Govt’s $50m boost for news media

Transmission charges for broadcasters and contributions to NZ on Air projects are cut for struggling media firms as part of the first of two support packages

The Government's emergency 'triage' funding to help news media companies will see it cut charges from two state entities and order government departments to subscribe to news providers.

Communications Minister Kris Faafoi said state-owned enterprise Kordia's $21.1m in transmission charges to broadcasters would be removed for six months. Financial contributions valued at $16.5m that funding agency NZ on Air requires from broadcasters towards programming projects would be removed for a year.

A further $11m will be held for specific assistance to media, as needed.

The loss-making MediaWorks and publicly-owned TVNZ would be the big beneficiaries from the cut to transmission costs, and would benefit from the NZ on Air fee reductions.

There is less in this package for the two big print/digital companies NZME and Stuff, who have both suffered 50 percent cuts in advertising revenue during the pandemic and lockdown.

Stuff's chief executive Sinead Boucher would have liked to have seen the assistance spread across more of the news media industry.

She recognised some of the measures raised by media with the Government had been addressed, but "it seems print and online businesses, which employ the majority of journalists in the country, will not get the same level of benefit as the broadcasters at this stage,and certainly not at the scale needed to make up for the severe impact on the revenues that fund journalism.

"Alongside the bigger companies like us, are many smaller publishers who also have a very important role to play in the media ecosystem in New Zealand, and in the role that journalism plays in a healthy democracy. We would have liked to have seen a package that went further in recognising the need to preserve that journalism across a wider spread of media, through a time when it has never been more needed and more in demand."

Boucher is eyeing possible relief from the remaining $11m. "We look forward to discussing the options for assistance available to us within the $11m envelope that applies to non-broadcast media, and further support that might be provided in the government’s second package."

Faafoi said the media industry was just the third, after health care and aviation, to warrant specific funding help.

“This support reflects the essential role media play at this time in delivering access to reliable and up-to-date news coverage and keeping New Zealanders connected while in lockdown.

"There is evidence New Zealanders are turning to trusted news sources in record numbers at this time so it is critical the media is supported to keep doing the great job they have been doing."

He said: "This package is about freeing up cash in the short term to assist the industry get through the immediate crisis and dramatic drop in advertising revenue experienced since the start of Covid Alert Level 4.

“By cancelling transmission fees we are freeing up cash the media companies can use to help them in the short term. This is in addition to the wage subsidy and other tax measures.

“Initiatives in this first stage aim to provide some immediate relief and allow time for work to be done on longer term strategies to ensure future sustainability in New Zealand’s news media."

The minister said more would be needed and a bid for funding would be made next month as part of the Budget process for dealing with Covid-19's effects.

One of the urgent funding measures is $1.3 million to purchase central government news media subscriptions in advance for the 2020/21 financial year - likely to be paid to companies in May - and encouragement for Crown entities to increase their uptake of news media subscriptions.

Faafoi said he hadn’t received any indication from media executives about how many jobs the package would save.

“I want to stress that this is the first package and this alone will not be able to cure all the problems that the media sector has. I think some of the long-term solutions will certainly be part of discussions and of course some of the commitment that the Government will make towards the second package,” he told reporters on Thursday afternoon.

Faafoi also defended the package against accusations that it favoured broadcasters over print media, including Stuff, the country’s largest employer of journalists.

“I think that’s because of the nature of the cost and immediacy that we want. It’s expensive for transmission costs for the likes of broadcasters. It is immediate relief that we’re trying to get through. The flexibility that we have within that $11.1 million of funding will allow us to have some of those bespoke conversations with specific entities to make sure that if we can assist them with initiatives like bringing Government advertising forward, we might be able to advance that,” he said.

“There is an urgency to help out everyone. The nature of the funding envelope is weighted [toward broadcasting] purely because of the nature of the cost of some of the media platforms. In this case, being transmission, it’s six months worth of television, FM and AM frequency fees which, off the top of my head, is roughly $20 million. That’s the cost of transmission fees.”

When asked whether he was willing to let legacy media companies fail, Faafoi said, “At the end of the day, some of those decisions aren’t in our hands. We’ve spoken to some of the owners of media entities, but not all. Some of those decisions won’t necessarily be made by us but some of the principles that are driving actions in the short- and the long-term are: media plurality, making sure we support the function of journalism and making sure we can retain as many jobs as we possibly can.”

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