Coronavirus: $50m government package to help media through crisis

Thursday, 23 April 2020

Broadcasting Minister Kris Faafoi announced the first stage of a two-stage plan to assist the media in April, 2020. (Video first published April 2020).

Media companies will get help worth $50 million from the Government to help them cope with a huge drop in income during the coronavirus crisis.

Broadcasting Minister Kris Faafoi said the help was the first stage of a two-stage plan to assist the media and would not be sufficient on its own to see the sector through a prolonged period of restrictions and reduced advertising.

'A second package of support is being developed and will be submitted for the Covid-19 Budget discussions in May,' he said.

MediaWorks chief executive Michael Anderson described the government aid as 'not insignificant'.

Broadcasters will not have to pay transmission fees to state-owned company Kordia to broadcast television channels or FM radio channels for six months, or pay RNZ for AM transmission costs, under the first stage of the plan.

The main beneficiaries of that assistance, which will cost a little under $22m, will include TVNZ, television channel Three owner MediaWorks, Prime TV-owner Sky Television and Maori Television.

* Government finalises media support package

Print and online companies NZME and Stuff appear likely to get a share of $11.1m in 'special assistance'.

* Media company NZME cuts workforce by 15%

* MediaWorks asks staff to take 15% pay cut**

Broadcast media will also get the bulk of the benefit from a decision to reduce media companies' contributions to NZ On Air screen content by $16.5m in the 2020-21 financial year.

The Government will provide $11.1m for 'specific targeted assistance to companies as and when needed'.

New Zealand Herald owner NZME and Stuff could be among the main beneficiaries of that element of the package, which is tipped to see government agencies given more cash to buy more print and digital advertising, or at least to bring forward their purchases.

Faafoi also announced government departments would get $1.3m to buy subscriptions to news services, which could provide a boost to paywalls operated by NZME and some niche publications such as the National Business Review.

NZME was not able to immediately estimate how much it thought the package might be worth to its company, but chief executive Michael Boggs said it would help support and sustain journalism and broadcasting in New Zealand.

'The revenue challenges we currently face have been well documented.

Broadcast media, including TVNZ and television channel Three owner MediaWorks, appears to be among the biggest beneficiaries of the short-term assistance.

'We're looking forward to working with the Government on the package announced today, as well as longer term initiatives to ensure the New Zealand media industry is healthy and vibrant,' he said.

Stuff chief executive Sinead Boucher said print and online businesses 'which employ the majority of journalists in the country' would not get the same level of benefit as the broadcasters at this stage 'and certainly not at the scale needed to make up for the severe impact on the revenues that fund journalism'.

'Alongside the bigger companies like us are many smaller publishers who also have a very important role to play in the media eco-system in New Zealand,' she said.

'We would have liked to have seen a package that went further in recognising the need to preserve that journalism across a wider spread of media, through a time when it has never been more needed and more in demand.'

Newspaper Publishers' Association editorial director Rick Neville said the publishing industry was pleased to see the Government respond 'so rapidly with its package to assist some branches of the media'.

'However, most of the benefits will go to broadcasters and there's very little to help news and magazine publishers who are feeling huge economic pain from the advertising slump,' he said.

Better Public Media director Myles Thomas said the package appeared 'slightly misdirected'.

'If the target is to help news media, as Faafoi says, then the choices to help TVNZ, MediaWorks and [Sky-owned] Prime aren't really on target.

'From a policy point of view, the goals don't seem to match up with the mechanism,' he said.

Stuff chief executive Sinead Boucher said media businesses that employed the most journalists weren't getting the most help.

TVNZ chief executive Kevin Kenrick welcomed the relief it would receive on transmission costs and NZ On Air contributions, which is together expected to save TVNZ about $6m.

'The minister has indicated that this is the first part of a wider industry support package and we look forward to hearing the rest of the Government's response in the coming months,' he said.

'Like other advertising-funded media organisations, the financial challenges confronting TVNZ are significant and they won't be solved by a single solution.'

MediaWorks chief executive Michael Anderson was perhaps the most enthusiastic, describing it as 'not an insignificant package'.

'We need to do some further modelling to work out what this means for us and how it will affect us, but it's a positive start.'

He indicated MediaWorks would have eyes on some of the $11.1m in 'special assistance' funding.

'We will be continuing to have discussions with Government, particularly on the discretionary fund.'

Faafoi said the short-term measures had been proposed by media companies themselves during workshops held with the Government.

They would help the industry 'get through the immediate crisis and dramatic drop in advertising revenue experienced since the start of Covid alert level 4', he said.

'We have chosen the proposals that have a relatively quick impact to get support out the door as fast as possible.'

The apparent focus on broadcast media reflected the fact that transmission costs were high, he said.

Faafoi said the mooted merger of RNZ and TVNZ was 'on ice'.

'It doesn't necessarily mean it is dead, I just think there are wider issues for us to contend with right now,' he said.

Consultant PWC was still expected to deliver a business case for the merger to the Culture and Heritage Ministry in July, he said.

Faafoi said the short-term package relief would allow time for work to be done on 'longer term strategies' to ensure the sustainability of the news media.

'The media sector is only the third sector, after primary health care and aviation, to receive a specific pool of funding over and above the wage subsidy to help it get through the Covid-19 crisis,' he said.

'This support reflects the essential role media play at this time in delivering access to reliable and up to date news coverage and keeping New Zealanders connected while in lockdown.'

The Government could prioritise advertising in local media, rather than on platforms such as Google and Facebook, and look at 'competition' issues as part of its second tranche of assistance, he said.

It spent about $110m a year on advertising, of which about 30 per cent was spent on 'online platforms', he said.

Faafoi also indicated more funding could be provided to an existing scheme that helps fund local reporting through NZ On Air, and which is designed to support local democracy.