In November 2016, 30 editors and senior journalists from all over New Zealand wrote a letter to the Commerce Commission regarding the proposed merger between NZME and Fairfax. They told the Commission that this unprecedented collaborative message from across multiple media outlets “should be seen as a reflection of the deep concern we have that your decision to reject the merger will inevitably spell the end of our ability to maintain quality national and local journalism at scale for New Zealanders.”

Translation: some of the most senior figures in the New Zealand media were signaling that maintaining the local newspapers and quality journalism at the current scale we enjoy is not going to be possible. The stakes are higher than job cuts for journalists and possible closures of local newspapers. The public relies on a healthy and stable media to provide accountability and transparency on the actions of the people in positions of trust and authority over all aspects of our lives. Knowledge is power—without an active and secure fourth estate, we are all disadvantaged in our ability to live and participate in a free, democratic society.

In addition to this important non-partisan political role, the media also informs our sense of national identity by bringing our geographically diverse stories to the public eye. These stories inform our view of ourselves and our society. It is through journalism that we understand the national impact of domestic violence, binge drinking, environmental issues and suicide.

It would be another five months of financial instability and uncertainty before the Commerce Commission would finally release their decision. In rejecting the proposed deal, Chairman Mark Berry stated, “this merger would concentrate media ownership and influence to an unprecedented extent for a well-established modern liberal democracy.”

On the one hand, the Commission argues that democracy requires competition between media, and acted to prevent the concentration of too much media power in one place. On the other, stopping the merger has already led to job cuts and the shuttering of regional newspaper titles, leaving less time for the remaining journalists to investigate and understand all of the issues they have to report.

By June 2018, 28 Fairfax titles were either closed, sold, or under review. NZME also felt the pinch, with year to June profit falling by 53% as they invested quickly in new growth markets and revenue opportunities, while still losing revenue from their traditional  news business.

“People still seem to fundamentally believe that private or for-profit news agencies will simply provide good journalism from the goodness of their hearts. News is a privilege and not a right.” – Duncan Greive

What has changed? Why has it become so financially impossible for the media industry to survive and thrive in a competitive environment?

In the past, the lucrative secondary functions of printed classifieds, advertising, public and family notices provided the financial revenue to support the primary function of journalism. Essentially, the newsroom and the business of news remained in a pseudo-separation from the financial bottom line. Newspaper owners were able to allow editorial freedom as long as the quality and exclusivity of the content brought in enough readers to attract advertising and classified dollars.

This financial model has now all but completely collapsed. As platforms like TradeMe emerged, readers had new bespoke and accessible ways to buy and sell goods. Digital advertising on websites and in mobile applications now provide measurable and often cheaper methods of advertising. The modern consumer has almost unlimited browsing options on multiple devices and the ability to self-select a news, entertainment, and content experience separate from any over-arching editorial influence. Modern media outlets now have to create news content that can compete for audience engagement against Netflix, Lightbox, Amazon, Facebook, YouTube, Instagram and every other online content producer and advertising platform.

The first attempts to move advertising from print to digital didn’t work well—disruptive user experiences full of pop-ups, banners and homepage takeovers were often cheaper than print but now advertisers could detect where customer engagement was lacking. Ad-blocker technology cheapens the value of these advertising channels even more.

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This has led to an incursion of more tabloid and entertainment content into publication spaces on homepages and mastheads traditionally reserved for “hard news.” Media bosses have long argued that their outputs simply mirror the tastes and interests of society, and with our browsing and viewing histories now available, they have more empirical data to prove it than ever before. Producers and programmers are delivering more of what our online behaviour suggests we will consume, because consumption is what attracts advertising revenue. Media outlets must create revenue streams in order to keep the doors open but how they do that has changed drastically in the last 20 years.

In the words of Duncan Greive, creator and managing editor of online media outlet The Spinoff: “People still seem to fundamentally believe that private or for-profit news agencies will simply provide good journalism from the goodness of their hearts. News is a privilege and not a right.” The option to ‘pay-to-play’ with publishers like The Spinoff for advertorial and partnership content is increasingly common. This model relies on partners and sponsors working with editorial teams to produce content that is engaging and meaningful for the consumer and the sponsor, but the model is not without some criticism. That skepticism falls largely on the subject of ‘fake news’ and the question: “if a sponsored story looks like news and reads like news, is it actually news?”

Duncan defends the approach saying, “It’s hard not to resent the expectations placed on private news providers at times. Our business is more complex than it’s ever been – all while the revenue is drastically diminished and a large class of lay experts feel completely comfortable critiquing the practice.”

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Greive believes he has found a happy median between consumption and distribution that relies on transparency, and journalists understanding the sophistication of their audiences. “Our business model is partnership and sponsorship and we make it clear when our content is funded in that way. When our journalists are not writing for a partner, they are writing whatever they want. We give them implicit license because they know what makes good content and we know what our audience is interested in.”

Legacy news titles have also flirted with sponsored content, but not to the extent of The Spinoff. Instead Fairfax has continued to invest in their digital platforms; Stuff.co.nz and Neighbourly.co.nz to build audience engagement while the NZ Herald have signaled a future move to a subscription model.

“It puts a line in the sand to say that our work is important and has a value—of course it does mean that we need to be producing top quality content that our audiences value,” says Miriyana Alexander, Premium Content Editor for the NZ Herald. “I think that increasingly there is an understanding that it costs money to do good journalism, and readers are willing to put their hands in their pockets to support publishers whose content they value.”

That’s the pay-for-consumption model, where consumers pay for what they want, just like a monthly subscription fee to Netflix. Internationally, subscription and membership models have proven to work and in some cases, reader revenue has overtaken commercial revenue. In 2017, The New York Times boasted 46% growth in digital only subscriptions, which includes content like crosswords, recipes, cooking and fitness programmes. These digital experiences haven’t necessarily eliminated advertising but they have streamlined and improved the user experience.

There are significant concerns that public interest journalism might be the loser while newsrooms continue to experiment with the business model driven by consumer engagement. The pressing issue for the state of New Zealand’s public square isn’t one of media monopoly but financial survival in a global digital marketplace. So far, the cost has been a nationalisation of our news media with the loss of some specialist and local coverage. Regardless of the Commerce Commission’s intention, New Zealand is facing an inevitable media monopoly by means of a ‘survival of the fittest’ war of attrition between our largest media companies.

A national conversation about important issues does matter, not only for the sake of democracy but in cultivating a sense of national identity, an understanding of our history and our future; a reflection of who we are and who we will be. The accessibility and diversity of content available across a broad variety of channels has led to a tactical scrambling to put content where consumers might see it. The diversification of channels means there is no longer a single reliable media avenue that can reach the majority of New Zealanders at one time and place. The singular reflection of society previously provided by our traditional news media has splintered into a diverse mosaic. If we don’t find new ways of curating and maintaining that mosaic, key issues of importance might go unheard and unseen. Unique perspectives could disappear from the national conversation while divisions between parts of society—rural and urban, young and old, rich and poor, left and right—could widen without a national forum of conversation to bring us together. The capability to consume only what matters to us, increases the ability of the individual to live in society without participating in the whole. Pushing the conversation into the places where New Zealanders are consuming news and content is now a crucial responsibility of  media distribution.

If the New Zealand media are to foster broader public conversations, there are challenges beyond revenue to address, like distribution and access. More than 100,000 New Zealand children live without access to broadband internet, something the UN now considers a basic human right. Look at those populations geographically and you’ll discover communities that are disproportionately rural, poor and Māori, with access to fewer regional and local media sources. Greive is right, access to the news and participation in the public conversation is an area of increasing disparity where the risk is significant loss of diversity. Where the public conversation depends on consumer self-selection, too many New Zealanders don’t necessarily have equal representation  or access.

In competing for that consumer attention, Miriyana Alexander addresses the challenge facing journalists. “At a simple level that has made it necessary for journalists and editors to think of the best ways to tell the stories—500 words and a picture just will not cut it anymore, and obviously hasn’t for some time. Now our story-telling devices include infographics, video, social media explainers, podcasts and docos across multiple platforms,” says Alexander. Traditional outlets and new media outlets alike are paying to distribute these new content types through platforms like Facebook and Twitter, trying to reach consumers where they are.

The connecting power of these social platforms have had a large impact on the way people discover news stories and how different issues gain traction in the public square. “Many people get their news on Facebook, where a large dump of information comes in one stream—some from reputable publishers, but others that could have been created by bad actors looking to weaponise social media. We have seen this happen in the US election, Brexit and other European elections, so people are confused, and there is a danger that turns them off the news,” says Alexander.

“I think that increasingly there is an understanding that it costs money to do good journalism, and readers are willing to put their hands in their pockets to support publishers whose content they value.” – Miriyana Alexander

A modern journalist’s job description may have changed somewhat, but Alexander is philosophical and optimistic about the media’s ability to maintain a non-partisan conversation for the public good. “It is both a possibility and a reality. We are doing this all the time at the Herald, and that won’t change. Journalists will always tell the stories that matter. But it is important to constantly evaluate what we do: is it adding value for our audience? And if it isn’t, we shouldn’t do it. When resources are finite, we need to focus on doing what matters.”

“We are utterly committed to investigative journalism. In my view, the Herald has the best investigative unit in the country and the work they do, supplemented by a strong news team, really matters and makes a difference. We won’t stop doing that work. I think New Zealand is very well served by the amount of resource that various publishers and broadcasters invest in this sphere; we all know how important it is,” says Alexander.

How much quality journalism can New Zealand sustain in a globally competitive marketplace where our media industry is battling the monolithic agencies of Facebook, Google, Amazon, The New York Times and The Guardian? Arguably, there are too many major media outlets for a country of 4.4 million people—the population of a mid-sized city in many countries. The question isn’t the quality but quantity of journalism. It is only a matter of time before local competition between outlets diminishes the resources available for journalism and its distribution to public platforms.

The future of New Zealand media can only be found in this new mosaic, creating content that speaks to the diverse interests and concerns of society and delivering it across the network of channels and platforms that make up the new media landscape. In order to encompass the full breadth of this scattered picture, a recalibration of the industry is still necessary and inevitable. Recalibration will mean a re-sizing and re-prioritisation of the industry, one way or another, primarily through consolidation at a national level. As with any downsizing in business, it would be preferable to do sooner and by design, rather than at the mercy of the market. A reduction of large media outlets would allow for greater diversification into specialist and local content production, where the financial cuts have hit hardest. Reducing local competition, investing in our information infrastructure to allow access for all New Zealanders, and recognising the global media monoliths as our true challengers will allow for greater focus on developing a media model that will work for the age in which we live, telling important stories that reach and reflect the full mosaic of New Zealand society.

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Tash McGill

Tash McGill is a transformation strategist, writer and broadcaster with a broad background in the media industry. Having worked in digital strategy, print and radio, advertising and public relations across her career, her interest in the transformation of the news media sector is both personal and professional. Tash works with clients like Tourism New Zealand, World Vision USA, World Vision NZ, NZTE and others in New Zealand and the US to achieve transformation and effective storytelling.

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