MUST READ: Professor Wayne Hope – Our Public Media Crisis

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As co-director of the Journalism Media and Democracy (JMAD) Research Center, I can announce the publication of our 2019 New Zealand Media Ownership Report. Since 2011, these reports have been written by AUT Communications Lecturer Merja Myllylahti, a former London financial journalist. The underlying trends she has documented – in media ownership, media business models and media policy – have now erupted to the surface. New Zealand’s entire media system is in crisis and public media institutions are struggling to survive. What follows is a step-by-step analysis of where we stand and what might be done. 

Media ownership and the mediated public sphere

Evaluations of media ownership patterns should invoke public sphere principles. Such principles advance the democratic freedoms of representation, assembly and expression. Putting such freedoms into practice opens up public spheres of communication in the face of anti-democratic forces and ideologies. This general conflict unfolds in politics, law, educational institutions and cultural activity. Public sphere principles are threatened to a greater or lesser extent by fundamentalist religion, state authoritarianism and unaccountable corporate power. 

The mediated public sphere of print, broadcasting and digital communications is endangered by the same forces. The power that corporations exert over media institutions and media content is not readily apparent. This is why media ownership is particularly important. In private media domains, dominated by a few wealthy owners, plurality of content can diminish gradually. Budgetary restrictions on investigative journalism are hard to spot. And, the commercial saturation of media space through advertising, product placement and sponsored content just seems normal. Consequently, non-commercial public forms of media can be positioned as a tax-funded expense. Corporate restructurings of news budgets, news rooms and journalists’ career paths are rarely headlined. Meanwhile, the economic power of media corporates and their institutional shareholdings translates into substantial political influence. Let us now consider the New Zealand experience.

NZ media ownership trends

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From the late 1980s, Labour and National governments enabled transnational media conglomerates to colonise the national media domain. After TV3 began transmission in 1989, its financial insolvency allowed Canadian media conglomerate CanWest to accumulate a controlling share. Similarly, Sky Television became a transnational corporate vehicle as Newscorp-controlled Independent Newspapers Ltd (INL) eventually became the largest shareholder. The privatisation of Telecom in 1990 allowed American buyers Bell Atlantic and Ameritech to dominate telecommunication infrastructures and markets. 

At the same time, the lifting of foreign restrictions on national media ownership accelerated transnational incursions. In 1996, Clear Communication (US), APN News & Media (Australia) and a local Wilson & Horton consortium acquired Radio New Zealand’s 41-station commercial network. From 1995 to 1998, Wilson & Horton, local owners of the New Zealand Herald relinquished their shares to Independent Newspapers Plc ((INP, later to be called to Independent News & Media (INM)). In April 2001, INP sold its shareholding to APN News & Media. By then, CanWest’s holdings included TV3, TV4 plus half of all commercial radio stations. In June 2003, Fairfax Holdings paid NZ$1.88 billion for INL’s press and magazine titles. Fairfax was Australia’s largest print and media group with a then NZ$10.2 billion evaluation. In 2006, they paid NZ$700 million for TradeMe in order to increase online holdings, exploit electronic commerce and capture the migration of classified advertising. 

In 2010, one year before JMAD’s first report, four major transnational players dominated the New Zealand media market: APN News & Media, Fairfax Media, News Corporation/Sky and MediaWorks. The latter company was originally a CanWest vehicle for its television and radio holdings in New Zealand. In 2007, CanWest’s 70% stake was sold to HT Media as a subsidiary of Australian private equity group, Ironbridge Capital for NZ$790 million. This exemplified a new phase in the transnational colonisation and commercialisation of domestic media. Financialisation had arrived in the form of banks and unlisted financial institutions (hedge funds, private equity). As successive JMAD reports have revealed, private financial entities regard media companies not as structured wholes but as assemblages of business units that ought to be continually restructured. The key metric here is not profit per se but the rate of profit; short-term returns trump long-term investment in media assets. 

For APN News & Media from 2010 to 2012, financial control of their major holdings rose from 22.6% to 55.6%. In 2012, Fairfax divested TradeMe to multiple financial institutions. In 2013, when Newscorp sold its stake in Sky Television, financial institutions filled the gap. In late 2016, Newscorp’s sold all of its shares in NZME (the renamed New Zealand division of APN News & Media). In November 2016, over 85% of the company’s shares were owned by investment banks and funds management companies. JMAD’s NZ Media Ownership report for that year found that all commercial media corporations were primarily owned by financial institutions. 

The MediaWorks debacle

The MediaWorks story illustrates how financial media ownership drives a business model which undermines the journalistic public sphere. Ironbridge and HT Media’s acquisition of the company was hardly a business success. After the 2008 global financial collapse and global recession, falling advertising revenues worsened MediaWorks’ financial position. In the year to 2009, it posted a NZ$314 million loss. Subsequently, Ironbridge swapped its own financial debt for equity injections from Goldman Sachs, the Royal Bank of Scotland (RBS) and the Bank of New Zealand (BNZ). By mid-2012, MediaWorks’ debt restructuring involved two major debt holders – TPG Capital and Oaktree Capital Management. The latter group bought NZ$125 million worth of MediaWorks’ debt from RBS and BNZ. By late 2013, MediaWorks was owned by Oaktree Capital (26.7%), RBS (21.9%), TPG Capital (14.7%), Westpac (14.6%), RABO Bank (14.6%) and JP Morgan (6.5%). Oaktree Capital raised its ownership stake to 43% in 2014 and 100% in May 2015. 

These short-termist financial manoeuverings were accompanied by an anti-public sphere business model. The fate of Campbell Live illustrates this. The programme began in March 2005 at 7.00pm. The show was always a commercial/public hybrid – interviews with politicians and public figures and issue-driven stories mingled with lighter infotainment pieces and programme sponsorship. The then owner of TV3 and TV4, CanWest, exemplified the North American model of commercial television, each successful network required a high profile news brand and news presenter(s) to push prime time ratings. 

Under the financial imperatives of Oaktree Capital, however, Julie Christie, Mark Weldon and other MediaWorks managers favoured multiplatform broadcasting, low-cost reality television shows and infotainment programmes with a skeletal staffing structure. The phrase ‘current affairs’ as a descriptor of vacuous infotainment product was maintained to obscure the objectives of restructuring and to taint Campbell Live’s accomplishments as a dated, tiresome form of the genre. The programme’s investigative journalism was regarded as a liability that stretched viewer patience. For example, ongoing coverage of the November 2010 Pike River explosions and resulting controversies was denigrated as a cause of viewer fatigue. The last episode of TV3’s Campbell Live in May 2015 signalled the end of prime time current affairs on New Zealand television.

Despite the new business model and programme mix, MediaWorks continued to struggle financially. In 2017, they reported a substantial loss in the financial year ending 2016. Key broadcasters and managers were lost as the television and radio arms returned an operating loss of NZ$15 million. The former holdings were the least lucrative. In the financial year 2017 Mediaworks television holdings gene NZ $130 compared to the radio holdings revenue of $NZ159 million.. 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. If Quadrant receives the final approval to buy QMS, MediaWorks will once more become a full private equity-controlled company. Oaktree Capital still holds 60% of MediaWorks shares. 

Given the history I have outlined, MediaWorks’ recent decision to sell its television network should surprise nobody. After years of private equity profit extraction, financial loss for television assets, staff retrenchment and lowest common denominator programming, the end is nigh. 

Public media under siege

The financialisation of ownership does not entirely explain MediaWorks difficulties. As Peter Thompson has noted, scheduled television’s share of advertising spend in New Zealand has declined from 34% in 1998 to 21% in 2018. He calculates that if television`s share of the advertising market had been sustained at 34%, “MediaWork`s current share of that revenue stream would be generating NZ$200 million in income”. The revenue foregone is absorbed by Google and Facebook. Digital/online advertising is now worth NZ$1 billion, about 40% of New Zealand`s entire advertising turnover (MediaWorks Television: death of a thousand cuts, the Policy Observatory, November 5). Meanwhile, broadcasting audiences are fragmenting. In the last five years, the daily reach of free-to-air scheduled television has declined (Where are the audiences? NZ On Air, 2018). Clearly, more people are accessing content through on-demand, online, mobile platforms. Further, Netflix and other streaming services, combined with Sky`s subscription channels, eat into scheduled television’s audience share. 

In this commercial environment, indepth news content and local drama are barely sustainable (NZ on Air funding notwithstanding). The plight of public media generally was made worse by successive National administrations. From 2008, they withdrew funding from TVNZ’s 6 and 7 channels, froze funding for National Radio and abandoned earlier plans for a converged media regulator developed by the Ministry of Culture and Heritage. National regarded free-to-air broadcasting networks as ‘legacy media’ with no special relevance or funding priority. Enthusiasts for public media content could make do with the internet and streaming services.

Print media is also under siege. As this year’s JMAD report reveals, New Zealand Herald circulation figures fell 8.3% compared to the same period in 2018. Other titles were similarly affected. Circulation for the Press, Otago Daily Times and Dominion Post fell by 14.4%, 3.7% and 13.3% respectively. The Sunday Star Times circulation fell by 12.99%. The net effects of this general trend have been devastating. Over the past decade, APN News & Media (NZME) and Fairfax (renamed Stuff after January 2018) laid off staff, integrated newsrooms, cut down print editions and closed regional titles. After April 2019, the New Zealand Herald restricted online public access by introducing digital subscriptions for its premium content. 

Public media has not entirely disappeared. Since 2014, Māori Television has revitalised the Māori public sphere through its programming and Te Reo services. The emergence of Newsroom, Scoop, the Spinoff and assorted blog sites has created online public spheres of communication. Mainstream mass media, however, remains important. Generations of taxpayer money has funded radio and television infrastructures and trained journalists. These mediums of communication still interlink government and citizens amidst a broader media ecology. In any case, mass public media are rapidly developing their own digital platforms and services. They must be adequately financed and protected from corporate commercial intrusion. 

A new public media entity?

The present government deserves some credit. They sense that public media is in crisis, even though they do not fully understand the causes and consequences. Three weeks ago, news leaked that the government was seeking to combine TVNZ and Radio New Zealand within a new multi-platform public service entity. The popularity of TVNZ 6 and 7 before their demise demonstrates that commercial-free public service television could work. Back then, schedules included news and current affairs, children’s shows along with programming covering arts and literature, politics and community issues. The viability of any proposed public model will depend on legislative support, organisational structure and funding sources. The new entity should, at a senior administrative level, identify exactly what services are to be insulated from commercial pressures. In regard to television, my preference is to strictly ring fence TV1’s operations and allow TV2 to operate commercially. The philosophy of public service broadcasting across all relevant stations, channels and platforms should be clearly stated and legislatively entrenched. Then, if a future National government wants to dismantle the entity, they must do so publicly in parliament against mobilised opposition. The board of this new combined entity must be independent, as was the case when TVNZ and Radio New Zealand were newly established under the Fourth Labour Government. Of course, there will be devil in the organisational detail. To what extent will Radio New Zealand and TVNZ newsrooms be integrated? Should digital platforms be partly or fully shared? As for funding, well, this should come from general taxation and dedicated resources for local programmes and investigative journalism. Dare I mention a dedicated tax on social media companies? It’s time for this government to move. 

 

8 COMMENTS

  1. We agree Labour need to get this media “voice for the public” fixed now!!!!!

    As 2020 is really “their year of delivery” not 2019 which was a flop.

    Or Labour will follow behind and will surely die in the same hole of obsessiveness as Allianece/Social credit/TOP/United party/ACT/Maori party/ and all others before them have.

    In regard to television, my preference is to strictly ring fence TV1’s operations and allow TV2 to operate commercially. The philosophy of public service broadcasting across all relevant stations, channels and platforms should be clearly stated and legislatively entrenched. Then, if a future National government wants to dismantle the entity, they must do so publicly in parliament against mobilised opposition.

  2. Yes. Ok then.
    Brilliant. Thank you from this humble commenter Professor Wayne Hope.
    You’re shining a glaring-bright beam of light into the very rat’s nest’s in the infested AO/NZ woodpile.
    “ JMAD’s NZ Media Ownership report for that year found that all commercial media corporations were primarily owned by financial institutions. “

    As I’ve been urging in my own agricultural way…
    All foreign banks, money lenders and fancy interest rate swappers, swindlers and grifters. Out!
    Off, you fuck. And no. You can’t take our money with you. In fact, you’ll be stripped of all cash, and non cash assets, investments and infrastructure to be liquidated then returned to the AO/NZ’ers you swindled it from. ( And now that, that’s done? How about we find those traitors here who sold us out to you’re evil kind. A nice wee royal commission of inquiry. And they’d be lucky with that. In some countries, one might argue, they’d be gunned down in the streets. No offence to actual streets intended.

    “strictly ring fence TV1’s operations”
    Absolutely.
    A publicly funded media? Gauging from the above? There’d be no better a $-return for our tax revenue.
    Again. An awesome Post.

  3. Appreciate the insight Wayne.

    As for the media as a whole, I suppose it could be put this way, ‘Our education system has been dumbed down to a point, to appease privatisation, privateers, capitalists the ability to outsource and privatise the education system to the point all professions are affected by this same disease?’

  4. Another great post by Wayne Hope. But the horse has bolted, the brainwashed majority in this country does not care a shit anymore, they just want feelgood entertainment and infotainment, full stop. Critical reporting and deep thinking stuff does not appeal to them. They just slap on the sunscreen and drive to the Malls and beaches as per usual, in their nice SUVs, never mind the true challenges of climate change and so forth.

    We have allowed endless IDIOTS to be bred, unfortunately they are allowed to vote, thus another NATACT government is looming, firmly locking this country into the dinosaur mentality society that so many adhere to.

    What a shame, this country is LOST.

    • It may yet get worse than entrench mere indifference.
      If you want to see the full horror of the commercial model and promotion of stupidity just look at what Fox News has done and is doing in the USA.

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