Government intervention to save Newshub ‘highly unlikely’

by protoketoacvdiet

Prime Minister Christopher Luxon


Photo: RNZ / Angus Dreaver

Prime Minister Christopher Luxon says the Newshub shutdown is shocking and saddening, but the media industry needs to innovate.

Owner Warner Brothers Discovery has proposed shutting the news outlet – which began in 1989 as 3 National News – by the end of June, potentially axing hundreds of jobs in the process.

“I mean, you’ve got to continue to innovate like every other business does to try and find innovative business models to make businesses like that stack up,” Luxon said.

“But the reality is we are seeing that, we have seen what was traditional press outlets now doing video, we’ve seen a multimedia approach to it.

“I mean the reality is that consumers are choosing their news and their media through lots of different channels and lots of different multimedia outlets. We have a plurality of media voices in New Zealand, that will continue, but I just want to acknowledge – pretty tough day.”

The closure will leave state-owned TVNZ and Whakaata Māori/Māori Television as the only newsrooms broadcasting on free-to-air television.

Asked what role politicians undermining trust in the media has played in the decline of the industry, Luxon put the onus back on the media industry.

“If there’s a trust challenge with the New Zealand public from media outlets, that’s a collective decision that they need to make – to ask questions about why aren’t they connecting, why aren’t they actually being able to build sustainable business models. There are outlets that are actually working really hard at that and have got different approaches to it, different business models.”

Deputy Prime Minister Winston Peters’ most recent post on social media site X (formerly Twitter) was a criticism of the media, quoting former Newshub head Mark Jennings.

Challenged again over the matter, specifically over the approach taken by Peters, Luxon said: “No politician will appreciate the media coverage that they get, or the media’s appreciation or assessment of them – I get that. But the media play an important role in our democracy, it’s something that should be incredibly well valued.

“In the case of the deputy prime minister and many other politicians around this place, they all have public and private views of what the media are… he’s completely allowed to express his opinion, he’s got long-held views that are well understood and well known.”

Luxon said it was “highly unlikely” there would be any government intervention in the sector.

“Massive change in consumer habits about in how media is being consumed and how news is being undertaken and yet at the same hand you’ve seen a loss of traditional advertising revenue in the sector as well, and so that requires massive innovation for businesses, media businesses, to reinvent themselves, to innovate, to actually find different ways to be able to get their business models in place. So it’s unlikely.

“Media players in the marketplace are completely free to innovate as they wish to make sure that they can build a sustainable business model that works for the customers that they serve…. there are some media outlets that are doing that and are working incredibly well.”

He acknowledged that “we need a well functioning media environment here in New Zealand”, but says “we have a range of media voices and a plurality of voices… in a multimedia, omni-channel kind of way, and that will continue to develop”.

“My conversations with Warner Brothers Discovery today, a $20 billion media global company that couldn’t find an operational model to make it work for them, says to me that any government intervention they had in that case would not have changed the decision.”

Broadcasting, Communications and Digital Media Minister Melissa Lee said she had no concerns about a lack of plurality in the media.

“I think journalists actually losing jobs – as a former journalist – I actually feel for them, I just think it’s a sad day,” Lee told reporters as she was heading into the debating chamber on Monday afternoon.

“Having said that, plurality is not an issue, because the way that people consume media has actually changed. We’re no longer sitting in front of a television box watching the news at six o’clock. People are consuming media more on their mobile phones, on their iPads, on digital platforms as well as on their computers, and I think media have actually changed the way they have produced news as well, it is no longer just broadcast.”

National MP Melissa Lee

Melissa Lee
Photo: RNZ / Angus Dreaver

In addition to its 6pm broadcast, Newshub also produced a number of current affairs shows and ran a digital news operation, creating original content in addition to hosting material produced for TV. It also used to run a radio news division.

Lee said she spoke to Newshub boss Glen Kyne about the cuts on Tuesday night. He told her nothing could have helped prevent it, including a faster resolution around the Fair Digital News Bargaining Bill.

“He basically told me about the announcement he was actually making today… he said there was nothing that could have actually helped, it was actually a failure in terms of the way they’re advertising for their news, it was actually a massive drop and nothing could have actually helped.”

‘I didn’t expect them to be closing’ – Jackson

Willie Jackson sitting in Parliament's  Economic Development, Science and Innovation select committee regarding the Fair Digital News Bargaining Bill, 15 February 2024.

Willie Jackson
Photo: VNP / Phil Smith

Labour media spokesperson Willie Jackson, who was broadcasting minister in the previous government, said Newshub briefed him about financial difficulties last year – but the closure was a surprise.

“They did say things were not going too well, they didn’t ask for any assistance in terms of funding but they were pretty clear that things were not too good. I didn’t expect them to be closing… or making announcements in terms of closing four, five months later.

“We had one initial meeting over the Kordia fees… so you’ll have to ask them why they didn’t pursue it, because I think that what they had put up was reasonable but at the time we didn’t go down that track.”

He said it was a very sad time for the country.

“I think it’s very very sad, I went down and had a bit of a korero with some of the workers down there wishing them all the best. It was very much a shock for them.

“This is some of the things that we talked about when I was minister – that it’s a changing world in terms of the media, the pressures on companies are huge. We have to come up with innovative ways of supporting companies – we came out originally with our idea in terms of the merger, obviously that didn’t go to plan but we rolled out other strategies to support different media companies.”

He questioned what the government’s strategy now would be.

“You’ve got to ask what the strategy is – I mean it’s not easy to support these commercial [companies], all of a sudden come up with the funding for these commercial entities, but it is easy to work with them.

Newshub is owned by Warner Bros Discovery.
Photo: RNZ/Nick Monro

“Our industry’s been ravaged. You know, I’m a former broadcaster, I’ve been at the coalface, I’ve seen it, I’ve heard it, and over the last 10 or so years half of our broadcasters have lost their jobs, half the journalists have lost their jobs.”

Labour leader Chris Hipkins said the Newshub closure will not be good for the health of the democratic system.

“I think it’s a sad day for democracy, so first of all I want to extend my thoughts to everybody who’s been affected by that announcement, I know that it will be a really uncertain time for them.

“But actually, bigger picture, it’s actually a sad day for the democratic process. I think democracy relies on an informed citizenry, being informed relies on debate, and that relies on a diversity of sources and information.

“Two TV news networks is relatively modest by international standards and I think going down to one isn’t going to be good for the overall health and vitality of our democratic system.”

Seymour wants ‘competitive media market’

David Seymour

David Seymour
Photo: RNZ / Samuel Rillstone

ACT leader David Seymour also said it was a sad day for New Zealand’s democracy, and floated the idea of extracting more money from TVNZ to help level the commercial playing field.

“It’s a sad day for many employees personally, it’s also a sad day for New Zealand’s democracy which requires a competitive media market so that people can get a wide range of views about what’s happening in their country.

“I think there’s a question mark around whether the government’s ownership of one TV channel and the poor returns it’s demanded as a shareholder has actually contributed to an uncompetitive market. As I have some responsibility, I’ve actually requested some advice about that very issue this morning… it may well mean that they have to make a return on equity just like every other business in New Zealand is required to do.

“What is critical is that we have a competitive market where New Zealanders can get a range of different views. I don’t think it helps for the government to try and run two TV stations, but it should be ensuring there’s a level playing field which – by the way – was work that we had begun weeks before any of this happened.”

He suggested another commercial operator might step forward “to use that equipment which is still there, and those people which are very valuable”.

He pointed to the history of the channel as an example of why a plurality of media is important, pointing out New Zealand had just one channel showing news until television was deregulated in the late 1980s.

“I think New Zealand was a much darker, drabber place in those days with a lot less debate and frankly a less healthy democracy as a debate. That’s why I say having a competitive media market with multiple sources for people to get news from is important, I don’t think the government moving further into the market is the solution. The government assessing its role in the market – it might be high time that happens.

“The government’s not here to prop up any particular medium.”

‘Disaster for this country’s democracy’

Deputy Prime Minister Winston Peters

Winston Peters
Photo: RNZ / Angus Dreaver

Deputy Prime Minister Winston Peters framed the situation as a disaster for the staff and New Zealand.

“A critical part of any democracy and free society is the fourth estate, an independent fourth estate, and I’m concerned about where we’re going now,” he said.

“Frankly for those 300 or so staff and their spouses and their families this is an absolute disaster. But it’s also a disaster for this country’s democracy.”

He would not make any commitments about possible policy changes for the media industry.

“Have I personally considered it? Yes, I have. But I’m not going to say any more than that.”

He took umbrage at the suggestion his own attacks on the media could have contributed to the levels of falling trust in the media he has cited.

“I’m calling out the truth in this matter and you know it’s woke, and all the evidence is there for that. And there’s also serious potential that where we’ve got to in terms of the lack of substitution towards the media is because they’ve lost substantial trust from the public.

“Now, those are facts and if you’re wanting to turn this into some sort of argument blaming me, then you’ve got to be joking, given in my campaign they boycotted me.”

It was not clear what alleged boycott Peters was referring to, as Newshub did cover him and his party during the 2023 election campaign.

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