Media

MediaRoom: What to do about Stuff

Tim Murphy looks at the future of Stuff Ltd under a merged Nine Entertainment-Fairfax group, a change in the leadership of TVNZ, another editor going to a political party, and at what Kiwis are watching.

The proposed takeover of Fairfax Media in Australia by the Nine television network has produced questions but no answers about the fate of Fairfax' New Zealand subsidiary, Stuff Ltd.

Market murmurings immediately focused on what interest the Nine chief executive, Hugh Marks, who would lead the combined entity after the $4.2 billion deal, would have in the New Zealand operations.

Stuff could be attractive for the scale of its eponymous website, the clear market leader in news, but does not have broadcasting assets that could appeal in the same way Nine sees its own tie-up with Fairfax delivering sales benefits in Australia.

The Australian Competition and Consumer Commission (ACCC) will investigate the proposed merger over the next 11 weeks, including looking at its effects on media diversity across the Tasman.

From Stuff's viewpoint, this is a case of when elephants dance the mice must be careful. It is an issue for its sole shareholder, Fairfax, and its shareholders.  In NZ, it is business as usual until things get unusual.

Stuff's short-term fate is already uncertain, given its joint Court of Appeal bid to merge with competitor NZME. Should the court decision, expected late this year after the June hearing, allow the merger the issue for Nine would be settled.  Its New Zealand operations would then fold into a merged NZME entity and the Australian company would be its single biggest shareholder - but only for as long as that NZ media beast retained its appeal.

Certainly commentary out of Australia indicates Nine has little to no interest in Fairfax's regional newspapers there, or even continuing the Sydney Morning Herald, The Age or Australian Financial Review titles in print form any longer than the current owner envisaged.

Understandably, Stuff's chief executive, Sinead Boucher, did not want to comment.

Fairfax's Fin Review reported Macquarie calculations that the deal valued Stuff at A$108.7 million, at a multiple of 3.5 times its A$31.1m ebitda estimated for the full 2019 financial year.  The Street Talk column in the paper said: 

"It is understood the Nine camp has already talked about offloading a handful of non-growth and non-core assets, including Fairfax's regional media and New Zealand business units. 

"The way Nine boss Hugh Marks sees it, there is no need to spend management's precious time on such assets when the real prize is squeezing cost and revenue synergies out of Fairfax's Domain and metro group."

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Change at the BusinessDesk business news agency has seen one of the founders and directors, Jonathan Underhill, decamp journalism for the embraces of the National Party in Opposition, working in communications for economic development spokesman Paul Goldsmith and others. 

Underhill and Pattrick Smellie set up BusinessDesk a decade ago.  It has provided high calibre, straight and accurate news reports on business and the economy to news organisations including the New Zealand Herald, NBR, AAP and others, including Newsroom and our subscription service Newsroom Pro.

Smellie and journalist and shareholder Paul McBeth will now run the agency. 

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Dame Therese Walsh's elevation to the chair of Air New Zealand next year will see her give up the chair up the hill at TVNZ, after just two years in the role. Walsh, a favourite of the Key and English administrations after her organisational triumph with the Rugby World Cup 2011 and ICC Cricket World Cup in 2015, was deputy chair to Joan Withers at TVNZ between 2015 and last year.

From the Government's point of view, Air New Zealand would be the greater financial priority in its suite of part-owned or fully owned entities. It is 52 per cent owned by the public.

Walsh's move from TVNZ will allow Broadcasting Minister Clare Curran to make the appointment to the politically sensitive role as Curran and a working group forges a new public broadcasting environment. 

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The Spinoff TV's sixth episode doubled its audience in the targeted 25-54 age group last week - from the calamitous 4200 which resulted from its sidelining to the graveyard hour of 10.45 pm Friday to 8400. Its performance in the audience aged 5+ didn't bounce back quite so much, recording 17,000 viewers, up from 15,300 the week before - but both well under the 57,000 when the call was made by MediaWorks and NZ on Air to drop the programme down the schedule. At the time they said it would give the programme a chance to consolidate its audience.

The show won $700,000 in taxpayer funding from NZ on Air for its 16-episode run. The funding agency was not moved by the steep drop after the schedule change. Head of communications Allanah Kalafatelis said after episode five's ratings came out:

"The scheduling of the The Spinoff TV is an editorial decision made by the platform, but MediaWorks has kept us informed of their decisions regarding this project. There are no plans to cancel the current series. While the TV ratings have not been as strong as we would have liked, this is an innovative product made for both broadcast and online distribution and as such the TV ratings are not the sole measure of success. Feedback back so far about the online performance is encouraging.

"We will continue to monitor this project as we do all of our investments."

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NZ on Air's latest research on how New Zealanders consume media Where Are the Audiences?  had one finding that stood out. "On a daily basis linear TV has declined - driven by a fall in Sky TV penetration (Free-to-air actually grew 9 percent). Sky's decline thus dragging the market down despite TVNZ and TV3 and others overall holding up.

"Engagement with linear TV remains strong albeit on a reducing base," it says.

The report, by Glasshouse Consulting from a survey of 1400 people, found weekly audiences for traditional broadcast media are stable and still deliver the biggest numbers, but online video and Streaming Video on Demand (SVOD) are catching up. Each week 6 in 10 people consume on demand content, with more people using it as a new source rather than just as a catch-up of their favoured television programmes.

New Zealanders spend 2.5 hours a day watching linear TV, 1.5 hour listening to radio and 62 minutes viewing on demand.

The report, which follows similar research in 2014 and 2016, finds newspapers, including their online channels, had a declining daily reach from 52 percent to 49 percent and now 41 percent. Its conclusions had one stinging observation: "Daily more people view videos on sites like YouTube and Facebook than read a newspaper."

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