The government should thank its consultants for producing a report on whether media need support. Then it should file it away somewhere where it will quietly gather dust.
The conclusions drawn by Sapere Research’s report “The implications of competition and market trends for media plurality in New Zealand” pay scant regard to the fact that it raises more red flags than a Communist rally.
The report was commissioned by the Ministry for Culture and Heritage and delivered last November. Curiously, it did not publicly surface until after Daniel Dunkley revealed its content on the paywalled Businessdesk website last week. Only then was it “proactively released” by the ministry with a note that “The report is the view of Sapere Research and is not government policy [and] forms one part of our policy evidence base on the current state of the media sector in New Zealand”.
I hope that is an indication that it has not gained much traction.
The report concludes levels of plurality are fine and there is no compelling case for direct government assistance to media for the production of national news or for policies that facilitate structural change. Nor does it see the need to do any more than support OECD efforts to curb the transnational platforms that are siphoning off almost half the advertising revenue produced in New Zealand.
Instead, it calls for the establishment of a monitoring system, administered by the ministry, to keep track of potential changes in media plurality. At best, that means more jobs at MCH or, at worst, a Nero-like determination to fiddle while things go from bad to worse.
The timing of the study was ill-judged. It was carried out while the proposals for a new entity to replace Television New Zealand and Radio News Zealand were in gestation and, as a result, the consultants took a rain check on discussing any of the implications that flowed from it.
As the New Zealand Herald pointed out in a stinging editorial, the report “makes some strange assumptions”. It seems to think that Google and Facebook do more good than harm to an industry whose finances they have helped to decimate. It opposes the collective bargaining approach used in Australia to negotiate with the digital giants, which is at odds with the ministry’s support for an application now before the New Zealand Commerce Commission to allow our media companies to do exactly that. And it casts doubt on media companies putting any windfall to good (journalistic) use.
This was the Herald’s view:
Sapere bizarrely argues that compensating media companies will not necessarily lead to an increase in the volume of public interest journalism, rather than simply improving the financial position of the news firms. Some outside the industry might believe this could be true in theory, but surely even they accept media companies with sustainable finances are the best hope New Zealand has to produce quality journalism in the public interest. New Zealand has lost hundreds of journalists over the past decade as media companies have strived to find sustainable business models. Google and Facebook operate as virtual monopolies in their markets, making colossal profits from selling advertising despite creating virtually no content of their own.
The report was critical of some aspects of the Public Interest Journalism Fund, in spite of the fact it must have carried out interviews with industry representatives when only the first round of the fund had been concluded and none of the projects fully implemented. It quoted several [unnamed] stakeholders who “expressed concern that funding decisions had crossed into editorial decision-making, with New Zealand On Air effectively holding a ‘beauty contest’ to choose which proposed stories/investigations merited support”.
It makes no mention of the fact that there have been 268 applications for a share of the $55 million fund (with further rounds yet to come this year for the $19.8 million that remains to be allocated). Granting all of the applications to date would have cost $126 million. So, not a beauty contest but a necessity. Sadly, comments like that simply add fuel to the “media have been bought” claims we are now seeing from ragtag protesters at Parliament and from people who should know better.
The Herald debunked the claim of interference, ending its editorial:
For centuries, newsrooms have operated fiercely independent of their funding sources, including advertisers who value the importance of a free press. The same principle must – and does – apply when it comes to the PIJF.
The report also called for funds to train Māori, Pacifika and Asian journalists, which is already part of the NZ on Air initiative.
However, the aspect of the report that is hardest to fathom is its conclusion that media plurality is just fine and there is no need to government intervention. It supports this conclusion with a chart that it has coloured in what it calls a traffic light system (yes, just like the current Covid plan). Its assessment of news plurality has only a single red light – a medium term prospect that there will be uncertainty over the viability of local (regional) news.
It green lights the current state of national news production and consumption, with only a medium term prospect of amber-light “financial pressure” and negative effects from digital platform algorithms.
This is in spite of its acknowledgment that media companies are struggling to replace the loss of traditional advertising revenue, the number of journalist roles has halved since 2006, and 29 community or rural newspapers have closed. Yet the report recognises that newspaper companies provide the bulk of news content consumed online, still funded in large measure by ever-diminishing newspaper advertising.
If you want a clear picture of what is happening to mainstream media, look at this chart. The trends are obvious and there is no way they are going to suddenly change course. Media companies cannot change their business models successfully while Facebook and Google rocket ever upward at their expense (something barely acknowledged by the consultants).
Several case studies are appended to the report as indicators of how the media landscape can successfully change. Included are Businessdesk and The Spinoff and both deserve credit for what they, along with Newsroom and local Queenstown newsgatherer Crux, have done. However, they do not represent alternative business models for operations on the scale of NZME and Stuff.
There are also two foreign models examined – the Australian approach to negotiating with the digital giants, and a Canadian proposal to allow media to register as charities. It rejects both. It canvasses neither the current funding support models in Canada ($NZ57.6 million over five years) nor Britain ($NZ16 million a year), nor alternative taxation models such as the Low Profit Limited Liability Company (L3C) used for public service enterprises such as rest homes in the United States.
The focus on plurality is misguided. The New Zealand media ecosystem is so small that a major change in any one of the mainstream participants can have a significant effect. We have already seen that with Fairfax’s walk-away sale of Stuff in its deal with the Nine Network and Bauer’s abrupt exit from the magazine market here. Thankfully, most elements were restored but the results could so easily have become catastrophic very quickly.
No monitoring system is going to be sufficiently predictive to forestall commercial decisions, particularly when they are the knock-on effects of larger plays made in the boardrooms of Sydney or further afield. And the landscape is instantly changes if Cabinet gives the green light to a new public media entity, raising the possibility that state-owned media could become the dominant force through sheer scale.
Money would have been better spent by asking the consultants how policy and funding settings that could be employed to ensure the on-going viability of New Zealand media at a local and national level. Little in its report answers those questions satisfactorily.
Local media are suffering before our eyes but the consultants offer nothing apart from, perhaps, an increase in the Local Democracy Reporting scheme that funds 20 reporters in local newsrooms. While their suggestion that this funding should be ring-fenced is sensible, it will not save local newspapers that are struggling from week to week, knowing a chronic illness will eventually kill them. The report seems to accept that prognosis, foretelling a move toward national news (which may cede the local territory to untrained bloggers without the constraints of journalistic practices and ethics).
The malaise is by no means limited to local media. Mainstream national media have cut newsrooms to the bone. The report notes:
Media firms we spoke to commonly reported all unnecessary costs had been stripped out of their businesses in recent years and they were operating as leanly and as efficiently as they could.
Translated, that means the all-too-obvious gaps in news coverage across the board are not the result of laziness or casual attitudes in newsrooms. Rather, there are insufficient reporters to cover what was done in the past and fewer checks and balances on what is covered The Public Interest Journalism Fund was an attempt to close some of those gaps – resulting in initiatives such as the Open Justice court reporting scheme. However, the PIJF cannot solve the wider and longer-term issues of overall viability. Those solutions must be more systemic and structural.
Until those institutional-level solutions are found, and if we are to continue to get the news required to function as a democratic society, financial support will be needed. That can be achieved without compromising the independence of our journalists but, because it viewed the media landscape through a plurality lens, the report offers little that might help the ministry and Government to formulate that assistance.
The report is not without its merits. It usefully draws together data on the state of various aspects of media. The authors look at this data but, in too many cases, they do not see.
But wait, there’s more….
As a follow-up to last week’s commentary on protest and media abuse: This outstanding column by Jehan Casinader in the Sunday Star Times asks and answers a fundamental question — Do the protesters in Wellington even know what ‘freedom’ means? https://www.stuff.co.nz/opinion/127815331/do-the-protesters-in-wellington-even-know-what-freedom-means?fbclid=IwAR2szAJ0tLDAQHGB20EkPVSh2Fg0DRGb1LvnSF6pB2o4YEZLufOEUX0DNkQ
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