A better foreign owner for TV3 in an uncertain future

It was an open secret that MediaWorks was negotiating to sell its television arm to Discovery. Now that sale has been confirmed. Yes, it’s substituting one foreign owner for another but TV3 will be better off as a result of the sale.

The US-based Discovery group has an established record not only in subscription TV but also in linear broadcast. It is the owner of free-to-air channels across Europe including Norway, Sweden, Italy, Poland, Germany and the UK. Its digital portfolio includes Discovery Channel, HGTV, Food Network, TLC, Investigation Discovery, Travel Channel, Turbo/Velocity, Animal Planet, Science Channel, Oprah Winfrey Network in the United States, Discovery Kids in Latin America, and Eurosport, which carries the Olympic Games across Europe. Last year it signed a partnership deal with the BBC.

The sale will give TV3 (and its associated channels such as Bravo) access to content that will allow it to represent a credible alternative to TVNZ. Recent ratings have given the state-owned channels a somewhat untouchable status, in part a function of MediaWorks’ reluctance to put money into TV3 inventory.

The one surprise in the sale announcement (https://www.newshub.co.nz/home/new-zealand/2020/09/mediaworks-confirms-sale-of-tv-operations-to-discovery-inc.html) was that it included Newshub, the journalistic arm of MediaWorks. No doubt the lengthy negotiations determined that it would be more straight-forward for Discovery to provide a contract news service to MediaWorks’ radio networks than the reverse. There is sense in that approach, but Discovery will need to guarantee local editorial independence to allay staff, public and government anxieties. The last thing we need is one of our most important news operations being dictated to by a regional office in Sydney or Singapore, or from a head office in Maryland.

Discovery has been acquiring both broadcast and digital assets in different parts of the world for the past decade. The $US12 billion company is a relative minnow alongside the US220 billion AT&T/WarnerMedia (home of HBO and CNN) but it nonetheless ranks as a multinational creator and distributor of content. As a seasoned broadcaster, it is more likely to develop the New Zealand business than was a private equity company like MediaWorks’ current majority shareholder, Oaktree.

Assuming there are no last minute impediments, the sale will go through by the end of the year. What will remain to play out is Discovery’s ongoing relationship with Sky TV New Zealand, the platform on which its existing New Zealand assets – six pay-TV channels including Discovery Channel, TLC, Animal Planet, Food Network, Living and Discovery Turbo and two free-to-air channels HGTV and Choice TV – currently reside.

And, although TV3 may fare better with Discovery than with Oaktree, a change of ownership alone will not solve its problems nor, for that matter, the long-term prospects of Sky TV. Both are subject to the forces that demand a fundamental rethink of our media landscape.

If there is any need to justify a call for that fundamental rethink, it was provided last week by NZ on Air in its biennial Where are the Audiences? survey.

So, where are the audiences?

The landscape has changed dramatically since the Where are the Audiences? surveys began in 2014, and changed in ways that have not been matched by either government policy or media structures.

Comparing the results of the first survey with the latest draws into sharp relief just how much New Zealanders’ use of media has changed.

We knew traditional media were on the wane, but the numbers are a shock. A survey of the daily reach of media showed that in 2014 eight out of ten aged over 15 watched linear television where only six do so in 2020. Two-thirds of us listened to radio broadcasts but now only half of us tune in. Just over half the population read newspapers but now it is less than a third. More than half subscribed to pay TV and that, too, is now fast approaching a third. Almost a third read magazines but now only 14 per cent do so.

The decline in traditional media use has been driven, predictably, by the 15-39 age group. Their use of linear television declined from more than three-quarters to only 40 per cent and, where more than half listened to New Zealand radio stations, now only 40 per cent tune in. They were leading the move to online sources in 2014 with high uptake in streamed music and YouTube video (half to two-third). These were used by less than a third of older users who had hardly any use for some other digital services. Ten per cent of the younger age group were beginning to nibble at streaming video on demand services (they now make a meal of it – two-thirds in the age group are daily users) while older viewers were still wedded to linear broadcast television.

The latest report notes that if current trends continue then 2020 will be the crossover point where digital media overtakes traditional media in delivering the largest daily audiences in New Zealand. It also sounds a warning that Māori and older people are being left behind.

There is absolutely no reason to doubt these trends will continue. Look at the numbers. 

In 2014 only six per cent used streaming video on demand and now almost half of us use it. Fewer than a third watched online video of platforms like YouTube and Facebook but now 60 per cent access it. YouTube alone captures more than half the population with its combinations of online videos and music. We didn’t even have a local version of Netflix in 2014 but now more a third of the population watches it. And TVNZ’s share of that on-demand audience has tripled in that time to now reach 21 per cent of the audience.

Once again, the 15-39 age group lead the trend: They far outstrip the older age group in the use of online video clips, streaming video, music streaming and gaming  but the survey notes that the age differentiation is blurring. The use of New Zealand on demand video, for example, is same for both age groups (around a quarter of us access it in 2020).

Among 60+ year olds, traditional media remains dominant and stable in size, with digital media not growing significantly to close the gap.

The NZ on Air audience data form a rich mine of media trends but they all point to one inevitable conclusion: These seismic shifts in behaviour have not been matched by changes to the structures and policies that need to surround them.

New Zealand – in common with much of the world – has tried to accommodate fast-moving mutations in supply and preference. Perhaps things altered so fast that we felt a fundamental rethink of the landscape was pointless because too soon it would be obsolete.

We have six years of solid data on which to draw. Now those trends must be reduced to their fundamentals – the drivers of innovation and behaviour – to provide the foundations for structures that are better able to sustain the audience’s media needs and preferences. They would replace organisations that – even if they have had ‘modernising’ name changes – were designed around systems that arrived in New Zealand between 60  and 180 years ago.

Last week this column lamented the lack of media policy as we head into a general election. Earlier it carried a plea for the convening of a national conversation – a Bretton Woods #2 –to recalibrate our media systems. That rebirth was beyond the brief of the “Where are the Audiences” survey but, surely, we can hear the alarm bells that it is sounding?

But don’t write them off…

In spite of the inexorable slide of traditional media in the audience stakes, it only takes a pandemic to show we shouldn’t write them off.

The Where are the Audiences  survey showed that when the chips are down, people turn to trusted traditional sources.

The daily TVNZ 1 Covid-19 updates were New Zealanders’ most widely used (47%) and most trusted source of news (28%) by a significant margin. Stuff was the second most widely used (26 per cent) and the New Zealand Herald was ranked third (each, however, was ‘most trusted’ by only four per cent). The official Covid-19 website was the second most trusted source (eight per cent). Social media was widely used, but it was the most trusted source of very few New Zealanders. Those posts from friends and family were ‘most trusted’ by only one per cent.

Name suppression

Last week a 22-year-old man who admitted assaulting two young men at a Young Labour summer camp won his bid for permanent name suppression. The Court of Appeal found the man could be subjected to vilification on social media if his name was revealed.

Those grounds were certainly worthy of comment and the Tuesday Commentary was preparing to wade into the debate. However, Alison Mau in the Sunday Star Times rose to the challenge first and addressed the issues so well there is no need to do more than ask that you read her column: https://www.stuff.co.nz/national/crime/300099878/final-act-of-labour-youth-camp-case-could-be-a-gamechanger

Infantilisation

“Infantilisation” is not a word you see often in a newspaper but I got Andrea Vance’s drift. She was writing, again in the Sunday Star Times, about the deliberately demeaning use of the child-like diminutive ‘Cindy’ when discussing the Prime Minister Jacinda Ardern. I completely agree with her view that “if sexist name-calling is all they’ve got, then she has already won the argument.” Her column is also worth reading: https://www.stuff.co.nz/national/politics/opinion/122658284/shes-not-a-doll-so-dont-call-the-prime-minister-cindy

5 thoughts on “A better foreign owner for TV3 in an uncertain future

  1. Hi Gavin. Regarding your surprise that Newshub was part of the acquisition, perhaps this article will shed some light on it: https://www.theguardian.com/media/2020/aug/29/rivals-plan-fox-news-style-opinionated-tv-station-in-uk. Discovery’s owner, Liberty Media, is connected to a Fox News-style startup in the UK. No doubt they’ll be looking for syndication partners. Given the polarising role of the Fox news model in its home market, you might have to revise your headline – ‘A Better Foreign Owner’ – if that’s what we have in store here.

    1. Martin, You seriously overstate the connection there. Discovery is NOT owned by Liberty Media. Liberty’s owner, John Malone (aged 79) holds 28 per cent of the stock of Discovery and is on the board but Discovery has no operational connection with that group and is certainly not connected with GB News or All Perspectives. The sort of connections you are making are not supported by the facts. Discovery’s latest formal corporate filing on risk factors states: “Liberty Media, Liberty Global, Liberty Interactive, Liberty Broadband and LLA (together, the “Liberty Entities”) own interests in various U.S. and international companies, such as Charter Communications, Inc. (“Charter”), that have subsidiaries that own or operate domestic or foreign content services that may compete with the content services we offer. We have no rights in respect of U.S. or international content opportunities developed by or presented to the subsidiaries of any Liberty Entities, and the pursuit of these opportunities by such subsidiaries may adversely affect our interests and those of our stockholders.”

  2. I’ll be watching developments on Three with interest. Looks a better place for the private television than ownership by an Australian private equity and a US hedge fund. However TV3 has previously had a foreign media owner, CanWest for 10 years before they cashed up.

    The issue of name suppression is perhaps the biggest change since the repeal of Martin Finlay’s Name Suppression Act, which for 10 months in 1975 automatically suppressed the names of all appearing before courts, until they were convicted.

    I have less issue with the name suppression for the Labour Party youth camp organiser, who wasn’t convicted and it echoes the intent of the original act, passed in 1920, to protect first time, young offenders from public shame and being unable to secure a job in the future. https://www.stuff.co.nz/national/crime/117058919/name-suppression-how-the-uniquely-kiwi-hush-hush-policy-became-law-and-morphed-over-a-century

    Murder was excluded from name suppression in that original act but today the killer of Grace Millane still cannot be named, nor have the courts given a reason for suppression being continued following his conviction. The most likely reason is that it would “create a real risk of prejudice to a fair trial”, which presumes he is facing other serious unrelated criminal charges. More sinister would be if his name suppression is due to “Prejudice the security or defence of New Zealand.”

    His appeal against conviction and sentence is still proceeding. It will be interesting to see if name suppression is again extended after that. Have any media in New Zealand challenged the suppression in court?

    1. The reason for suppression in the Millane case is, as you point out, currently suppressed. However, my knowledge of the case suggests the judge has made a perfectly valid determination and that is the reason media have not challenged it. As for the Labour Party case, I thought Alison Mau canvassed some interesting arguments in her column that were worth drawing to people’s attention.

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