Crux, one of New Zealand’s most outstanding regional digital news start-ups, has “gone into hibernation” and there is a question mark over whether it can emerge from a deep sleep.
The creation of news veteran Peter Newport, Crux has been serving the Southern Lakes area since 2018 (and more recently Dunedin) on a combination of digital advertising, subscriptions, and contestable government funding.
The latter dried up with the present government’s cessation of the Public Interest Journalism Fund, although segments such as Local Democracy and Open Justice continue to be funded. Crux’s access to government money has stopped and the other two sources are insufficient to sustain it.
Newport, as its founder and managing editor, announced the “hibernation” during a media panel at the Queenstown Writers’ Festival. There was no small irony in the choice of venue. Sitting next to him was Media Minister Paul Goldsmith. He said in the announcement of the ‘hibernation’ that the minister had asked for an urgent review of regional media. However, this is probably no more than a reference by Goldsmith to the task of “supporting rural connectivity initiatives around New Zealand” that he has delegated to his Under-Secretary Jenny Marcroft.
Goldsmith has picked up Labour’s Fair Digital News Bargaining Bill as a way for our media to extract money from the transnational search and social media platforms. If it has any chance of success (and I have my doubts) one thing is certain: local and regional operators like Crux will receive a pittance, if anything, from such ‘bargaining’.
Nor is local digital advertising sufficient to sustain operations like Crux. The scale is simply not there. Most digital advertising is national and the vast majority of it goes to the likes of Facebook and Google.
In order to sustain itself by audience subscriptions alone, an operation like Crux would need to charge fees that would test even the most ardent follower of local news. High subscriptions would also limit or remove the prospect of more than one local news outlet.
In his announcement last week, Newport highlighted the fact that Crux did not take advertising from local councils. To do so, he said, could compromise its independence.
Accepting advertising does not, in itself, destroy editorial independence. Were that the case, no commercial news organisation would keep its editorial integrity. However, the smaller the enterprise and the most dependent on a single advertising source, the more vulnerable it may be to pressure.
Newport’s hoped-for solution was a national network of local newsgathering, that would have the scale to attract national advertising and avoid hyper-local financial dependence. However, he has so far been unable to find funding for an expanded Crux network, which he sees as the operation’s only hope for survival.
Crux, therefore, becomes the latest canary in the local news coalmine. The floor of that mine has long been littered with dead birds but, if the warning sign from a popular outlet like Crux goes unheeded, the results could disastrous.
New Zealand has yet to become familiar with ‘news deserts’, a term that is heard with increasing frequency on North America, the United Kingdom, and Australia.
We need to get used to it. It is on its way here.
In the United States, where overall newspaper employment has fallen by 70 per cent since 2005 and 127 newspapers closed in the past year, there are 1500 counties – with a combined population of 55 million – with no news outlets or only a single outlet. In the United Kingdom there are 38 local authority areas that are not served by any dedicated local news outlet and an estimated 4.1 million people live in these areas. In Australia, 29 local government areas (5.4 per cent of the total) have no local print or digital news outlets.
Some areas have nominal news outlets, that carry little local news. Some of these are ‘zombie’ newspapers that have a local masthead but contain no local news. With good reason, they are known as ‘drylands’.
Without some form of game-changing, this country is destined to go the same way. Already, we are suffering media climate change. Our regional newspapers contain large amounts of content generated by metropolitan titles within the same group. As those shared pages increase, the amount of local coverage diminishes. They become ‘drylands’ and, if the climate continues to change, ‘news deserts’.
Small independent local news outlets lack even that survival mechanism and are forced to become shadows of their former selves or to close.
When an enterprise backed by Peter Newport’s considerable savvy and entrepreneurship is forced into ‘hibernation’ – which sadly must be seen as a precursor to closure – the prospects for older and less enterprising ventures must be dire indeed.
Remember, Crux is a child of the digital age. It is not legacy media facing the crushing overheads of printing and distribution or transmission charges. It represents the most cost-effective means of news distribution yet it, too, cannot make ends meet.
In other countries, where digital startups have attempted to repopulate a news desert, the attrition rate has been high. Some have survived but many have been unable to sustain themselves.
The fault lies not with the producers of news but with the model under which they must operate. And that model is broken.
Jenny Marcroft needs to do more than what the military call a sitrep – a situation report. Her efforts must go further: to gathering the necessary information to recommend to the minister new operating models that take government beyond the fear factor generated by ‘bribery’ disinformation associated with the Public Interest Journalism Fund.
An independently apportioned journalism fund – generated from the unpaid taxes that transnational platforms should be levied – could sustain local as well as national journalism. New legal and taxation structures could recognise the public good served by news media outlets, particularly at a local level.
Outlets like Crux are important parts of our local communities. They not only serve to hold local power to account, but also contribute to local social cohesion. Unlike the arbitrary and sometimes ill-informed content of local social media pages, they provide professionally curated access to information that the community needs to know.
Without change, there is a real danger of democratic deficits. We are on a precipitous path when the only source of ‘news’ about what is being done at a local level is a website produced by the communications staff of the authorities we elect to act on our behalf. How can we assess performance – including that of paid staff – when they are the arbiters of what appears on their website? And the path is even more perilous when we have no independent way of assessing the words and actions of those who put themselves forward at local authority elections.
The sudden hiatus of Crux, which went into hibernation “with immediate effect”, is an additional warning that the local news scene may change very quickly.
There is an urgent need for pre-emptive government action to prevent news deserts and to ensure the viability of local news outlets. Without water, it is very difficult to get things to survive, let alone grow.
Obviously it’s a bummer that Crux is “hibernating” but that doesn’t mean Queenstown and the Lakes are without a local news source. “Mountain Scene” long one of our most stroppy news outlets continues and “Scoop” Chandler still lives. For years Wanaka was served by a regular newsletter prepared by Ian McCrone who retired there having been the AAP rep in Wellington The newsletter grew 20 years ago or so into the “Wanaka Sun” That too is alive and well. So Crux faced some long established competition and perhaps the Wanak Sun is a useful model. Start (very) small.
“The fault lies not with the producers of news but with the model under which they must operate. And that model is broken.”
Agreed. Hugely ironic we live in what used to be called an “information age”, but for actual information specialists eg journalists? Job loss for decades now. Even communications workers eg what used to be called “public relations”, are reporting a decline in work opportunities.
Just learn to code?
An old sneer from information technology workers seems much less prescient, as AI adds exponential analysis and execution capacity to coding. Across information industry sectors, the labour force is in decline.
Including entertainment sectors. A further irony? Lies in the fact that by far the most active response to the threat of job loss from AI has come from professionals portraying mostly fictional worlds – actors and other movie world workers.
Non-fiction news professionals analysing, reporting, and publishing real-world issues, using real-people skills, in real-time? By comparison, have not staged similar action at anywhere near this level.
From a strictly corporate perspective, the reply here from Richard Harman makes complete sense. Start (very) small. Survive.
But we also need to think big, to survive. Jobs for journalists, PR, IT, and nearly everyone else in the global information industry face a kind of mass extinction event – one that we’re already in, a few decades deep.
“The media” is no longer finding answers in “the market” and at a time of exponential AI-fuelled complexity, we need many more human voices, not rapidly fewer. Until this is addressed as a market failure, the decline continues.
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