Week in Review

Jacinda needs to do a deal with Mark

The Government is rolling out a $50 million support package for NZ media companies with more to come in three weeks. But, as Mark Jennings writes, it is unlikely to save all the current players and a bolder approach is needed.

The best thing the Government could do to help New Zealand media right now is to get the Prime Minister on a Zoom call with Facebook boss Mark Zuckerberg and ask him for $100 million.

In return for saving the New Zealand media, she agrees to let Zuckerberg off the hook that the Australian, French and other governments are planning to put him on by making Facebook pay for news content.

It is clear that Ardern, Finance Minister Grant Robertson and Broadcasting minister Kris Faafoi have little appetite for getting tough on Facebook, Google and the other social media platforms that have scooped up the digital advertising revenue and made paupers out of the local media companies. They could easily ‘cut and paste’ the Australian plan but have so far demurred. Even the easy fix of diverting government advertising from the American giants to news outlets at home, during the current crisis, has been summarily dismissed by the PM.

Ardern is a Facebook fan. Despite her efforts with the ‘Christchurch call’ to have Facebook behave more responsibly and stop objectionable material being uploaded, she uses the medium frequently and with telling effect.

The intimacy of a video message posted on Facebook suits her warm style. It is a big advantage she has over other politicians.Simon Bridges performs better when he is in a television studio responding to questions. Winston Peters and Shane Jones are in their element in front of audiences at the Town Hall or on the marae. James Shaw is adept on radio. Jacinda though, is the master of social media .

Ardern’s understanding of Facebook could play well with Zuckerberg. Asking for a big handout, even if it is not $100 million, is not a crazy idea. Facebook announced a few weeks ago it is giving $40 million to smaller media companies in America and $125 million to international media to help them with marketing coronavirus stories.

This is on top of the $500 million it has already pledged to give US media by the end of 2021. It has supported 80 local newspaper jobs in the UK for the past two years.

It may be a defensive ploy but it is in the mood to help. Google, which is sitting on a $180 billion dollar cash reserve, could also be tapped up.

Coronavirus has hammered advertising revenues but they were already sliding. The Government’s support package and medium term support it’s yet to announce will help, but it won’t make the biggest problem – the loss of advertising to the social media gatekeepers – go away.

The winners out of yesterday’s ‘triage’ are the broadcasters. Not having to pay transmission fees for the next six months will save MediaWorks in the order of $6 million, TVNZ about $3 million and NZME at least $2 million. MediaWorks and TVNZ will also benefit from not having to pay licence fees to NZ on Air. The Government says this will save media companies $16 million but the impact won’t be immediate. The production sector will need to ramp up again after Covid-19 and the benefit might not be felt until around September.

Giving Government departments a million dollars more to spend on subscriptions is aimed at helping some of the smaller companies like Newsroom, The Spinoff and Business Desk.

The only cash in the door – the thing that most advertising-dependent media need now – is limited to an $11 million discretionary fund.

Faafoi has indicated this will come from advertising spend being brought forward. In essence, it is not additional money, just money arriving earlier. And how far will $11 million go between the media players?

The country’s biggest digital news provider, Stuff, will want a big chunk of this pie as there seems to be little relief for it elsewhere in the package.

And what about the independent regional and community newspapers? Winston Peters and New Zealand First will not want to see the small guys miss out.

It would hardly be surprising if Peters is telling Faafoi the Government wouldn’t have as many headaches as it has now if he had supported NZ First’s policy of allowing NZME and Stuff to merge when it was first announced back in December, last year.

The choice for the Government is become starker – either allow some consolidation or accept there will be failures. There is a belief among some senior political and media figures that key Government ministers expect a number of news media companies to go under.

The crunch point for the vulnerable will come in three weeks when the medium term support package is unveiled. The most likely scenario is that the Government will look to directly fund journalists or journalism and thus avoid claims it is supporting doomed business models or subsidising foreign owners. If businesses fail, the funded journalists could move to another media company.

It has a ready-made vehicle in NZ on Air that could quickly allocate funds. If it chooses this route then Cameron Harland, the new chief executive of NZOA, will suddenly find himself standing in a very bright spotlight.

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