NZ media’s second wave of doom

Some of New Zealand’s best-loved media programmes and publications are dying in a wave of economic hardship which is starting to rival the cataclysm of mid 2020 when the Covid pandemic paralysed the industry.
Big media companies are warning of protracted lower profits and subscriber and ad revenues, and smaller ventures old and new are folding or sounding the klaxon that their futures are on a knife edge.
The scale of the problem is less obvious, initially, than the closure by German publisher Bauer of all its magazines four years ago (many bought and relaunched by others) at the cost of hundreds of jobs, the end of Radio Sport and redundancies through the news business.
To put the media troubles of mid-to-late 2024 in context, here is a possibly incomplete list of publications, programmes, shows and sites that New Zealand started 2024 with as part of our media landscape but by year’s end will not be seen again in their current state:
North & South magazine (suspended, trying for online subscription solution)
14 NZME community papers from Northland to Wellington (closing by year’s end, costing 30 jobs)
NZ Life & Leisure magazine (bought out but submerged under another title)
The Crux online news site covering central Otago and Dunedin (suspended after six years)
ZB Plus, a subscriber online variant of NZME’s NewstalkZB, led by lawyer Philip Crump, closed in June after just nine months
Sunday current affairs programme (ended by TVNZ)
Fair Go
TVNZ late news
TVNZ Midday news
Newshub at 6 pm (Newshub news operation closed by WBD costing hundreds of jobs, 3 News-lite bulletin now produced by Stuff)
A.M (Newshub breakfast show)
Newshub late news
Stuff’s Newsable daily podcast (might appear intermittently)
TVNZ will downgrade its 1News website (after initially proposing closure in the latest round of a net 50 job cuts which will take total staff to 550, down from 735 just a year or two ago).
It is a confronting list, with possibly more to come by year’s end, if the business caution aired to the NZX by our two major listed media firms, NZME and Sky TV, turns into reality.
NZME told the exchange last week its profit before tax and interest and other measures will be its lowest since 2018 – lowering its guidance from above $57m to between $53m and $55m because of a poor third quarter of advertising revenue. In 2018 it recorded $54.7m but in 2019, pre-Covid, it had raised that to $65.7m. Even in Covid years, with a Covid wage subsidy, it was higher.
The company told the NZX “given the slower than expected recovery of market conditions, the resulting advertising revenue performance” had been negative between June and September. It promised, as it always does, that the next quarter was looking better, but that is better than what was a non-starring similar quarter in 2023.
Sky noted to the NZX that “continued economic pressure” (as well as it re-phasing revenue-raising initiatives as it sorts a changeover of its satellite) “is seeing softening in customer and advertiser revenues”.
Retail NZ, quoting Stats NZ’s latest numbers, reported this month that electronic card spending on retail fell in October by 1.1 percent compared with October 2023, and September was worse, down 5.6% percent on the year earlier month. The environment in 2023 was already hard hit by the economy.
Less money spent at retailers almost inevitably means less money spent by retailers advertising their products, and thus less money entering the media ecosystem.
At the sharp end of the industry, Monday’s announcement by North & South’s owner School Road publishing (the second outfit to rescue the magazine since Bauer closed it in 2020) of it disappearing from news stands and letterboxes told the same story.
School Road told RNZ: “On the back of flat advertising sales and increasing pressure from advertisers, we have decided it’s time to get serious about the digital offering for North & South. There is a lot of equity in the North & South masthead but it is without a digital platform in a digital world.”
North & South has been published since 1986, founded by Warwick Roger and Robyn Langwell.
Magazines have been hard hit producing and distributing paper copies around the country – both printing and, acutely, postage costs have risen steeply. The publisher of NZ Geographic has sounded the alarm over his own product’s looming financial pressures, outlining his finances for all to see to show that the publication urgently needs to boost digital subscriptions to survive.
The Crux site, set up by journalist Peter Newport, was an attempt at disrupting local news in the South Island and was an active player until economic conditions and the ongoing media industry struggle – with even digital revenues under threat from global platforms – led to a November 2 announcement it would go into hibernation. Stories are still appearing, but it intends to convert to a Substack newsletter.
North & South, NZ Life & Leisure, Crux and the 14 NZME regional community papers all had a strong focus on New Zealand beyond the main centres, so their demise will be seen and felt keenly around the country.
With NZME responding to its own Herald media column that it always keeps a sharp eye on costs, it could be that further jobs and products will be under threat as a soggy economy continues 2024’s woes into 2025. The mantra of some business people to ‘survive until 25’ could increasingly become ‘exist until 26’.
Meanwhile some in the industry continue to place their hopes on the Government passing its Fair Digital News Bargaining Bill which effectively tries to take money off Facebook and Google to prop up businesses that have not been able to compete with them for advertising.
However the bill, having disappeared altogether from Parliament’s order paper, was last seen at number 12 of the Government’s legislative priority list and could yet meet the fate of some of the country’s media products and mastheads – just quietly fading away.
Media Minister Paul Goldsmith says the bill will be back, but there is intense lobbying against it now from some in the media business who belatedly realise it could cause even more destruction should Facebook and Google stop running or linking to NZ news at all (as they have indicated). That would mean no legislated gain in revenue for local firms, plus a substantial loss (perhaps a third) of audience numbers sent to their sites by Google search.
As it stands, the global firms fear an open-ended demand on their money for news content they argue is a tiny fraction of their New Zealand revenues, and that serves to take viewers and readers in big numbers to the media sites, thus boosting their businesses.
One option, proposed in a think tank paper by former Herald editor-in-chief Gavin Ellis earlier this year, would be to instead legislate for a digital advertising levy that would take a small percentage of the global platforms’ NZ revenues and redistribute it to media firms, almost as a social good. It wouldn’t be directly linked to paying for news, and would not be an open-ended exposure for the platforms.
Increasingly, that looks like an option more likely to be acceptable to those platforms and deliver something practical for NZ media.