• Written by Merja Myllylahti, Co-Director JMAD research center, Auckland University of Technology
New Zealand's commercial broadcasters are in trouble and the government is considering a complete restructure of public broadcasting. from www.shutterstock.com, CC BY-ND

New Zealand’s broadcasting sector, both public and commercial, is facing the biggest structural upheaval in a decade.

The latest report on New Zealand media ownership, compiled by the Journalism, Media and Democracy Research Centre, shows the country’s commercial television broadcasting sector is in serious trouble. In October, commercial TV broadcaster MediaWorks put its television arm up for sale. The pay-television company Sky TV invested heavily in rugby broadcasting rights, but without paying a dividend to shareholders.

Public broadcasting faces an even bigger change as the government ponders a complete restructure. The proposal is to disestablish both the public interest radio broadcaster RNZ (Radio New Zealand) and the commercially funded television broadcaster TVNZ to create an entirely new public media entity.

TVNZ chief executive Kevin Kenrick has argued the government’s intention is to “strengthen the public media – not weaken commercial media”. But the likely consequences will be the loss of hundreds of journalism jobs and less quality news.


Read more: Nine-Fairfax merger rings warning bells for investigative journalism – and Australian democracy


Doing nothing is not an option

The restructuring of state-owned broadcasting comes on the back of TVNZ’s earlier announcement that it will not pay a dividend to the government – even though its only mandate is to make a profit and pay that dividend.

The government is expected to announce its plans for the new public media entity before Christmas. Its advisory group has suggested TVNZ and RNZ operations should be disestablished and a mixed funding model used to support the new broadcasting company. A mixed model would allow the broadcaster to fund parts of its operations through advertising, sponsorships and partnerships. It remains to be seen if the government follows that advice.

The Swiss Broadcasting Corporation has a mixed funding model, but last month confirmed plans to reduce its workforce by 200 as one of several measures to tackle its financial crisis. Whatever broadcasting model emerges in New Zealand, Prime Minister Jacinda Ardern has said doing nothing is not an option.

In many countries, including Ireland, public broadcasters have already hit an “existential financial crisis”. In 2019, Ireland’s public broadcaster, RTÉ, warned it would not survive without a government rescue plan. In 2018, Danish public broadcaster DR announced up to 400 job cuts and closures of three television channels and three radio stations as part of a media reform package.

Commercial broadcasting in dire straights

New Zealand’s commercial broadcasting news operations are in serious trouble as a consequence of streaming services flooding the market. In this environment, monetising television viewers has become ever more challenging.

My research in digital journalism shows media companies and platforms compete for attention, which has become a scarce and fluid commodity.


Read more: Attention economy: Facebook delivers traffic but no money for news media


In this context it’s not surprising MediaWorks is trying to sell its television arm. At the time of writing, no buyer had emerged for the loss-making television business.

The pay-television company Sky TV is also struggling as it competes against telecommunications company Spark in sports broadcasting. Sky’s business model has been affected by a number of streaming services entering New Zealand (including Disney+ and Apple TV).

In November, Sky TV warned that its 2020 revenue will fall NZ$45 million compared to 2019. For the financial year 2019, the company did not pay a dividend to shareholders. Its share price fell 66% between November 2018 and November 2019.

Private equity influence

While the fate of public broadcasting is in the hands of the government, the future of the commercial television sector will be decided by private equity firms, investment managers and financial shareholders.

This means potentially more asset stripping, job cuts and restructuring of businesses. As many have observed, private equity firms have become ruthless media barons as they attempt to extract value out of already distressed media assets. Since 2011, the New Zealand Media Ownership reports have warned that media companies are vulnerable as private equity financiers do not have an interest in news or newsrooms.

In 2019, Australian Quadrant Private Equity and American Oaktree Capital have become joint owners of MediaWorks. Quadrant announced it was buying Australian outdoor advertiser QMS, which has a 40% stake in MediaWorks. Oaktree Capital remains the company’s largest shareholder with a 60% stake in the company. If MediaWorks’ owners fail to sell its television business, it will likely close, with hundreds of jobs at risk.

Two financial institutions, Scottish asset management firm Kiltearn Partners and British fund manager Jupiter Asset Management, are also the largest shareholders of Sky TV. The company is considering a restructure which could affect 250 jobs.

New Zealand’s media ecosystem may be on the verge of collapsing, not just in the broadcasting sector. The merger of New Zealand’s two largest news publishers – NZME and Stuff – is back on the agenda. Back in 2017, the Commerce Commission rejected the merger, but as media company profits and revenues continue to shrink, NZME confirmed last month it was in talks with Nine Entertainment to buy Stuff.

Should the merger go through this time, it would bring massive job cuts and most certainly less quality news coverage in New Zealand.

Merja Myllylahti does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Authors: Merja Myllylahti, Co-Director JMAD research center, Auckland University of Technology

Read more http://theconversation.com/job-losses-expected-as-nzs-broadcasting-sector-faces-biggest-overhaul-in-a-decade-128447

Best Road trips Tours You Might Take in 2020/2021

You probably know that a great road trip provides the level of adventure and pleasure like few other things. Not only do you get a lot of freedom, but you might also realise that it’s much che...

Diana Smith - avatar Diana Smith

3 Fall Landscaping Ideas to Keep Your Yard Looking Good

The leaves are falling, which means your yard is a mess. Check out these 3 fall landscaping ideas to keep your yard looking good year-round. In about a month fall leaves will begin to cover your ...

Sarah Williams - avatar Sarah Williams

The Victorian government has allocated $60 million to mental health. But who gets the money? 

The second wave of the coronavirus and the resulting restrictions have impacted all Victorians. Many are struggling, but some are struggling more than others. In response to the increasing number of p...

Chris Maylea, Senior Lecturer, Law and Social Work, RMIT University - avatar Chris Maylea, Senior Lecturer, Law and Social Work, RMIT University

Got someone with coronavirus at home? Here's how to keep the rest of the household infection-free

ShutterstockAlthough some positive signs suggest Victoria’s second wave may be slowing, we continue to see large numbers of COVID-19 cases recorded every day. Most people who test positive for C...

Thea van de Mortel, Professor, Nursing and Deputy Head (Learning & Teaching), School of Nursing and Midwifery, Griffith University - avatar Thea van de Mortel, Professor, Nursing and Deputy Head (Learning & Teaching), School of Nursing and Midwifery, Griffith University

Want to see a therapist but don't know where to start? Here's how to get a mental health plan

ShutterstockLast week, the Australian government announced it will provide ten extra Medicare-subsidised psychological therapy sessions for Australians in lockdown areas due to COVID-19.In such a stre...

Louise Stone, General practitioner; Clinical Associate Professor, ANU Medical School, Australian National University - avatar Louise Stone, General practitioner; Clinical Associate Professor, ANU Medical School, Australian National University

A new community case of COVID-19 in New Zealand is a matter of when, not if. Is the country prepared for it?

AAP/Nick PerryOur latest modelling shows New Zealanders need to redouble their efforts to keep track of people they meet, if we are to have a chance of controlling any re-emergence of COVID-19.The dir...

Michael Plank, Professor in Mathematics, University of Canterbury - avatar Michael Plank, Professor in Mathematics, University of Canterbury

Young men are more likely to believe COVID-19 myths. So how do we actually reach them?

ShutterstockIf the media is anything to go by, you’d think people who believe coronavirus myths are white, middle-aged women called Karen.But our new study shows a different picture. We found me...

Carissa Bonner, Research Fellow, University of Sydney - avatar Carissa Bonner, Research Fellow, University of Sydney

No, the extra hygiene precautions we're taking for COVID-19 won't weaken our immune systems

ShutterstockDuring the COVID-19 pandemic we’re constantly being reminded to practise good hygiene by frequently washing our hands and regularly cleaning the spaces where we live and work.These p...

Vasso Apostolopoulos, Pro Vice-Chancellor, Research Partnerships, Victoria University - avatar Vasso Apostolopoulos, Pro Vice-Chancellor, Research Partnerships, Victoria University

How to keep your contact lenses clean (and what can go wrong if you don't)

ShutterstockYou’re rushing and accidentally drop a contact lens on the bathroom floor. Should you:a) run it under the tap and pop it in?b) spit on it and do the same?c) use the cleaning solution...

Nicole Carnt, Scientia Senior Lecturer,  School of Optometry and Vision Science, UNSW, Sydney, UNSW - avatar Nicole Carnt, Scientia Senior Lecturer, School of Optometry and Vision Science, UNSW, Sydney, UNSW



News Company Media Core

Content & Technology Connecting Global Audiences

More Information - Less Opinion