutions listed here are institutions with a
substantial shareholding in the company – owning five percent or more of the
company’s shares.
58
NZME
Figure 1: NZME share price August 2018 - 2019
Source: NZX
During 2019, the NZME share price fell substantially: in a period from September
2018 to September 2019, the share price dropped 38 percent. In the first six months
of this financial year, NZME’s net profit fell 73 percent from the same period in
2018, and its revenue declined four percent to NZ$181 million (NZME, 2019a).
Australian equities fund management group Auscap Asset Management continued
to be the largest substantial shareholder in the company with a 19.2 percent
shareholding, and boutique fund manager Renaissance Smaller Companies
maintained its 12.4 percent of NZME shares. Australian boutique fund manager
Forager Funds Management held 6.3 percent of the company’s shares, Sydney
based investment manager Spheria Asset Management 5.3 percent, and investment
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bank UBS continued to hold 5.1 percent of the shares (NZME, 2019c). Together,
these five companies owned almost half of the company’s shares, as seen in table 9.
The composition of the NZME board remained the same as in 2018 (table 10).
Table 9: NZME substantial shareholders 2019
Substantial shareholders (as of
September 2019)
Ownership
Auscap Asset Management
19.2%
Renaissance Smaller Companies Ltd
12.4%
Forager Funds Management
6.3%
Spheria Asset Management
5.3%
UBS
5.1%
Total
48.3%
Source: NZME
Table 10: NZME board members 2019
Board member
Other director roles
Peter Cullinane,
Chairman
HT&E Limited, Lewis Road
Creamery
David Gibson
None declared
Carol Campbell
NZ Post, Kingfish, Marlin
Global, Kiwibank, NPT Limited
Sussan Turner
Aspire2 Group, Pro Chancellor
at AUT
Barbara Chapman
None declared
Source: NZM
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Nine/Stuff
Figure 2: Nine share price September 2018-2019
Source: ASX
Nine saw its share price declining 11 percent in a period from September 2018 to
September 2019. As a result of its merger with Fairfax Media Australia, Nine’s
revenue in the financial year 2019 grew 40 percent from the previous year to A$1.8
billion (Nine, 2019c). The group’s net profit grew by 19 percent to A$187 million.
The total revenue of Stuff fell 10 percent to A$253 million with advertising revenue
falling 18 percent from the previous year. During 2019, Nine sold its regional
newspapers in Australia, and was in process of acquiring rest of the Macquarie
radio network (as discussed above). As also stated, Nine has listed Stuff as a
sellable asset as it has no long-term objective to hold New Zealand media assets. In
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September 2019, the largest shareholders of the company were financial
institutions with six financial companies owning 38.5 percent of its shares. The
largest shareholder of the company is Birketu Pty, an investment firm connected to
Bermuda-based billionaire Bruce Gordon who owns television company WIN
Corporation in Australia (Nine, 2019d). Australian investment management group
Pendal owns 7.5 percent of the company’s shares and this is followed by American
investment management firm Fidelity Investments, American investment advisory
group The Vanguard Group, Australian asset management Antares Capital
Partners and American investment management corporation BlackRock (as seen in
table 11).
Table 11: Nine substantial shareholders 2019
Substantial shareholder (as of
September 2018)
Ownership
Birketu Pty (Bruce Gordon)
14.1%
Pendal Group
7.5%
FIL Investment Management
5.7%
The Vanguard Group
5.0%
Antares Capital Partners
3.3%
BlackRock Investment Management
2.9%
Total
38.5%
Sources: ASX, Nine
Nine’s board is led by Peter Costello, who became chairman of the company in 2018.
The company’s deputy chairman is Nick Falloon, who was chairman of the Fairfax
board before taking up his current role in Nine in December 2018 (Nine, 2019e).
Another ex-Fairfax member of the board is Mickie Rosen, who served on the Fairfax
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board from March 2017, before moving on to the new board when Nine and Fairfax
merged in December 2018. Rosen has previously led business for the companies
such as Yahoo, Fox and Disney (Nine, 2019e). According to Nine, Hugh Marks has
“over 20 years’ experience as a senior executive in content production and
broadcasting in Australia and overseas” (Nine, 2019e). The other board members
have a background in either global/local legal, financial or consultancy businesses
(see table 12).
Table 12: Nine board members 2019
Board member
Other director roles
Peter Costello,
Chair
Nick Falloon,
Deputy chairman
Domain Holdings, chairman
Hugh Marks
Patrick Allaway
Bank of Queensland, Chair;
Domain Holdings, non-
executive director
Samantha Lewis
Orora and Aurizon Holdings,
Board member
Mickie Rosen
Catherine West
Source: Nine
Sky TV
During 2019, Sky TV’s share price dived as the company made a substantial loss
and announced that it was not paying a dividend (Sky TV, 2019b). In October, its
share price dropped to an all-time low as Spark secured domestic cricket
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broadcasting rights for the next six years. Sky’s shares fell 17 percent, giving the
company a value of “NZ$381 million, a fraction of the NZ$2.7 billion market
capitalisation it commanded at its peak in mid-2014” (“Sky shares plunge to all-
time low as Spark steals the cricket rights”, 2019). As seen in figure 3, the
company’s share price declined sharply during 2019 (but it recovered somewhat
after it secured SANZAAR rugby broadcasting rights and gained NZR as its
shareholder). In October, Sky TV’s shareholders “overwhelmingly backed the
company’s rugby rights deal with NZ Rugby”, and their support was needed as the
deal was “worth more than NZ$235 million, which is more than half of Sky's market
value on the NZX” (Stock & Pullar-Strecker, 2019b).
Sky TV gained a new set of investors during 2019. Rugby New Zealand took a 5
percent ownership in the company, and RugbyPass investors gained a 6.1 percent
shareholding after Sky’s takeover of the company (as seen in table 13). The
government-owned Accident Compensation Corporation (ACC), which is the Crown
entity responsible for administering New Zealand’s universal accidental injury
scheme, became a substantial shareholder in the company with a 7.2 percent
holding. Two financial institutions, Scottish asset management firm Kiltearn
Partners and British fund manager Jupiter Asset Management were the largest
shareholders in the company. (In 2018 Kiltearn Partners did not appear as a large
shareholder in Sky TV, but it held over 15 percent of the company’s shares in 2017.)
In 2019, American investment group BlackRock Group and the Australian Allan
Gray Group were no longer substantial shareholders of Sky TV.
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In February 2019, British media executive Martin Stewart took helm of the
company, and restructured the company’s board. In March 2019, Sky TV’s former
chief executive John Fellet, who served the company for 28 years, resigned from the
company’s board in an "out with the old, in with the new” move (Ambler, 2019). In
an NBR article, Fat Prophets head of research, Greg Smith, said that the overhaul
was the right move as "the incumbent management team had stood by for years and
watched massive disruption and destruction in shareholder value without lifting a
finger and with an air of extreme complacency” (Ambler, 2019).
Following the retirement of long-standing chairman Peter Macourt, Philip Bowman
was appointed as the company’s chair (Sky TV, 2019). Previously, Bowman had led
several global brands and companies, including Sky UK, Burberry and British Sky
Broadcasting (Sky TV, 2019e). He also sits on the boards of Kathmandu, Ferro vial
SA and Better Capital PCC (Sky TV, 2019e). Weeks later, New Zealand
businesswoman and professional director Joan Withers was appointed to the
company’s board (Sky TV, 2019f.). She has previously held CEO positions at Fairfax
and The Radio Network as well as being the former chair of TVNZ (Sky TV, 2019f).
Withers is also chair of The Warehouse Group, Mercury and a director of ANZ NZ
(Sky TV, 2019f). As a part of the SANZAAR deal, NZR “didn't want a seat at Sky
Network Television's board table in its deeper relationship with the pay-TV
operator” (“NZ Rugby not ready for a seat at Sky board table”, 2019).
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Figure 3: Sky TV share price August 2018 - August 2019
Source: NZX
Table 13: Sky TV substantial shareholders 2019
Substantial shareholder (as of
September 2019)
Ownership
Kiltearn Partners
10.4%
Jupiter Asset Management
9.9%
Accident Compensation Corporation
7.2%
Rugby Pass Investors
6.1%
New Zealand Rugby
5.0%
Total
38.6%
Sources: NZX, Sky TV
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Table 14: Sky TV board members 2019
Board member
Other director roles
Philip Bowman
Chair
Kathmandu, Ferrovial SA and
Better Capital PCC.
Martin Stewart,
CEO
Joan Withers
Chair of The Warehouse
Group, director of ANZ NZ
Susan Paterson
Chair of Steel and Tube and
Theta; director of Goodman
NZ, Arvida Group, ERoad and
Les Mills NZ.
Geraldine McBride
Director of National Australia
Bank and Fisher & Paykel
Healthcare.
Derek Handley
Mike Darcy
Chair of M247; director of
Arqiva
Source: Sky TV
MediaWorks
During 2019, MediaWorks became partly owned by Australian QMS, and its board
also became occupied by Australian directors. MediaWorks gained a new majority
shareholder as it merged its assets with QMS New Zealand, owned by Australian
outdoor advertising company QMS. As a part of the deal, QMS gained 40 percent of
MediaWorks’s shares with funds managed by Oaktree Capital, keeping a majority
60 percent shareholding (MediaWorks, 2019a). In 2018, Oaktree Capital owned 100
percent of MediaWorks’s shares. As a part of the deal, QMS received a capital
return of A$38 million (MediaWorks, 2019a). However, in October, private equity
firm Quadrant made an offer to buy QMS. If the deal goes through, MediaWorks
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will become 100 percent owned by Oaktree Capital and Quadrant. However, the
deal requires approval from shareholders, the Australian Foreign Investment
Review Board and the New Zealand Overseas Investment Office (Edmunds, 2019).
As a part of the MediaWorks/QMS merger, QMS gained two board seats of the five-
member board of MediaWorks. Both QMS chairman Wayne Stevenson and QMS
group chief executive officer Barclay Nettlefold were appointed to the company’s
board. At the time of the merger, Nettlefold said that “QMS NZ and MediaWorks
merger will deliver compelling value for advertisers and maximise cross-platform
revenue synergies for the business” (MediaWorks, 2019a). He also said that the
“merger and capital return [will] realise value for QMS shareholders, better
positioning the company to take advantage of compelling future investment
opportunities as they arise” (MediaWorks, 2019a).
Table 15: MediaWorks board members 2019
Board
member
Other director roles
Jack Matthews,
Chairman
Oaktree Capital, Plexure
Group
Michael
Anderson
(CEO)
Jonas
Mitzschke
Oaktree Capital
Wayne
Stevenson
QMS Chairman
Barclay
Nettlefold
QMS Group CEO
Source: MediaWorks
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Key events and trends
During 2019, New Zealand’s media sector was full of uncertainty. The fate of
MediaWorks’ television arm was not known at the time of writing, and potentially
hundreds of jobs at the broadcasting company were at risk. It was not clear if
MediaWorks would be sold or simply closed. Mark Jennings, co-editor of Newsroom,
wrote after the announcement that there was not much value left in MediaWorks.
He stated that the “Three business now could sell for a small amount of cash,
or more likely someone taking on the programming and staff liabilities. It
won't quite be a case of 'free to a good home' but it will come close”
(Jennings, 2019c). He assessed that the only logical buyer for MediaWorks’s
television business would be Sk y TV, however that company is facing its
own challenges as it competes with Spark and streaming services.
Additionally, the government was planning “the biggest shake-up in
broadcasting for 30 years” as it considered a new public media organisation
to replace TVNZ and RNZ (Peacock, 2019b ). Broadcasting Minister Kris
Faafoi was expec ted to announce the government’s plan by the end of
December 2019. On November 14, RNZ journalist Jane Patterson had
revealed that the government’s advisory group regarded the current status quo
as "unsustainable". It therefore "collectively recommended the government agree to
disestablish TVNZ and RNZ and to establish a new public media entity" (Patterson,
2019). The advisory group, whose members have not been identified, considered
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three options for the revamp of public broadcasting: a merger between RNZ and
TVNZ newsrooms; increasing funding of New Zealand On Air; and the
establishment of a new public media entity (Patterson, 2019). According to
Patterson (2019), the new entity would have a "clearly defined public media
mandate and purpose” and operate across a variety of platforms, some of which may
be free from advertising (Patterson, 2019). The new entity would be funded by
various sources including the state, advertising, sponsorships and subscriptions
(Patterson, 2019). Newsroom co-editor Mark Jennings commented that simply
combining TVNZ and RNZ would not succeed (Peacock, 2019b). He noted that
"we've had two organisations that have had very clear focuses. To try and turn them
into something like the ABC in Australia now risks an awful lot” (Peacock, 2019b).
TVNZ chief executive Kevin Kenrick said that if there were going to be any changes
in TVNZ’s future obligations, “the legislative process would likely take years to
implement” (Pullar-Strecker, 2019d). Advocacy group Better Public Media’s
chairman, Peter Thompson, said it would be good to see a multi-platform public
media provider, but warned that “it would not be a simple task to glue public
service and commercial priorities together in the same institution without
significant compromises" (Pullar-Strecker, 2019d).
The proposal to overhaul New Zealand’s public broadcasting is at an early stage,
and Faafoi was not willing to comment on the decision of the government before it
had “a chance to consider its options” (Pullar-Strecker, 2019d). However, Prime
Minister Jacinda Ardern said that “doing nothing to address the challenges facing
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public broadcasting in New Zealand is not an option”, adding that “we need to
support public broadcasting” (“Bolstering public broadcasting is the answer –
Ardern”, 2019). However, there are multiple hurdles to be overcome before the
public broadcasting system can be restructured. As Duncan Greive points out, the
plan is “something that TVNZ, in particular, will find hard to digest, and that
private sector media will be rightly very wary of. The media’s year of chaos rolls on,
without a conclusion in sight” (Greive, 2019c).
MediaWorks – facing commercial realities?
When MediaWorks announced in October 2019 that it was selling its television
network including Three, Bravo and ThreeLife, many observers had a sense of déjà
vu. The sale did not come as a surprise: MediaWorks has been a loss-making entity
for years (table 16). The company’s management had sent warning messages about
the viability of its television business throughout the year. When commenting on
the sale of TV operations, MediaWorks chairman Jack Matthews (representative of
Oaktree Capital) said that “we are in a commercial environment and have to face
commercial realities”, adding that “clearly the market has a larger impact on Three
given its genuine commercial imperative”. In the latter context he was referring to
the free-to-air television market in New Zealand (MediaWorks, 2019b). He further
stated that “the ongoing success of our radio business and recent merger with QMS
demonstrates that MediaWorks has a very bright future… our focus now is to
accelerate the opportunities that exist for those platforms” (MediaWorks, 2019b).
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His statements indicated that Oaktree Capital wanted to divest the television side
of the business.
Table 16: MediaWorks’s financial performance
Loss/profit
$NZ millions
2009
-55 million
2014
+12 million
2016
-15 million
2017
-5.7 million
2018
-5.5 million
Sources: JMAD reports 2014-2018; Venuto, 2019
The curious question though is why MediaWorks was not sold earlier on. The
Spinoff reported that in 2015, “a very serious offer of over NZ$400m was made to
buy MediaWorks from Sky TV, and if the two companies had merged it “would have
created a TV powerhouse of unparalleled strength” (Greive, 2018). Oaktree Capital
has never explained publicly why the Sky TV’s offer did not go further.
In a press release, MediaWorks CEO Michael Andersson said that in 2019, Three
had “record ratings and revenue share highs”, adding that “MediaWorks TV is now
in a place where it can be separated and operated under a new owner in a more
sustainable fashion, and ultimately, for profit” (MediaWorks, 2019b). However, in
the financial year ending December 2018, the company made a NZ$5.5 million loss
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of NZ$350 million in revenue (Venuto, 2019). Anderson insists that Three is not a
failing business, and just needs a new owner. He said that because the government
has given privileges to TVNZ, it has skewed the market: “whether it be dividend
relief, whether it be the granting of no debt, whether it be the new premises,
whatever it is, gradually over the years it's enabled a stronger and stronger and
stronger position for TVNZ to take" (“Three not failing, just needs a new owner –
MediaWorks CEO”, 2019). However, MediaWorks has also enjoyed some privileges
granted by the government.
The JMAD New Zealand media ownership reports from 2011 to 2018 provide a
timeline of the developments concerning MediaWorks’s ownership and finances. The
company has been owned by private equity and investment management funds for
12 years. If the Quadrant Private Equity buys QMS, financial ownership of
MediaWorks continues determining its future. As Peter Thompson points out, “one
might also contend that allowing vulture capitalists to buy up media companies to
extract short-term speculative profits was the ultimate regulatory problem in
MediaWorks case. If their television business does close, Oaktree (and Ironbridge
before them) must ultimately hold themselves responsible for inflicting death by a
thousand cuts” (Thompson, 2019a, p.17).
In 2007, CanWest sold its 70 percent stake in MediaWorks to HT Media which was
a subsidiary of Ironbridge Capital. Hope (2015) states that “this exemplified a new
financialised phase in the transnational colonization of domestic media” (p.4).
Ironbridge Capital then launched a 100 percent takeover of MediaWorks at NZ$727
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million, including net debt (Ironbridge Capital, 2007). Ironbridge Capital is an
Australasian private equity group. At the time, Ironbridge Capital New Zealand
operational partner Kerry McIntosh said that: “this acquisition follows our
extensive due diligence investigation of the business… the vendor recognised not
only the attractive offer we put forward, but equally our commitment to preserve
the strength and integrity of the MediaWorks business” (Ironbridge Capital, 2007).
In 2009-2010, MediaWorks was heavily indebted but managed to raise NZ$70
million of new capital from investment banks including Goldman Sachs JBWere
which took a 13 percent stake in the company. After restructuring the company’s
debts, Ironbridge Capital chairman Brent Harman said that “the recapitalization,
combined with the restructure of the company’s banking arrangements, has placed
the company on a sound financial footing. This, together with the improving ad
market conditions, places the company in an excellent position for 2010 and beyond”
(Myllylahti, 2011).
In 2011, the government deferred MediaWorks’s NZ$42 million payments to the
Crown for its radio spectrum licenses as the company was restructuring debts and
recapitalising. The move was widely criticised because MediaWorks was owned by a
private equity firm. Then Labour Party’s MP Trevor Mallard wrote that “at a time
when many Kiwi companies are struggling, taxpayers will want to know why a
private company was given a $42 million low interest deferred payment scheme for
radio licensing agreement” (Myllylahti, 2011). In the same year, Ironbridge
Capital’s operating partner Kerry McIntosh and partner Mike Hill stated in a press
74
release that “the financial position of the company is good, earnings have improved
and debt has been reduced… MediaWorks generated earnings before interest and
tax depreciation (EBITDA) of NZ$501 million in FY10. That represented an
increase of 11%. We consider this to be a credible result in a tough market and
compares favourably with our peers” (Myllylahti, 2011).
In 2012, MediaWorks had paid in full its deferred payments to the Crown for radio
spectrum licenses, nearly two years ahead of schedule (Myllylahti, 2012). The
company again restructured its debts and gained TPG and Oaktree Capital as its
main debtholders. Oaktree Capital bought NZ$125 million of MediaWorks’s debt
from Bank of Scotland and BNZ. At the end of 2011, MediaWorks was making a
NZ$306 million loss after writing off goodwill, and the costs from its loan interests
rose almost to NZ$60 million (Myllylahti, 2012).
In 2013, MediaWorks was placed in receivership to reduce its debt burden. At the
time, the company’s managing director Sussan Turner noted that the “debt
structure that was adopted when MediaWorks Limited changed hands in 2007 was
unsustainable” (Myllylahti, 2013). Just before the receivership, MediaWorks had
assets of NZ$329 million but owed NZ$528 million to its lenders. Once in
receivership, the company sought to cut its debts from NZ$700 million to less than
NZ$100 million (Myllylahti, 2013). As part of the restructuring, Ironbridge Capital
withdrew from the company. During its six-year reign, MediaWorks’s total debt
burden rose from NZ$165 to NZ$797 million (Hope & Myllylahti, 2013). During
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2013, MediaWorks’s assets were transferred to a new holding company which was
owned by Oaktree Capital (26.7 percent), Royal Bank of Scotland (21.9 percent),
private equity firm Texas Pacific Group Capital (15.7 percent), Westpac Banking
Corporation and Rabobank each hold 14.6 percent, and JP Morgan holds 6.5 percent
(Myllylahti, 2013).
In 2015, MediaWorks returned to profit. In ten months ending in September 2014,
the company made an NZ$12 million profit (Myllylahti, 2015). At the time,
MediaWorks described the company’s television business as healthy. However, by
September 2015, the group revenue had fallen from NZ$50 million to NZ$20 million
from the previous year as a result of costs ballooning at its television arm
(Myllylahti, 2015). In April 2015, MediaWorks announced that Oaktree Capital
owned 77.8 percent of the company’s shares after purchasing them from Royal Bank
of Scotland and Westpac. It was later reported that Oaktree Capital owned 100
percent of the company (Myllylahti, 2015).
In 2016, MediaWorks revealed that its profit had nearly halved in the year to
December 2015 because of the weak advertising market and its costly reality
television programs (Myllylahti, 2016).
In 2017, MediaWorks reported a substantial loss in the financial year ending
December 2016. For the financial year 2016, its television and radio business made
an operating loss of NZ$15 million (Myllylahti, 2017). Company’s CEO Michael
Anderson said that the company had suffered “internal disruption” as key
76
broadcasters and managers were lost: “we gave away more share than we should
have but we didn’t have a clear focus – we do now” (Myllylahti, 2017).
In 2018, MediaWorks announced that in the financial year 2017, it made a
substantially smaller loss than in 2016 – a loss of $5.7 million on revenue of $300
million (Myllylahti, 2018). MediaWorks’s radio operations had revenue of NZ$159
million compared to the television revenue of NZ$130 million. During 2018,
MediaWorks chief executive Michael Anderson created headlines as he warned the
government about its plans to launch RNZ+. Late in 2018, MediaWorks announced
that it was planning to merge with Australian outdoor advertising company QMS,
which would take a 40 percent stake in the company, leaving Oaktree Capital with
60 percent shareholding. As a part of the deal, QMS was to receive a capital return
of A$38 million.
The NZ Herald paywall and other new pay models
In 2019, pay models in the media sector expanded as outlets were seeking ways to
financially support their journalism: the NZ Herald introduced a paywall, The
Spinoff introduced voluntary memberships, and Scoop offered paid e-mail
subscriptions. The National Business Review and Newsroom Pro already have
digital subscriptions for their content, and additionally Newsroom has voluntary
donations in place. Non-profit Crux has also introduced voluntary donations. Of the
major news outlets, the Stuff website is the only one without any digital reader
payments. In April 2019, the NZ Herald launched digital subscriptions for its
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premium content. In June, the parent company NZME reported that the news site
had attracted 10,000 subscribers in the first six weeks – its target for the full year
(McBeth, 2019). According to NZME chief executive Michael Boggs, 35 percent of
those 10,000 subscribers had signed up to an annual payment plan of NZ$199. The
rest took the NZ$2.50 a week introductory offer which rose to NZ$5 a week after
two months (McBeth, 2019).
In August, NZME announced that the NZ Herald had “hit a new milestone with
more than 15,000 paid digital subscribers” (NZME, 2019d). Boggs commented that
the NZ Herald paywall had been “a huge success” as the subscriptions and revenue
exceeded expectations (NZME, 2019d). In a statement the company said that
“thousands” of the NZ Herald print subscribers had activated their digital
subscriptions, meaning that the papers premium service had been activated by
“close to 40,000 subscribers” (NZME, 2019d). According to Murphy, the NZ Herald
was making around NZ$3 million out of its digital subscriptions (Murphy, 2019).
Based on the four weeks quantitative data analysis of the NZ Herald’s paid and free
content, conducted by JMAD co-director Merja Myllylahti, it is evident that the NZ
Herald paywall model is a soft model as the majority of the site’s content is freely
accessible – approximately 27 percent of the content requires a digital subscription
(figure 4
3
).
3 The research was conducted by Dr Merja Myllylahti. The number of free and paid articles – labeled
with or without the premium content label - on the NZ Herald home page were counted once a week
between July 29 and September 30, 2019. Branded content including GrabOne, YUDU, OneRoof and
Driven were not included in the sample.
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Figure 4: The NZ Herald h ome page paid and free content
Source: Myllylahti, 2019
All the major New Zealand news sites saw increases in their traffic in March
because of the Christchurch Mosque attacks. Consequently, their traffic – measured
by a number of visits – declined in the April-May period (figure 5). For the NZ
Herald, the number of visits to its site fell between April and June whereas Stuff’s
traffic stabilised
4
. However, both the NZ Herald’s and Stuff’s traffic have increased
since June, indicating that the NZ Herald’s website traffic has not been greatly
affected by the paywall. On the other hand, RNZ’s website has seen an increase in
4 The traffic numbers are measured by the visits to the sites from desktop and mobile devices.
Figures are from SimilarWeb analytics. The number of visits to the sites were recorded from March
to September 2019.
0
20
40
60
80
100
120
Jul-29 Aug-05 Aug-12 Aug-19 Sep-30
The NZ Herald paywalled and free articles
2019
Paywalled Free Total
79
its visit numbers, whereas the number of visits to TVNZ’s website has remained
stable. The growth in RNZ visits may be partly due to its content partnerships with
other news outlets.
Figure 5: New Zealand ne ws websites num ber of visits 2019
So urce : Simil arWe b
In October, the NZ Herald advised that its premium subscriptions had “expanded
business, political and investigative journalism, insightful analysis and
commentary and international content” (The NZ Herald, 2019). The newspaper also
said that “much of our journalism, including breaking and ‘commodity’ news, will
remain free” (The NZ Herald, 2019). Straight after the implementation of the NZ
Herald’s digital subscriptions, the most paywalled content on the NZ Herald home
0
5
10
15
20
25
30
35
40
45
March April May June July August September
NZ news sites traffic/number of visits
NZH Stuff TVNZ RNZ
80
page included business and finance stories, features and lifestyle, and sports
5
(figure 6). Most general news concerning New Zealand and politics/diplomacy were
mainly free to acccess.
Figure 6: The NZ Herald p aywa lled conte nt after launch
Source: Myllylahti, 2019
5
The content sample was taken from the NZ Herald homepage once a week between May 14 and
June 4, 2019.
0 2 4 6 8 10 12
Business & Finance
Politics & Diplomacy
NZ
Features & Lifestyle
Sports
Art & Entertainment
The NZ Herald paywalled content
Week 4 Week 3 Week 2 Week 1
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Conclusion
During 2019, the New Zealand media sector was facing fundamental changes as
major media companies continued to fight for their financial viability. It was
evident that the New Zealand media was a “broken estate” (Bunce, 2019). In this
context it was not surprising that the prospect of the NZME-Stuff merger
resurfaced, and that pay models for news expanded. Of the main commercial media
outlets, Stuff remained the only one without any kind of payments for its digital
readers.
The year proved that the commercial television broadcasting sector was in serious
trouble: MediaWorks put its television arm for sale; Sky TV invested heavily in
rugby broadcasting rights with a high cost (while not paying a dividend); TVNZ
announced plans to invest more in local content while withdrawing dividends from
the government for next three years. As the commercial broadcasters experienced
financial difficulties, the public broadcasting sector was facing its biggest
restructure in decades. However, the New Zealand government was yet to announce
its plans for the public broadcasting sector.
From 2011, JMAD New Zealand media ownership reports have explained how
financial ownership structures were undermining the viability of media companies.
This general process was identified in the case of Sky TV, NZME, Stuff and
MediaWorks. During 2019, the future of the entire private broadcasting sector was
placed in the hands of two financial firms: American Oaktree Capital and Sydney-
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based Quadrant Private Equity. At the time of writing, Oaktree Capital owned 60
percent of MediaWorks, and Quadrant was in the process of acquiring
MediaWorks’s second largest owner QMS. If that merger goes through as expected,
the private equity firm will become the second biggest owner of MediaWorks. This
also means that MediaWorks would be 100 percent owned by Oaktree Capital and
Quadrant. They will have strong influence on how the New Zealand media market
is shaped in the future. On this matter, an important lesson can be drawn from
previous JMAD reports. Private financial entities regard media companies not as
structured wholes but as assemblages of business units that ought to be continually
restructured to maximise profit rates.
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Epilogue: Platform regulation – abandon the carrot approach
In late October 2019, a quick Google search of the keywords “platform regulation
after the Christchurch attacks” brought up 816,000 search results. Another search
with the keywords “platform regulation in New Zealand after Christchurch attacks”
brought up 1.3 million results. Clearly, platform regulation was a hot topic in the
aftermath of the Christchurch Mosque terrorist attacks which were live-streamed
on Facebook and other social media platforms. However, very little has changed in
terms of platform regulation in Aotearoa, as the country has adopted a “carrot
rather than stick approach to social media giants” (Daalder, 2019). Perhaps it is
time to abandon that carrot approach.
In May, Prime Minister Jacinda Ardern met French president Emmanuel Macron
in Paris in an action summit called the “Christchurch Call”. The call “outlines
collective, voluntary commitments from governments and online service providers
intended to address the issue of terrorist and violent extremist content online and to
prevent the abuse of the internet as occurred in and after the Christchurch attacks”
(Christchurch Call, 2019). In May, 17 countries, the European Commission, and
tech companies including Amazon, Facebook, Google, Twitter, Microsoft and
YouTube signed the agreement to “eliminate terrorist and violent extremist content
online” (Moir, 2019). Additionally, New Zealand and global investors worth more
than $NZ5 trillion were uniting “to put pressure on companies who have signed up
to the Christchurch Call” (Moir, 2019). At the time that investor group included 55
funds of which 27 were from New Zealand, including NZ Super Fund and various
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banks (Moir, 2019). By September, that investor group included “89 entities with
NZ$13 trillion assets under management” (NZ Super Fund, 2019). The NZ Super
Fund update noted that investors in the group were “working to engage directly”
with Facebook, Google and Twitter to “encourage them to strengthen controls” over
live streaming or distribution of harmful content (NZ Super Fund, 2019). NZ Super
Fund CEO Matt Whineray commented that “we want to see solid actions from the
companies involved” (NZ Super Fund, 2019). Reportedly, KiwiSaver manager
Milford Asset Management sold its shares in Facebook just after the March attacks
(these were valued at around NZ$14 million) (Smellie, 2019). In August, Whineray
did not rule out selling “some or all of its holdings in Facebook, Twitter and
YouTube”, yet he said that the sale would be a last resort (Mandow, 2019). In an
interview with Newsroom, he observed that “as soon as you don’t own shares you
are a lot less powerful as a voice” (Mandow, 2019). However, he admitted that the
decision for any sale was “not just about ethics – it’s about investment risk. If
customers lose faith in Facebook, Twitter or YouTube, or if the companies face huge
financial payouts, investors will lose out” (Mandow, 2019). At the time of writing, it
was not clear if the NZ Super Fund or any other large New Zealand or global
investors in the group had sold or reduced holdings in Facebook.
As authorities around the globe are busy investigating platforms or implementing
regulations, there is no real action in New Zealand. In July, the Australian
Competition and Consumer Commission published its Digital Platform Inquiry
recommendations for a year-long investigation. To address platform power in
85
Australia, the commission recommended changes in merger laws, new codes of
conduct, monitoring of the advertising market, protection of privacy and private
data collection, and greater transparency, among other things (ACCC, 2019). In
response to the ACCC report, the New Zealand Commerce Commission indicated
that it did not plan to run a similar investigation. The Commission’s spokesperson
said that "we will watch the response of the Australian Government to the ACCC’s
recommendations with interest and continue to monitor developments and
discussion on this issue in other countries as well” (Daalder, 2019). As Peter
Thompson points out, New Zealand’s media policy frameworks have changed
“relatively little since the deregulation of the Rogernomics era, from the mid-1980s
and 1990s” (Thompson, 2019b, p.3). He says that in New Zealand, “light-touch
regulation has generally been preferred, with policy interventions generally
focusing on the state sector itself (e.g. public broadcasters)” (Thompson, 2019, p.3).
Regulating platforms in New Zealand is complicated as companies such as Facebook
do not see themselves as subject to New Zealand jurisdiction. Surely there has to be
some scope for regulation. As the US media academic Victor Pickard points out,
“Facebook has hurt democracy around the world. Considering the accumulating
damage it has wreaked and the skewed power asymmetry between Facebook and its
billions of users, we need a realignment” (Pickard, 2019). Time for a stick, not a
carrot.
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