Dear readers, a belated happy New Year and welcome to issue 23 or our newsletter, rather aptly our first of 2023! You can forgive us for being slightly slow out of the blocks – no sooner did we have our feet under our desks in January, when Auckland and much of the upper North Island was hit with the severest flooding in recent memory.
However, 2023 hasn’t been slow to get rolling – it feels like we’ve had a year’s worth of events in just two months. Besides historic flooding and a record-shattering cyclone, it’s already delivered a new Prime Minister and Cabinet reshuffle, and a tranche of policies from the Ardern era either being binned, watered down, or put on the back burner.
PM Chris Hipkins, or Chippy as we have quickly come to refer to him, announced roll-backs last month on a number of policies. In particular, the total scrapping of the TVNZ/RNZ merger and a controversial hate speech clause in The Human Rights Amendment Bill are relevant to our sector. Instead, it will be referred to the Law Commission for guidance. The politically charged Three Waters reforms will probably see further changes in the coming weeks and months.
It’s also likely to be an interesting year for media given recessionary challenges and an election in October heating up public debate. So, let’s dive in.
Media merger first on the bonfire
The biggest media reforms in decades – a merger of TVNZ and RNZ – has been canned. First announced in Budget 22, the proposed new media entity was to be the beneficiary of significant government funding, with $372 earmarked over three years.
When announced, former Broadcast and Media Minister Kris Faafoi said the support was aimed at ensuring Kiwis would “continue to access quality local content and trusted news”.
But the proposed reforms came at a time when the public was debating media bias and government funding of journalism and the merger was mired in concerns about editorial independence from the government, among other things.
Hipkins said that support for public media “needs to be at a lower cost and without such significant structural change”.
However, RNZ, which previously got just over $35 million a year in government funding, will receive additional funding to strengthen its public media role. NZ on Air, which was always the most important player for delivering funding for local television, radio and digital media, will get something from the pot, too.
“That funding will be available to a wider range of broadcasters. Remaining funding will be redirected to other Government priorities,” Hipkins said.
About $23 million was allocated to the scrapped reforms last year, although apparently not all of it was spent. We’ll have to wait for the washup to find out.
MediaWorks signals layoffs
An email from Cam Wallace in late January informed staff that up to 90 jobs could go at MediaWorks due to recessionary pressures late last month.
“As with many businesses in New Zealand, we are not immune to the impacts of the current economic factors [including] a likely recession this year, which will see a dampening demand from advertisers across the board,” he wrote.
The email stated that two thirds of MediaWorks’ costs were labour related.
Wallace said the company would undertake a review of the operating model and reduce the workforce by up to 90 jobs. He acknowledged this would be unsettling for many and offered to support staff throughout the process.
“Between now and the end of March we will be consulting with teams across MediaWorks and aim to do this as transparently as possible,” he said.
Cam himself then upped sticks, announcing last week a return to his first love – the airline industry. Cam has been appointed CEO of Qantas International and Freight.
Chat GPT and the media landscape
Launched only a couple of months ago, ChatGPT (Chat Generative Pre-trained Transformer) is already making waves. The chatbot developed by OpenAI can read information, digest it and start to “spit out answers” in a convincing but not necessarily factual way.
Duncan Grieve, who until January was chief executive of The Spinoff, raised the issue on his informative The Fold podcast recently. ChatGPT can create very convincing and engaging content, but is often not accurate.
If the chatbot is used to generate news reports, with the ability of platforms and influencers to attract large numbers of views without traditional vetting, this could lead to a distortion in perception and of what is generally accepted as fact, he speculated.
“This stuff is really confronting, it’s happening really fast. Sometimes it feels like politicians are fighting yesterday’s war,” he said.
Society needed to begin to grapple with its complexity and implications, he noted.
“For all creators in this modern economy, the incentives are around volume … I played around with it, the writing is better than a lot of what you see in commodity news. It’s very convincing, but like I say, it’s just not accurate.”
Original content creators may also be disadvantaged by the technology, which can gobble up media and re-create it, without acknowledgement.
The demise of Spark Sport triggers price hikes for Sky Sport
In mid-December Spark announced that TVNZ would become the home of the majority of Spark Sport content, subject to a rights holder agreement, from July this year.
Escalating content rights costs and a broader range of investment opportunities across its business were cited as motivating the decision to exit the sports streaming market.
The Spark Sport platform licensed from iStreamPlanet is also going in the second half of 2023, requiring Spark to invest in a new platform and transition customers in order to continue operating the service.
Chief executive Jolie Hodson said that since entering the sports streaming market in 2019 it had been challenging to reach the scale it aspired to, particularly with pandemic restrictions causing major disruption to sporting codes globally, just one year after it launched.
“That slower than expected start, coupled with the escalating costs of content rights globally, makes it difficult to justify the type of investment Spark Sport requires when we have a wider range of investment opportunities across our broader business,” she said.
A month later Sky TV announced it would increase Sky Sport costs to $3 a month from March. The price of its Sky Sport Now streaming app was upped by $5 a month. However, it denied it had anything to do with lack of competition.
Looking ahead
As we try to read the tea leaves for the year ahead, it’s clear that our industry will play as important a role as ever. Whether you’re an embattled mayor, a reserve bank governor, a bloke named ‘Chris’, or a business leader managing the vagaries of economic headwinds, not only your decisions but the way you communicate those decisions will pave the way for success.
