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Tough times force media bosses to make difficult choices

Newsrooms are changing everywhere in the world: AI-generated image for Indian Newslink

Radio New Zealand
Wellington, March 12, 2024

It is well-known that legacy media outlets have been struggling to survive in a digital world. The creation of the Worldwide Web saw newspapers lose classified advertisements immediately, before the likes of Google and Facebook took over the market for display advertisements, also affecting the revenue of TV and radio outlets.

People are spending more time on social media and streaming services and less time tuning into older types of news media. Meanwhile, research suggests declining trust and interest in current affairs.

On Thursday (March 7, 2024), TVNZ announced plans to cut more than 60 jobs.

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Structural Challenges

Chief Executive Jodi O’Donnell told staff that tough economic conditions and ‘structural challenges’ within the media sector have hit the company’s revenue.

“Difficult choices need to be made to ensure TVNZ remains sustainable,” she said.

At the end of February, Warner Brothers Discovery, owner of Newshub, revealed a proposal to close its New Zealand newsroom by the end of June. Network bosses said advertising revenue had dissolved more quickly than expected.

At the same time, several sports reporters at Stuff were being let go, as part of an ongoing restructuring. NZME, the owner of Newstalk ZB and the New Zealand Herald was also pursuing a ”digital transformation.”

Smaller outlets were not immune. Online art magazine, Pantograph Punch, has gone into an indefinite hiatus, citing a “crisis of arts publishing.”

“Just about every media business in New Zealand is undergoing transformation and reducing costs, partly because of the economic climate, but also to meet changing audience demands and the rise of the likes of (Artificial Intelligence),” New Zealand Herald’s Shayne Currie wrote in August 2023.

What is going on?

“As the media industry settled into 2023, with Covid in the rear-vision mirror, we thought this might be a year of relative serenity. It was our most tumultuous year ever,” Currie wrote in her column last year.

The Reuters Institute says investment in digital services is growing (Reuters Institute Photo)

A global problem

The problem is a global one. A recent New Yorker essay described a potential “extinction-level event” and “nothing less than the end of the mass-media era.”

Stuff owner Sinead Boucher referred the article to a Parliamentary Committee considering the Fair Digital News Bargaining Bill, saying that the advent of generative Artificial Intelligence looked “increasingly like an extinction-level event” for news publications.

Journalism “is in a fight for its life” and “clinging on by its fingertips … against some of history’s biggest companies.”

During the pandemic, more people turned to social media platforms than to websites of traditional news outlets, according to the 2023 Reuters Institute Digital News Report.

Meanwhile, a growing number of people (36%) were choosing to avoid important news stories such as the war in Ukraine, national politics, and climate change, the report found.

The TikTok Generation

Young adults in the United Kingdom spend more time watching TikTok than broadcast television. Even older viewers were diversifying their viewing, becoming more likely to take up streaming services.

A 2022 Pew study revealed in the United States, “adults under 30 are now almost as likely to trust information from social media sites as they are to trust information from national news outlets.”

Since 2020, The Centre for Journalism, Media and Democracy at the Auckland University of Technology (AUT) has been conducting an annual survey of New Zealanders” trust in news.

Four years ago, more than half (53%) of respondents said they trusted most of the news most of the time. In 2023, that figure dropped to 42%.

“There is a bloodbath in the media industry,” says The Wrap (Their Photo)

Winners and Losers

Reader revenue models have seen some success, such as at The Boston Globe, The Seattle Times, and The New York Times. In recent years, memberships and subscriptions have outstripped advertising revenues for the first time for some titles.

At the end of 2023, The Times had more than ten million subscribers.

Nearly half of those were gained during Donald Trump’s four years in office. During his administration, the Washington Post tripled its subscriber base to more than three million. Smaller organisations also saw a sharp rise in digital subscriptions.

But for The Post at least, it proved to be a momentary pause in the decline.

Along with other legacy titles such as The Los Angeles Times, it has since reduced the size of its newsroom.

The 2023 Reuters Institute quoted respondents who weighed the renewal of news subscriptions against digital streaming services and chose to invest in the latter. Even big, digital media companies, once thought to be the future of post-print news, were dying.

Last year, BuzzFeed News shut down and Vice Media filed for bankruptcy.

“By 2008, Gawker was getting half the revenue per page of what it earned in 2004,” according to the New Yorker article.

Launched in 2002, Gawker shut down – for the second time – last year.

“The trend is likely to continue,” wrote Taylor Lorenz, an internet culture writer and columnist for The Washington Post.

One positive impact of the profusion of independent, online producers was a more diverse media ecosystem, Lorenz said.

But content creators outside registered newsrooms are subject to fewer checks and balances. Unlike journalists, they are not regulated by bodies such as New Zealand’s Media Council, helping ensure accuracy, balance, and fairness in reporting.

“Many news content creators on these platforms claim to be independent journalists but are backed by powerful special interest groups and conservative political activists,” Lorenz said.

Closures in New Zealand

There is no single source of information on how many newspapers have closed in New Zealand. Between 2000 and 2020 the number of enterprises engaged in newspaper publishing declined by 32% according to Statistics New Zealand.

And the most recent census data showed journalist occupations decreased by about half between 2006 and 2018 (from 4284 to 2061).

Last year represented a ”cross-over point” when New Zealanders overall started to spend more time using digital than traditional media, according to NZ On Air figures.

“The New Zealand media industry has changed considerably over a short period, with digital technology driving a shift away from linear media formats and fundamentally altering consumer consumption patterns,” said a 2021 report on media trends for the Ministry for Culture and Heritage.

The Covid pandemic had a “particularly detrimental impact” on the industry, it said.

“Stark generational differences suggest we can expect the disruption to traditional media consumption to continue.”

Officials at the Ministry for Culture and Heritage last year warned the government that there could be media job losses if it failed to progress a law forcing digital platforms to pay local outlets for using their content, RNZ has revealed.

Reports showed that Google captured about 55% of digital advertising revenue in New Zealand, while Facebook received about 6%.

Hope has been pinned on the Bill, introduced by Labour last year, to create a ”good faith bargaining environment” between news media entities and digital platforms.

Documents suggested that publishers could benefit between $30 million and $50 million each year under the Law and that the revenue could triple over time.

In recent years, both Australia and Canada have passed similar laws, forcing Google and Meta to pay news publishers for excerpts of their content.

It has not gone smoothly.

In Canada, both Meta and Google pushed back, with Meta blocking access to news on Facebook and Instagram last year. Google looked set to follow but was able to negotiate a deal with the federal government.

In Australia, in 2021, Meta and Google struck independent deals with news companies.

In March, Meta announced it would not renew its deal, saying news was not a priority for its users.

In New Zealand, Google has done its own deals with local outlets, under its Google News Showcase programme, launched in 2022.

There were several problems with the bill, wrote Peter Thompson, Associate Professor of Media Studies at Victoria University of Wellington.

It provided “no fixed benchmarks for payments,” and no guarantee any platform payments would be reinvested in news production.

Broadcasting Minister Melissa Lee, who opposed it while in opposition, told The Spinoff, during an interview about Newshub: “Glen (Kyne, of Warner Brothers) also told me that the Fair Digital Media Bargaining Bill would have made no difference to their decisions.

“But I will hear what the Select Committee comes back with, and I will decide after that,” she said.

The above Report has been published under a special agreement with www.rnz.co.nz

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