The bosses of Stuff and TV3 have been lauding their newly minted deal as a win for democracy and something to celebrate during a grim period for local media.
While it is true that a slimmed down news service on Three is better than nothing, it is hardly strengthening our democracy or media plurality.
Rather, it is another step in the stuttering rationalisation of New Zealand’s news media.
In recent times NZME and Allied Press (owners of the Otago Daily Times) have scooped up smaller regional operators and some talk radio stations have simply disappeared.
Three’s chief Glen Kyne says the deal with Stuff will preserve the status quo of “different voices asking different questions.” That’s a stretch given reporters will now be asking the same questions for Stuff and Three.
The steep decline of traditional advertising in news media has been threatening to claim a victim for some time.
Commentators have speculated that Stuff itself might be first to go. Following its disallowed merger with NZME, Stuff has tried many things to diversify its business away from its newspaper revenue base without any notable success.
But the first major victim was always likely to be TV3. You can’t go on for years losing more than $30 million a year and expect your US owner to somehow grin and bear it. Tellingly, when the Newshub closure was first mooted, Stuff’s owner Sinead Boucher felt the need to reassure staff that her business was sound, and was not next in line.
By shutting down Newshub and buying in a news service (1hour during the week and half an hour at the weekends) the American owners, WBD, will save tens of millions a year. With other cost savings, and the possibility of the Government reducing or scrapping Kordia’s transmission fees, WBD might even get close to break even.
WBD will keep all the advertising revenue and pay Stuff a fee for the 6 pm news service. Stuff will be able to use any vision it collects for the 6 to 7pm news hour on its own platforms but this is hardly likely to be a major money spinner.
In essence, WBD has de-risked its New Zealand operation and the onus is now on Stuff to provide a news product that stands up to viewer scrutiny.
Newshub’s ratings (total number of people watching) and share (percentage of those watching all channels) have been falling in recent years, despite having a significant budget to play with.
Newsroom understands Kyne told Newshub reporters “performance measures” are part of the deal with Stuff. This probably means the two parties have agreed a share figure and there will be a penalty or reduction in fee if it drops below that. If the new show struggles, the money paid to Stuff could fall and make the business equation even harder.
Stuff says it will hire some Newshub reporters, but it is going to rely on its own reporters and technology to provide a new, innovative product. Still, it will be spending a fraction of what TVNZ pours into its news.
One advantage Stuff undoubtedly has is its geographic spread – 19 newsrooms across the country – but many are thinly staffed already and cross platform products tend to have a low success rate.
If a story breaks in a regional town a Stuff reporter, perhaps with no television experience, will be expected to film and produce a story for Three’s 6pm bulletin, write a piece for Stuff and maybe another angle for the local newspaper. It is a huge ask when the competition (TVNZ) helicopters in an experienced TV reporter and cameraperson/editor who are solely focused on producing a polished piece for 1news.
Newsroom understands Kyne has conceded there is currently no plan for how breaking news (outside of the news hour) will be covered. How, for instance, would Three cover a major earthquake if it happened outside the 6 to 7pm hour? Networks traditionally interrupt programming to provide around the clock, or at least continuous prime time coverage of a disaster. It is unlikely Stuff could provide any significant sustained coverage. Viewers would simply defect to TVNZ and not all would return.
WBD is getting what it wants – a news hour with significant savings attached, but what is Stuff’s strategy?
Boucher, told reporters at a joint media conference with Kyne that she is not getting into the linear TV business but that is exactly what she is doing – albeit in a smallish way.
Stuff will need a studio, a set, a control room, a news production system, graphics and a weather presentation system (and the staff to operate them) if it is going to put out a news hour that meets viewer expectations. WBD says its own equipment is not part of the deal, but Stuff will need to hire or, at least, get use of it while it works out what equipment is best suited to the job and its budget.
Stuff will need to have got its cost projections spot on as it appears to have undercut rival bids. NZME’s CEO, Michael Boggs, suggested his company might have dodged a bullet, after revealing today it had missed out on the deal.
“As you might have read in media reports, NZME was part of early talks with WBD around potentially providing a similar service. As always, we needed to ensure it made commercial sense for us and for our shareholders, and we haven’t been involved in recent weeks….adding another element to our business right now would have only been a distraction – something that would need lots of extra resource, and some important projects we’re currently working on would’ve needed to go on the back burner.”
Those same risks of diversion of executive and newsroom time and effort, and a negative impact or delay to current business priorities now sit with Stuff.
Boucher and her team will also have to accommodate the views of WBD executives. Kyne made it clear at the media conference that he considers the deal to be a “partnership” and expects to be consulted on presenters and the “tone” of the news.
It is understood the higher ranks at WBD feel Newshub has been too left-leaning in its approach to news and want to see it “straightened up.”
This might prove to be the biggest of the many challenges facing Stuff as it enters the difficult world of TV news.
