This country needs to be at a watershed when NZ on Air asks Where are the audiences? in 2025.
The trends in its latest biennial report, released last week, suggest that by the time it next surveys New Zealand audiences we will have reached a point where traditional institutional concepts of media are no longer sustainable.
Between now and 2025 we need a fundamental rethink of media business models, organisation, and regulation. And the thinking will have to have been translated into action if we are to avoid systemic failures.
The Where are the audiences? survey has been monitoring media use since 2014, mapping trends that have seen the rise of competing digital services and the steady decline of traditional broadcasting. You can access the 2023 report here.
Along the way there have been numerous crossover points but the latest survey notes what may be the most significant crossover in the nine year history of the research. For the first time, broadcast television no longer commands the majority of viewers in prime time between 6 pm and 10.30 pm. Also for the first time, New Zealanders overall are spending more time using digital media than traditional media.
Even allowing for the disruptive effect of the Covid lockdowns, the trends for traditional broadcasters are leading inexorably down the same ski slope that print media faced more than a decade ago.
Straight line projections of current trends would put television viewing (currently around 50 per cent) at about 40 per cent, and radio below 30 per cent (39 per cent in 2023) by 2025. In the same timeframe online video use (now 68 per cent) would hit the 80 per cent mark and streaming video on demand would rise about eight percentage points to 65 per cent.
A similar straight line projection would put TVNZ1’s audience at around 27 per cent and TV3’s at a life-threatening 14 per cent. And that will call into question the programme funding that passes through NZ on Air to both organisations. On average over the past five years TVNZ has received about half the available scripted and factual funding and Warner Bros. Discovery around 20 per cent. In order to continue to merit funding support for programming, traditional broadcasters must take a binary approach that includes significant digital reach.
In fact, the combined tv and on demand reach of the broadcasters has not changed much since the last survey, reaching roughly two-thirds of New Zealanders., However, the mix has changed significantly, with tv-only dropping by a third in two years.
Radio is set to fare little better than linear television. Apart from slight increases by More FM and The Hits, all radio stations showed audience decline in the latest survey. If the trend is extrapolated, radio audiences would be projected to drop by almost ten percentage points over the next two years, to sit at 30 per cent of the total audience.
In fact, commercial broadcasters face a double bind: Not only are they losing audience, but that audience is ageing. Both are indicators that make advertisers screw up their noses.
People aged 60-plus continue to be the most loyal audiences for traditional television and radio. That is not very encouraging for advertisers (or more likely the bright young things in ad agencies) who set their sights solidly on the 18-54 market. And even that age group is starting to turn away from traditional sources as it becomes more digital savvy.
Nor is non-commercial broadcasting free from the chill winds. RNZ national lost almost a third of its audience share in the latest NZ on Air survey to now sit at only eight per cent of the available audience. The gap between it and NewstalkZB has once again closed, with the state broadcaster ahead by only one percentage point.
Another survey last week showed that print media were faring little better than broadcasters.
The latest Nielsen newspaper readership survey shows the New Zealand Herald shed a whopping 53,000 readers or nine per cent year-on-year to now stand at 545,000. The Post’s percentage losses were not far behind, losing 11,000 readers to now stand at 128,000. The Waikato Times’ loss of almost 24 per cent (now 58,000) must be a concern to Stuff but at least The Press is holding steady on 113,000 readers. Further south, the Otago Daily Times recorded a small decline to stand at 95,000 readers.
In the Sunday market, the Herald on Sunday mirrored its daily stablemate, dropping 55,000 readers – almost 16 per cent – to stand at 291,000. Its main opponent, the Sunday Star Times dropped by a similar percentage to stand at 198,000 readers. The surprise was the Sunday News which inexplicably rose more than 10 per cent to 133,000 readers.
At least the weekly magazine market is showing reasonable stability, although the New Zealand Listener (216,000 readers) has shed its gains of a year ago. TV Guide and Woman’s Day are stable and the New Zealand Woman’s Weekly has recorded a modest gain (to 457,000).
However, weekly magazines are no indicator of better times ahead for all traditional media: The graphs are going in the wrong direction.
These media organisations won’t be happy with the results, but they will not be surprised. All are trying to move into digital growth areas but, apart from NZME’s digital subscriptions, none is – so far – a financial winner.
TVNZ may be in the best position to monetise its digital strategy. When it renamed TVNZ On Demand under Simon Power’s leadership, it did more than rebrand. TVNZ+ is a full-blown streaming service in all respects bar one – it does not have a paywall.
TVNZ+ is a success story. Where are the Audiences? has shown a upward trajectory for TVNZ’s on demand service since the first survey in 2014 when it reached seven per cent of the audience. Now that reach stands at more than one in four New Zealanders accessing it. In that first survey the vast majority accessed it to catch up with a programme missed on television. The latest survey shows a significant crossover. Now more than 40 per cent use it to watch a show they would usually watch online (e.g. on a service like Netflix), compared with 39 per cent for a catch-up. That is a far cry from the service set up 16 years ago solely as a time-shifting convenience.
Could TVNZ+ move into the subscriber market to compensate for declining linear tv advertising revenue? The answer is yes, and no. Its empowering legislation requires it to provide “channels that are free of charge and available to audiences throughout New Zealand” but that does not appear to preclude other services for which it charges a fee. TVNZ would most likely adopt a binary strategy, with some free services and others paid for on either a pay-per-view or subscription basis. It is clearly already working toward a sophisticated digital strategy that incorporates a range of revenue options.
The future for TV3 and its free-to-air siblings is less certain. Its Three NOW streaming service, although in second place, is well behind TVNZ+ in audience share at only seven per cent. The network’s overseas owners, Warner Bros. Discovery, have far more invested in the subscription and on demand markets than they do in broadcasting. And sentiment will play little part in their future thinking. If Three closed down, one assumes Newshub would go with it and also carry off the Sky Open’s news programmes it supplies. We can only hope it doesn’t come to that because the balance between state-owned and private sector news media would be changed for the worse.
Where are the Audiences? is a mine of information but you come away from it with two over-riding impressions. The first is that the pace of change is increasing with every survey. The second is that the structures and oversight that we associate with media are already outmoded and by the time the next survey comes around, will clearly be no longer fit for purpose.
Change will be needed on many fronts but we’ll leave you with one example. The scarcity rationale is a legal theory that has been used to support government regulation of traditional broadcasters because the electromagnetic spectrum is limited or scarce resource. How valid, then, is state regulation if that broadcast spectrum plays little or no part in the dissemination of content through seemingly limitless digital services?