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Hansard transcriptInquiry into the Government response to COVID-19Epidemic Response Committee15 April 2020MembersHon Simon Bridges (Chairperson)Kiritapu AllanHon Paula BennettMarama DavidsonHon Ruth DysonHon Paul GoldsmithMelissa LeeDavid SeymourMichael WoodHon Michael WoodhouseWitnessesDr Gavin Ellis, media commentatorHon Kris Faafoi, Minister for Broadcasting, Communications and Digital MediaSinead Boucher, CEO, Stuff Shayne Currie, Managing Editor, NZME Kevin Kenrick, CEO, TVNZ Michael Anderson, CEO, MediaWorksPaul Thompson, CEO, RNZ David Mackenzie, President, New Zealand Community Newspapers AssociationMark Jennings, Co-editor, Newsroom Duncan Greive, Managing Editor, The Spinoff Pattrick Smellie, Chief Executive, BusinessDesk Peter-Lucas Jones, Chair, Te Whakaruruhau o Ngā Reo Irirangi Māori

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HANSARD TRANSCRIPT: INQUIRY INTO THE GOVERNMENT RESPONSE TO COVID-19

Bridges Well, good morning to my colleagues and to anyone listening or watching at home today. We’ve got a COVID-19 committee on the media landscape in light of what’s happening with COVID-19. And if I can just run through, very briefly, today we’re going to hear from media commentator—effectively, our independent witness—Gavin Ellis, then we’ll have Minister for broadcasting, Kris Faafoi, and then we will roll through significant media organisations: New Zealand Stuff, NZME, Television New Zealand, MediaWorks, Radio New Zealand, the New Zealand Community Newspapers Association, Newsroom, the Spinoff, and BusinessDesk, before we hear again from Gavin Ellis.Can I firstly say my apologies to many media organisations who would, I’m sure, merit being on this committee and giving us a sense of what is happening for them. Unfortunately, for time reasons, it was never going to be a complete picture. And I also just note we were keen to have Māori TV and the NBR, but unfortunately, for very understandable reasons, neither of them can be with us today. We’ve got a very full agenda, and so I’m going to be very strict, as strict as I can be, on timekeeping. And I see Ruth Dyson smiling wryly at me, but we’ll see how that goes. Can I also just say and acknowledge right at the outset that we appreciate this is a very difficult time for many staff in the media with wage reductions and uncertainties, and I just want to acknowledge that and I’m sure the committee will join me in that regard.On that note though, we really appreciate having Gavin Ellis, a former New Zealand Herald editor and now an academic and prominent media commentator, to give us your remarks, Gavin, on the state of media in New Zealand today.

Ellis Thank you, Mr Chairman, and thank you for the opportunity to address the committee. We’re talking about a very broad landscape, so I’ve taken the precaution of writing a submission that I believe the committee clerk has forwarded to you this morning. So I just intend to paraphrase that submission. Now, I have spoken to a large number of people in the industry in preparation for today, but I do point out that these comments are mine, and they may not reflect the opinions of individual media organisations.

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Now, we come into this, of course, with the announcement yesterday of the loss of 200 jobs at NZME. That follows the loss of 300 jobs when Bauer magazines closed down. Two further magazines closed yesterday. Now, I don’t think there’s any more graphic illustration of the dire situation in which the New Zealand media find themselves in in this crisis, and I fear that those job losses are not going to be the last, because what happens here is mirroring what’s already happened elsewhere. The New York Times has gauged, after canvassing the industry, that perhaps 28,000 people employed in the news media companies have been either laid off, furloughed, or had their pay cut since the arrival of the coronavirus. In the UK, analysis estimates that maybe a third of front-line journalists will lose their jobs.So we really are in an existential crisis here, because advertising revenues in New Zealand are absolutely in freefall. I estimate the declines since the lockdown to have been between 50 and 75 percent, and no medium is exempt from that. Some have been further impacted, of course, by the inability of community newspapers and magazines to continue publishing during the lockdown, but all of them—all media—are reporting a dramatic loss of cash flow, and their concern is that this loss of cash flow will flow well into the period after the lockdown ends. They’re further worried that there may be a repeat of what happened after the GFC, where 30 percent of the advertising that was lost during the GFC simply didn’t come back to traditional media. They’re worried that there will be a return of that.And, of course, the elephant in the room in all of this is the impact of the social media companies—Google, Facebook, in particular—that are siphoning off at least 70 percent of the $1.26 billion spent on digital advertising each year. And it disturbs me that Government uses these digital platforms—Google, Facebook, and so on—at an exponentially growing rate, and only a fraction of their digital spend is going to local media platforms.

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Now, media companies are really doing their best to cut costs, and you’ve seen some of those announced in the last couple of days. We’re also doing all the business reviews. The bottom line of all of this is that there will be contractions. Now, no secret that they’ve had problems—I think Bauer and the closure of Radio Sport are more indicative of systemic problems than COVID-19, but what this resulted in is that they went into the crisis with very little in reserve, financially and resource-wise. So they’ve got no fat to play with. Now, some of them had a little bit of headroom for borrowing and so on, but many of them didn’t, and I don’t think any of them have got sufficient headroom to see it through the storm.So the bottom line is that all commercial media are in trouble; their needs are immediate. Without some help, there’s no guarantee that that overall, overarching institution of the media will survive in a form that’s suitable for a free and democratic country like our own. Now, we hear the refrain “Government’s not in the business of propping up failing enterprises”, and in normal times I agree with that, but these aren’t normal times and news media are not normal enterprises. So I think there is a special case to be made. They’re not too big to fail, but they certainly are too important to fail—certainly the main ones.Now, I think that it would be wrong for the Government to think that it can sustain the democratic institutions of the media simply by ensuring that State-owned media survive. Yes, they’re very important and they need sustaining, they need support, but they are not the be-all and end-all of a democratically based media landscape. There’s got to be a whole-of-industry approach to this, not picking sides or picking apparent winners. Equally, it’d be folly, I think, to give more weight to new media than traditional media. Newspapers and linear television and radio are the engine rooms of journalism in this country. What is produced by those media outlets flows through to all of the digital outputs that we have, including, I might say, social media. The vast majority of posted news items on social media come from those traditional newsrooms. So we need to make sure that traditional media aren’t disadvantaged in any help that’s forthcoming.

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It’s also unwise to think of traditional media as no longer being the audience’s media of choice. Since the announcement of the lockdown, audience growth on traditional media has been phenomenal. Now, our domestic digital news platforms have attracted far more unique browsers in this period than they even did during the Christchurch mosque attacks, the largest attracting audiences of around 11 million a week—11 million viewers a week—and all them are reporting exponential growth. Now, the average daily unique browser aggregated across all mainstream news media—the daily uptake has risen from around about 620,000 to over a million. That gives you an indication that traditional media is where people are going, and the reason that they’re going there is that the public need to access timely and factual information from trustworthy sources at a time when social media are awash with rumour and falsehood.Now, just finally in this overview of where things are at, it would be remiss of me not to include in this submission the plight of the magazine industry. They are in an existential fight too and, in the case of the iconic titles that were closed without warning by Bauer, a desperate need for resurrection. Magazines weren’t included in the essential business category in spite of the fact that magazine publishers work remotely, send their files over the air, they print largely without human intervention, and they distribute through contactless channels. So they offer high economic and social benefit, really with very low social risk. They represent thousands of jobs, a large number of companies, and they’re read by about 70 percent of New Zealanders, and, I think, importantly, they’re indispensable mirrors of our unique culture and habitat. They’ve got to be urgently granted the same essential business status as other media—if not, they’ll fail.

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Now, one media representative described the plight of the media at the moment as in need of emergency triage, and I think that’s right. There is an immediate need, but I think that the Government really needs to adopt a three-stage process: deal with immediate assistance—and I’ve set these out in my submission. The most immediate need is to try to help them recover some of that lost cash flow through diverting already committed Government advertising spend, for example; suspending regulatory and transmission costs for broadcasters—there are a large number of things that can be done that I’m sure the Minister is well aware of. In terms of magazines, the easiest thing for them is just let them publish. That’s the first thing. So there is an immediate need.Post-lockdown, the Government needs to facilitate and fast-track some restructuring that’ll buy the media time to find longer-term solutions, and in this I mean fast-tracking the move to a new entity by State-owned media, facilitating and really fast-tracking, sidestepping the Commerce Commission and the processes that exist even for distressed businesses, to allow the merger of NZME and Stuff, to buy them some time. Similarly with MediaWorks—you know, their television arm is under threat; Oaktree wants to get rid of it. There’s got to be a way found of facilitating that.Now, there are a number of means that the Government can employ, one of which is to make these businesses more attractive by changing their tax status. I’ve suggested in my submission an L3C status like they have in the United States for low-profit public service - oriented businesses. It’s well worth the committee and the Government having a look at.And, finally, stage three is the long-term post - COVID-19 reconstruction of the industry. It is in need of a total rethink, redefining the media ecosystem and replacing outmoded ownership structures with more sustainable models. Now, I suggested last week the convening of a Bretton Woods Conference—you know, something that after the Second World War reset the financial structures of the world. We need something of that scale, reduced to domestic proportions, to really look at the long-term future of our business.Now, Mr Chairman, I had set out a number of questions at the end of my submission. I don’t know whether you want me to go over them—I’ve run over time a little.

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Bridges Yeah, look, go on. I think what we’ll do, though, is I’ll make the executive call that even though I know there’ll be members brimming with questions, we’ll move straight from you, once you’ve done that, to the Minister, but we’ll come back for a wide-ranging discussion, I’ve got no doubt, at the end of it all, so we hear all perspectives. But yeah, look, briefly, if you—

Ellis OK, a series of questions: what’s the magnitude of the required cash injection to keep our media functioning in the short term—the cash flow issue? How much Government spending is there on advertising each year across all sectors, and how much of that expenditure goes to international search engines and social media, and how quickly can that spending be rescheduled, and what’s the best way to apply it to local media advertising inventory?Also, what steps can the Government take to fast-track that restructuring, that post-lockdown restructuring that’s necessary, because I’m fearful that if the financial standing of the owners of MediaWorks and Stuff decline sufficiently, they may be minded to follow Bauer and simply close New Zealand operations. We must ensure that doesn’t happen. And what tax concessions can the Government come up with? Now, I’ve suggested the L3C system, which I think it really should look at. And also, finally, would the Government consider becoming the convener of a cross-party - supported conference to produce that long-term blueprint for media reconstruction?

Bridges Well, thank you very much, Gavin—really appreciate that, and as I say, we will come back to you. Let’s move now to Minister Faafoi. We appreciate having you, Minister, and we’d welcome some brief introductory remarks from you before we move on to some questions.

Faafoi Thank you, Mr Chair. I will keep it brief, but, obviously, the committee, and after Gavin’s submission, needs no reminding that the country and the media sector are in very uncharted territory, and through it the essential role of the media has been to help us navigate, inform, and scrutinise the response to COVID. I’m aware that many of them are submitting today, but they will inform you, as Gavin has said, that they’ve never been busier in terms of their journalistic output and numbers of viewers, listeners, readers, and page impressions, and I think we have to all collectively thank them for that work. They’ve really stood up.

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But they’ll also tell you that for a sector that was already facing serious headwinds, that COVID, as it has for nearly every sector, has affected revenue, as Gavin has spoken to, and put many of them in either short-, medium-, or long-term difficulty—and if I can return to that shortly, Mr Chair, because I also want to briefly touch on telecommunications as well, because I think they are a sector that’s also stood up and delivered in terms of our ability to work from home and stay connected to our friends and family outside the bubble has been greatly aided by the network standing up to alert level 4. Some families and communities face challenge, but, on the whole, being able to use Zoom, being able to access on-demand content, and being able to watch something like a select committee online has aided our ability to stay connected and be questioned, and we’re receiving daily updates that the network is remaining stable.Mr Chair, I did want to use the select committee to point out one thing and reinforce, though, the dangers of misinformation that has been spread on social media about a link—well, there is no link—between COVID-19 and 5G technology. There simply is no connection [Inaudible] between the two, but what I’m more concerned about, though, is the recent increase of attacks on telecommunications equipment such as towers that is allegedly linked to the opposition to 5G. They’re putting critical services at risk—sometimes mobile services are out of action, and that’s affecting the ability of people to use services such as [Inaudible]. Everyone’s entitled to voice their opposition if they feel the right, by I don’t think at a time like this that they should put the safety of others at risk in doing so, and I think that’s enough said about that.Mr Chair, can I return, before questions, to the committee’s focus today, which is the media, to update the committee on our work with the media sector to set out how we can support them both in the immediate term during the COVID-19 emergency and also into the future. I’ve spoken with a large number of media bosses in the past week to get a gauge on where they’re at and what would help both in the short and long term. As Mr Ellis has pointed out, they do have immediate needs.

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The Government is developing a short- and long-term package of support for the media industry to deal with the challenges that they’ve identified, that will meet, hopefully, the immediate needs, as Gavin has pointed out, and also deal with the longer-term challenges that face media and, importantly, I think, as has been highlighted here today, sustainable journalism in the future. I’ll be able to, hopefully, announce the outcome of that work within the week. However, I guess I’d like to keep it short and I’m happy to take any questions.

Bridges Thank you very much, Minister. We appreciate having you before us, and can I just echo your comments on communications more broadly—well said. I think we’ve heard well from Gavin the predicament of the media, the strain even before COVID-19 in terms of revenue and the loss of that to the big social media outfits. I’m just interested in what you’ve said about announcements coming soon. I’m not going to pry and try and squeeze that out of you in advance, but what I am keen to understand is, I suppose, conceptually, how you perceive it. Is this a situation where you bluntly bail out particular organisations, or is it something where there’s another way of doing this so that we strengthen the overall media environment without specific rescue packages, if you like, for those media organisations? [Inaudible] How do you see the rescue, if you like, of the media?

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Faafoi Well, I think if we look at the short-term, or triage, as it’s been put, probably the latter of the suggestions, Mr Chair. I think there are—and there have been discussions either directly with me and my office, or through some workshops with the Ministry of culture and heritage, with most media entities to see what in the short term can assist. They may go through some of those—the media entities may go through some of those initiatives with you today. We haven’t made final decisions, so we can’t go into specifics, but the likes of some of their initiatives that Mr Ellis has talked about—transmission costs, Government advertising being brought forward—are some of the discussions that we’ve been having with those media entities that would, certainly from the feedback that we’ve been getting directly from them, assist in the short term to give them some certainty and cash flow over the short to medium term. We’re actively discussing that amongst Ministers at the moment, and, as I say, we’ll hopefully have some use for them shortly. That, I think, will give them the certainty to deal with some of the longer-term issues post-COVID that Mr Ellis has dealt with, but I think we’ll have some positive news for them on that soon.

Bridges And just finally from me: how do you conceive of the ideal state, if you like—if there can be such a thing—for media in New Zealand? Is it a big, strong public broadcaster with a public broadcasting ethos? Is it a much more competitive model of different perspectives competing? I mean, what is your vision of what you would ideally like to see for New Zealand media?

Faafoi Look, we’ve maintained for a long time that plurality is very important. So while there’s making sure that we have a strong public service media, and that’s the moves that we’re making which we announced earlier this year, making sure that we have a plurality of voices—different perspectives—obviously, is very important. That’s been challenging in the last seven to five years because of some of the commercial realities that Mr Ellis has been talking about in terms of advertising revenue declining. So some of the initial discussions around some of the initiatives that have been mentioned already this morning were beginning, but, as you would have seen from our announcements in January, our main priority was to make sure that we shored up what the Government actually owns and focusing on strengthening public media.

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Obviously, COVID has meant that with the state of each media entity and the collective state of the media, that focus has to change, which is why we are working on that short-term package. And the long-term package, which I think we need to make sure can sustain journalism in the long term, because I think of the very important function that journalists play, especially at times like this. But, again, to talk to the submission of Mr Ellis, it’s not just COVID-related issues; there have been a lot of issues in and around journalism—the dearth of local journalism—over the years that I think we’re going to have to deal with in a bigger-picture way once we deal with some of the short- and medium-term issues that COVID has presented the media sector.

Bridges Thank you. Look, we’ve got a plethora of questions here. So if I just ask members: one question each. And we’ll just move through them in good, quick succession.

Wood Thank you, Mr Chair. Gavin Ellis, thank you very much for your submission, and what I valued about that was not just your assessment of the problems that media companies are facing at the moment but some of the underlying structural long-term problems. Now, I’m not going to ask you to put forward the solutions to those. You’ve proposed an approach—a Bretton Woods - style conversation around that. But I did want to ask your opinion a bit more specifically about one of the problems that you identified in your written submission. You talked about outdated ownership models and how they might be contributing to some of the underlying issues. Can you briefly explain that a little bit more, please.

Ellis Yeah, so I think that the current model of news media being a viable investment opportunity—investment means putting your capital into something in the expectation of getting a reasonable return on that and also getting growth from the value of your shares. Now, I think in both instances, the ability of news media to continue to deliver that to investors is questionable. We look at the way that share prices across media companies have tanked. Many of them have not paid dividends for more than a year. I’m really starting to question whether news media is a viable normal investment opportunity.

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Now, when I mention the L3C system in the United States, that was actually created for rest homes. They were businesses that were providing a public service, but their viability was put into question by the taxes that they had to pay. They didn’t make very big profits. And some states instituted the L3C system—it’s low-profit, limited liability companies—whereby people who invested somewhat altruistically in them could get a small return, roughly about what they would get from a bank deposit, and in return for that, those companies paid no taxes. Anything above the accepted rate of return had to be ploughed back into the operation. Now, that’s the sort of future that I see for news media—that they are sustainable but they are not, in a capitalist sense, viable opportunities for normal forms of capital investment. They require a more altruistic placement of money. And, you know, there are communities that would perhaps do that, or local interests may want to, for example, buy a regional newspaper or regional radio station and apply for that sort of status. So I think those are the sort of opportunities that we have, but it does require some blue skies thinking, and, in a way, from the media companies’ point of view, it’s a little bit like what happened when C.P. Scott formed the Scott Trust for The Guardian. Some people could not understand why anybody would want to forgo the traditional right of ownership. They did, and of course The Guardian has gone from strength to strength, though it requires a different type of thinking, but it also means that traditional media companies, rather than going bust—and their trajectory is a downward one—rather than going bust, they become self-sustaining but low-profit enterprises; trusts, if you like. That’s a sort of possibility, but there are many other iterations of ownership that could be explored.

Bridges Thank you. Questions for the Minister only, please.Davidson Kia ora. Thank you, Gavin. Mōrena Minister. Going just

off what Gavin has talked about and the sorts of possibilities, Minister, I know you can’t go into detail about what’s coming out, and I know you’ve flagged some of the high priorities. Are you able to drop down a little bit more into the principles and the priorities that are on your radar that you’re thinking about as you’re developing this package?

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Faafoi Yeah, obviously, I mentioned before the plurality of the media to make sure that we’ve got many voices in the midst of COVID. Maintaining as many people in jobs as we possibly can is important, and I’d note that a number of media organisations have taken advantage of the wage subsidy in order to maintain journalists and other staff within their entities as well. I think when we get to the wider piece of work, which is, obviously, the support package that we hope to announce soon, there are some issues about what the future of journalism is in New Zealand, as Gavin has already spoken about, that we seriously have to look at, and what other types of ownership models that might be available to companies. I think at the heart of that has to be how the Government looks at supporting journalism in the future. Through NZ On Air the Government has for over 30 years now supported New Zealand content, and to a degree a little bit of journalism through NZ On Air, but, as Mr Ellis has said, the sustainability of news operations is in serious question, but the function of journalism is extremely important for the functioning of a good democracy. And if we can’t be assured that necessarily the way that they’re commercially operating at the moment is sustainable and therefore can’t support the kind of capacity or types of journalism that we think we need for New Zealand, then I think post-COVID there’s more of an appetite to make sure that the Government can possibly step into that space. How exactly that is structured I think could be talked about at a kind of forum, as Gavin has spoken, or possibly not. But I think there is an important function of journalism that needs to be supported and sustained in New Zealand going forward and in the long term.

Davidson Thank you.Seymour Thank you, Mr Chair. Thank you, Gavin Ellis. To the

Minister: one of the factors that Gavin has cited in the demise of magazines—only one factor, but an important factor—and I think it applies to community newspapers too, is the prohibition on them carrying out their physical operations. I wonder, as the Minister most relevant, what sort of representations you made to your Cabinet colleagues to have magazines and community papers as an essential service and how that was received by your Cabinet colleagues.

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Faafoi Look, in the early days, Mr Seymour, of alert level 4, we tried to be as pragmatic as possible. We were approached by a number of [Inaudible] and entities from around the Parliament around the types of community newspapers that either support rural areas where there’s low levels of connectivity and also areas or communities that don’t necessarily have English as a first language. So in the very early days, we managed to be as pragmatic as we possibly could and extend that out. I think you pointed to one of the issues that those particular formats have in the media is that they’re physical, and whether we like it or not or whether the entities like it or not, there is an advantage that broadcast or internet media have in a COVID world, and it is that they don’t require any contact. At the very heart of decisions that we’re making around essential services at alert level 4 was the minimisation of movement and breaking the chain, and therefore the decision was made—and everything is not perfect—that both magazines and some community newspapers weren’t essential services because of the physical nature of their delivery. This is not necessarily the case in every case, but a lot of community newspapers are delivered by young people who do it for pocket money, and I apologise to them if they haven’t been able to do that over the last three weeks, but ensuring their safety and making sure that we minimise contact has been extremely imperative over the last three weeks in alert level 4. And we’ve had representations from the Magazine Association and also the community newspapers where we’ve been able to assure that some of that delivery is contactless and working through delivery networks that already exist, like New Zealand Post, and we were happy to be as pragmatic as we possibly could. But the line was drawn where we couldn’t guarantee that the safe delivery was assured.

Seymour So is a change coming?Faafoi Oh, look, I’m speaking every day to people like The Star

in Christchurch, who are still advocating that they can do it in a contactless way. We are still having conversations about that, but we’ll, obviously, be making decisions about what level 3 and 2 look like shortly, and be able to give the likes of magazines and community newspapers more certainty about how they can operate.

Seymour Thank you.

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Bridges I mean, I may be about to show my ignorance, Minister, but where I live the days of paper boys and girls delivering papers is long gone. It’s now adults in a car. I mean, is there anywhere where there’s paper boys and girls any more? And so are the issues that you’re actually raising particularly real?

Faafoi I think they are, and, as I say, there’s different delivery modes for different community newspapers. What we’ve asked primarily is for them, if they can work online, to do that, either via social media or their own websites, and some have been able to do that relatively quickly. Some haven’t been able to necessarily make the assurances around delivery that is required for alert level 4, and I think dealing with all the different possible permutations of that in the rush to get to level 4 was nigh on impossible. Again, we wanted to make sure that we kept people safe. I can only speak for my local paper, Mr Chair, and it’s two or three very earnest people who are probably 15 or 16.

Bridges OK. Melissa Lee, then Paul Goldsmith.Lee Thank you, Mr Chair. To the Minister: Gavin actually

talked about the freefalling of advertising dollars in New Zealand. Some have actually gone 50 to 75 percent loss, and a lot of Government advertising has actually been on different platforms like Google and other overseas digital platforms. One question is have you assessed how much Government advertising is actually spent on those platforms, and have you considered diverting that to our local media who are, in fact, suffering? And the second is: in relation to some of the media closures, including Bauer Media, the Government wage subsidy was actually rejected because that just wasn’t going to be enough, and also other issues. Do you think when you’re assessing and talking to the media organisations, are you looking at the health status of these media and how many of them can actually be resurrected after COVID-19?

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Faafoi Look, I’ll answer your second question first, if that’s OK, Ms Lee. We’ve been having very detailed conversations with all the major media entities in the last week to check up on (a) their health in the short and long term, and what the intent of their owners and shareholders might be. As you can imagine, I can’t go into detail about those conversations, because they’re all commercially sensitive, and if I did, no one would want to talk to us any more. But collectively there is a degree of varying pain across sectors, as I set out, and some more than others. And I think that’s why the short-term package that we’re dealing with will hopefully give them some of the both cash flow and certainty that they may need for six to 12 months in order for us to have some of these longer conversations. In terms of the question around Bauer, they made it very clear when we engaged with them at the end of March that they in no way wanted any Government intervention or wage subsidy help. When we first engaged with them, they had made it clear that they’d already made a decision to exit the New Zealand market based on, I think, probably, their previous 12 months and their forecast for the next 12 months. We asked them to see if their shareholders in Germany would contemplate if the wage subsidy would help, and the answer back was “no”. So, obviously, we feel for the staff and, obviously, the titles have cultural significance, but when your German owner says no, it doesn’t see any long-term future in it—as I say, they’d made up their mind.

Goldsmith Minister, obviously, the most important thing in the short term is getting the revenues up through advertising, and opening up the economy, not just to the magazine [Inaudible] but also to the businesses that provide the revenue through advertising. So I wonder to the extent to which you will be advocating vigorously within your Cabinet for an early reopening of magazines and allowing as much activity as possible, having followed what’s happened in Australia and the slightly less aggressive approach being taken there with similar health outcomes.

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Faafoi Well, at this stage, we have no intent to change our position as it stands at alert level 4. As I mentioned earlier, every entity and association is speaking to us pretty much on a daily basis, arguing their case, and I guess we’ll be making decisions in the next week about what level 3 and 2 look like, and their ability to operate there, so hopefully that will give them an idea of when and how they can get back into business. I didn’t answer one of Melissa Lee’s questions, which I think was related to that, around Government advertising spend, and we are doing some of that work in the longer-term initiatives that the Government may look [Inaudible]. I don’t think I would annoy the entities that we have spoken to in the last week, and the discussions that we’ve been having with them is asking them exactly how much Government advertising that they’ve had in the last 12 months to get an idea that if we were to bring advertising spend forward to increase cash flow, how much that would be, and how that might help. So, again, without saying we’ve made decisions, they are the types of questions that we’ve been having with the media entities directly. But to go back to your question, Mr Goldsmith, the public health filter is important, and making sure that people have access to immediate and important news on a daily basis was where the line was drawn. Some of the magazine companies will argue to chase up on that, but minimising movement and breaking the chain has been the focus—not just for the media sector but for every business in New Zealand.

Bridges Thank you, Kris. We appreciate your time. Better keep moving and start with the media organisations. I just welcome New Zealand Stuff, and I think we have one or all of Patrick Crewdson, Sinead Boucher, and Mark Stevens—I certainly saw Sinead. We welcome some brief opening remarks from you before some questions. So welcome.

Boucher Hello everyone, and thanks very much for the invitation to attend today. It is myself—I’m Sinead; I’m the chief executive—and Mark Stevens, editorial director, is here with me today. So just by way of context, Stuff is the largest domestic website of any kind, not just news, in New Zealand, and we have 49 newspapers and a few magazines span the whole country, ranging from the sort of Sunday national papers to communities and all sorts of daily papers in between.

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I think if the last few weeks have shown anything, they have shown that in times of crisis, the need for journalism has never been greater, and nor the role of the fourth estate more important, as we’ve entered some really unprecedented times in terms of the decisions that have been made and the things we’re all being asked to do. And we’re seeing that reflected very much in the audiences that are coming to Stuff and other news media over this time. Every day, an average of 2 million people have turned to Stuff.co.nz for the latest news and information about COVID, and hundreds of thousands more have been reading papers from their home. We’ve seen that as we’ve gone through the initial days of the, sort of, breaking news phase of the lockdown and what it meant, right through now to people turning more to advice about what they should be doing, what might be coming next, and engagement with news has gone through the roof as well. So it’s a bit of a cruel irony that at the time when people need and want this journalism more than ever, the key mechanisms to fund it have really just fallen off a cliff. Like most commercial media companies, Stuff is reliant on advertising revenues to survive, and unsurprisingly, given the enormous disruption that all businesses are enduring, that advertising has all but dried up since we entered level 2 and beyond. Stuff’s advertising revenue has more than halved in the weeks since March, and April is looking particularly dire. That’s been compounded, for us, by the cancellation of our major events, which, sort of, coincidentally fell at this time—Central Districts Field Days being one of them—and the inability to publish and distribute weekly community newspapers and our magazines. And I hear similar stories across the board—it really is an existential crisis for local news media companies. Everybody knows that news media was already facing challenges before this situation, and I think what’s really taken our breath away is the speed at which all of these issues have crystallised into a really urgent fight for survival and a real need to focus on getting through the short-term weeks and next few months before we can even think about what we look like when we come through the other side.

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Represented today here are a range of media businesses, from small specialised news and opinion sites to big companies like ourselves and NZME, MediaWorks, who are focused on local and national journalism. And we do not all play the same role in the media ecosystem, but I think we are all really important and a vital part of a healthy society and democracy here. For Stuff, our daily journalists are based all over the country. Their work is not always the most glamorous—you’re slogging away, day after day, on local stories and holding local institutions to account—but I would argue that it’s almost the most important because it’s the foundations for the rest of the media ecosystem, that type of journalism, and it impacts the lives of every New Zealander, whether they’re a reader of ours or not, by ensuring there’s a spotlight trained on those who are in power and holding them to account for their decisions. I think the other thing about this crisis—it has really thrown the spotlight on the need for journalism versus social media. The Minister referred earlier to that myth doing the rounds that 5G is related to the spread of the COVID virus. There are several examples of the social platforms fuelling the spread of quite dangerous fake news and misinformation about the COVID virus, its causes and impact. Not just the 5G example, but two days before we actually went into lockdown, there was a rumour doing the rounds on social that we were about to go into lockdown. Not a single news media company here in New Zealand reported that, but somehow everybody seemed to know about it and be talking about it and be preparing for it. And the spread of that kind of news—fake news—has been enabled and funded by the institutions and businesses that advertise on those platforms, and the Government included there, but it’s the news media that is devoting its resources, through its journalism, to exposing those lies and debunking the myths and presenting accurate and balanced coverage that people can trust.

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The global industry has been challenged for a long time now, and it really has been because of the movement of consumers and advertisers to digital. We’ve benefited in some way from that, but the vast majority of that advertising money has gone to Google and Facebook, and we’re competing against entities that are not operating under the same regulatory framework, paying the same tax against us; who are in many ways being rewarded, through the spend of advertising money, for some pretty bad behaviour in the terms of misinformation that they’ve spread over months and years. And I think one of the fallacies that we’ve all struggled against is that somehow those platforms need to be used by Government and others because of the reach that they have. Well, Stuff almost has the same reach as Facebook—Stuff alone, let alone the rest of the news media industry. We reach all New Zealanders. We have that audience of 15 and above that the social platforms have, too. There is no loss of any impact by using news media versus social media to reach people, but what you are doing is supporting an industry that’s very firmly based on a code of ethics, a commitment to truth and accuracy and balance, rather than one that is actually OK with fake information and lies being spread every day. And for us I think any of the solutions beyond this immediate crisis are going to need to go hand in hand with addressing the impact of global platforms on the news media industry.Finally, I just wanted to make that point again that, you know, everyone in New Zealand benefits from a healthy news media. You don’t have to be a reader or a viewer of a news programme and consuming that information to feel the benefit of a good—you know, the fourth estate playing an important role in a healthy democracy. And I think it’s never been more obvious that healthy news media is an essential service to a well-functioning democracy, and at this time we really are going to need assistance from the Government to get through this immediate crisis but also to help us shape up a sustainable media landscape going ahead.

Bridges Thank you very much, Sinead, a great case for the important role of the fourth estate. Just two very brief questions—first one: have you, as a result of your revenue reductions, been forced, through COVID-19, to make staffing changes, whether that’s going to four days or other measures?

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Boucher We have taken a range of measures. We have applied for the wage subsidy for all of our staff, we have redeployed staff where we can—staff whose jobs just don’t exist through this lockdown; those working on community newspapers, for example—but we have not, as yet, taken a step to make anyone redundant as a result of that. We really are trying to preserve our ability to deliver journalism at scale through this crisis in all the communities that we serve. But I would say that there are still, you know—we’ve still got a long way to go before we’re through this, and I would not rule out us taking those steps. We’ve also taken other steps to cut costs around reducing the number of pages in newspapers and all sorts of things like that as well.

Bridges And are you able to—I appreciate it’s a $64 million or probably much more valuable question, but are you able to give us a sense of what you think the pathway forward here or the solutions are for Stuff, for example?

Boucher Yeah, I think there are—the solutions for us probably apply more broadly, not just to our company. But I think there is a first period—I endorse what Gavin said at the beginning about there is this immediate need to survive these next few months, that sort of triage state, and have the kind of support that will let us continue to get through that while we all try and assess what kind of world is going to emerge out the other end and what that impact is on us.And after that, I think there needs to be, you know—I personally think that there will need to be some kind of ongoing Government support for a commercial media industry in New Zealand. You know, whether that’s a relook at the way NZ On Air can fund journalism, whether there’s other packages—one of the most obvious and, to my mind, simplest, is to redirect Government advertising spend away from global platforms into local media. That would make an enormous difference on its own to our ability to deliver local journalism.

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And I think there are other measures that we have seen, you know, come into effect overseas which I think are promising. They range everything from giving tax breaks to companies based on the number of journalists that they hire to allowing people to claim back news subscriptions in the same way they would a charitable donation, and all sorts of things in between. And there is, obviously, the question of ownership for companies that has to be addressed as well, and whether there should be some—you know, the way to consolidation in the New Zealand market should be cleared.

Bridges Thank you. [Inaudible] my last question—answered my last question, I should say. Let’s go, then, to Paul Goldsmith.

Goldsmith Thank you. Look, I was just interested in your comment that Stuff on its own almost has the same reach as Facebook in New Zealand. Can you just expand on that a bit more? That’s a, sort of, surprise—to me, anyway. So just talk me through the numbers.

Boucher Well, I think if, you know—and there are lots of public numbers available through the Nielsen metrics. But so Stuff is the largest New Zealand website of any kind here, the only ones bigger than us would be Facebook, Google. And I think the Stuff reach of New Zealanders above 15-year-olds is probably about 50 percent, and it will be much higher through this crisis—you know, there have been some days we’ve reached more than two-thirds of New Zealand adults as we’ve gone through this lockdown. And Facebook is probably about 64 percent. So—and that’s only on the Stuff website, it doesn’t include Neighbourly, which is our big, you know, local social platform that has 850,000 members on its own or our newspapers. And alongside that, we have all the other news media sites and publications already, which, I think, you know, give saturation coverage to the New Zealand public and would mean there is no need to use an international platform to get a message across to an adult New Zealander.

Bridges Melissa Lee.

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Lee Thank you, Mr Chair. Given the background that you’ve actually laid in terms of Google’s and other—Facebook’s—how do you think New Zealand media is actually coping in terms of their innovation to actually tackle this issue? Obviously, it is—you’re pretty much saying, purely, it’s the New Zealand advertising dollars that’s actually making it very difficult. The other question I had was in terms of community newspapers, how much of an impact did the restriction on the printing and delivery of community newspapers and magazines have on your organisation?

Boucher Yep. To answer the first question, I mean, obviously, your ability to fund innovation is linked to the revenue that you’ve got coming in the door. I think that the New Zealand media here—and I include ourselves in that—have been very good at adapting to what’s in front of us and to delivering products that have continued to grow audiences, grow engagement. I mean, our engagement is extremely high on news compared to most other sites—the time that people spend on-site consuming news. There are still—you know, we have lots of ambitions in that space, but they all have to be balanced with what we can afford to do. And, again, we’re up against global platforms that use global technology and apply, you know, the data of all their individual users to products that they sell out in the market.In terms of the community newspapers, I think it’s a twofold question. They’re not all the same, community newspapers. So most community newspapers are entirely funded by advertising, so even if we were allowed to distribute those during this time, I really don’t know how many of them we could publish if there is no advertising there. I would, just in response to an earlier point—there are still children delivering community newspapers, and, possibly, their parents, who usually have to get out there and help them, are the only ones breathing a sigh of relief that they’re getting a break from that during this time. But there are also some community newspapers that are, effectively, the only local newspaper in that area, and I’d be thinking of ones like the Kaikoura Star, the Whakatane Beacon, neither of whom are ours, but they are really focused on delivering local news. So, you know, on one hand we haven’t been able to deliver them; on the other hand the advertising has dried up that supports those local papers anyway.

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In terms of magazines, that’s a slightly different story for us. We have three magazines. If I had a dollar for every email I’d received about why people can’t buy TV Guide in the supermarket during this, I’d be solving all of our problems. But that’s more of a case of—we just can’t post out our subscription magazines and get that revenue for them, but hopefully we’ll be able to resume that in the next couple of weeks.

Bridges Thank you. David Seymour, briefly.Seymour Thank you, Mr Chair. Sinead, Gavin Ellis mentions the

StuffMe merger—crazy decision by the ComCom at the time, in my view. Are you still interested in pursuing it, and would you pursue it if the Government gave some dispensation for it to happen under these circumstances?

Boucher Well, I think it’s probably not for me to say that; that would be for our parent company, Nine, and, obviously, last year they did start discussions again with NZME on there. I would say that, you know, the nub of that merger was that there needed to be consolidation in the New Zealand industry to help build a sustainable future for journalism here. And while no one thought that a merger was going to be the full solution to everything, it certainly gave those, kind of, two main companies that are focused on local journalism around New Zealand more than a fighting chance of delivering that. And I still think that that holds true—that there needs to be a consolidation there to give, you know, a stronger base to keep going and delivering that kind of journalism.The other thing I would say is, you know, I think that a merger like that actually does help ensure plurality, which comes from the individual voices of journalists, opinion writers, contributors to our products, rather than the single ownership model. And we and others have seen now in this circumstance—we’ve all had to pull back on the number of voices that we can publish on those platforms because we just can’t afford as many of them, to be blunt, and so we’re already losing plurality of voice, and it’s not because we’ve gone through a merger.

Bridges Thank you. Lucky last, and then we’d better keep moving. Ruth Dyson, please.

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Dyson Thanks, Mr Chair. Thanks, Sinead, for your contribution to our thinking. It’s a really important area. I just want to ask you about, I think, what was the fundamental challenge from Gavin Ellis’ presentation, which is about the long-term future of New Zealand media, where he said that the—not exactly quoting him, but he said that the sharemarket investor model is no longer appropriate and we should be looking at a completely different model, and then he referred to the Guardian structure originally. Have you got a view on that?

Boucher I don’t know if I—I mean, I could probably broadly comment that the shareholders of major media companies are probably not the ones who’ve been doing best out of the sharemarket in the last few years—

Bridges It’s been two shareholders [Inaudible]. Boucher Ha, ha! Yeah. So I think it is time to explore all sorts of

models and, you know, that we need to have that, sort of, breathing space to be able to do that. We obviously look really carefully at other models overseas and what might be working. Our primary interest is to be able to sustain local New Zealand journalism, so I think models like The Guardian—which itself encounters lots of challenges, because the Scott Trust was reliant on classified motoring advertising to a large degree, and that’s fallen away. So it certainly is time to be able to think very differently about how journalism can be funded and delivered at scale, which is, I think, really important, so you’ve got the wherewithal to cover challenging stories; to not have that, sort of, fear of commercial pressure against your journalism or against some popular stories—being able to deliver what New Zealanders really need.

Bridges Hey, thank you very much, Sinead. We really appreciate your time and your openness with us. We’ll go to NZME and managing editor Shayne Currie. Welcome, Shayne, and we look forward to your brief opening remarks.

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Currie Good morning, everyone. Thank you, Mr Chairman, and thank you for having me today. I’m here on behalf of our CEO, Michael Boggs, and our executive and the full NZME-wide company. We’re in the unusual position of being in front of you answering questions—[Inaudible] prefer to be covering the news, not being part of it—but certainly it’s a critical time for us all, and a lot of my comments will no doubt echo what you’ve heard earlier from Gavin and from Sinead. NZME itself, we’ve been in the news in the last 24 hours, and I’ll talk a little bit about what we’ve been through in the last four weeks, but just by way of background, we have many, many news and sport brands and entertainment brands, spearheaded, of course, by the New Zealand Herald and Newstalk ZB. But equally importantly, we have five regional daily newspapers and 22 community newspapers and six entertainment radio stations. So this is a very broad mix of content—news, sport, entertainment—that’s delivered to Kiwis every day and across the country.Providing all of that content is around 570 journalists, broadcasting staff, producers, and support teams and so forth. So that’s amongst a staff overall of 1,400 people, pre-COVID, at NZME. So, you know, we are a hefty and important New Zealand employer. We’re proudly listed on the NZX—have been since 2016. We don’t have a controlling shareholder, and I was interested in Gavin’s earlier comments around the sharemarket model. We have an independent board, and, you know, we’ve operated with that board since 2016. We’re the largest New Zealand media company by revenue, and we share exactly the same challenge right now as Sinead’s touched on around these extremes that we’re experiencing. The New Zealand Herald website, when the lockdown first started, attracted 2.5 million people, and since the lockdown, for the last three weeks, we’ve been averaging more than 1.5 million unique browsers a day, and that’s massive by any standards—basically, one in three New Zealanders who are turning purely to digital, and that’s not counting the newspapers or ZB. We know on ZB through our digital channel iHeartRadio that audiences there are also up around 50 percent. So Kiwis are turning to our media products and our news mastheads more than ever, and, as Sinead said, we’ve found exactly the same—that the audiences are almost double that what we experienced a year ago with Christchurch.

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I’d like to pay tribute, actually, to not just the NZME journos but to the media industry generally for the work that’s going on in all of our media companies and all of our newsrooms—you know, we’re spread far and wide at the moment, obviously, through the necessary moves that we’ve had to make. But I think that the New Zealand media can stand proud right now, with all of these challenges that we’re confronted with, including their jobs, that they’re providing such incredible content, analysis, commentary, and news angles. And I think, without that, you know, I think it’s important—as The Washington Post in its masthead likes to say, “Democracy Dies in Darkness”. And we’ve seen in the recent weeks around the media challenging things like the number of COVID tests, border quarantining, our approach to the lockdown—these are vitally important questions that the media are there to stand for, to ask, and question the likes of our politicians, our experts, our scientists, and so forth. And I think that the New Zealand media have done a proud job, especially considering the impacts that we’re seeing at the moment.Yesterday, you no doubt have seen our announcement to the NZX, and we, similarly to Stuff, have seen a 50 percent drop in our overall advertising revenue in April. That is a massive number by any account. We have made moves quickly to try and combat a lot of that, but the impacts have been significant and swift for us. We have, unfortunately—and I’ve been involved myself, but all of our leadership team are involved as well, around having to pull the company through some pretty quick manoeuvres to get ourselves on a firm footing so that we can get through this and that we come out the other side as strongly as possible. But that covers the range of roles that are affected at NZME right through to requesting our staff to take a 15 percent pay cut through to taking annual leave, and, importantly, I think—most importantly, in a way—the impact on our journalism and products around the—you’ve seen, unfortunately, our sports section turned to one page now in the New Zealand Herald each day; our magazines are substantially down in size; and, of course, our community papers, our 22 newspapers, have not been able to publish.

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And, again, similar to what Sinead said, we do rely on heavily on the advertising model for our community newspapers, and so, you know, once the restrictions are fully lifted, we still have to review whether or not we can actually continue to publish all of those community newspapers. That’s how serious the situation is right now.Two weeks ago, we, unfortunately, had to make the call to finish Radio Sport, to take that station off air. Up until COVID-19 hit us, we were very much invested in Radio Sport. There were challenges, absolutely, facing our business and across the business, but, for instance, Radio Sport did have the rights to the America’s Cup next year. We were in serious negotiations for the Olympics later this year. And so I’d just like to make that clear—that it was COVID and the serious impacts that pushed us into that position very quickly.Just a little about our advertising revenues—as I mentioned, 50 percent down in April. I think what’s really important is to note that 70 percent of our advertising revenue generally comes from small to medium businesses through what we call direct revenue. The other 30 percent is through major New Zealand businesses’ brands through advertising agencies. And so, of course, we’re seeing impacts on both sides from COVID. Most notably, of course, small and medium businesses are simply not operating at the moment and don’t have the need to advertise nor the cash to advertise, and so that’s hit us particularly strongly.

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I’d like to touch on just some of the points that were made a little earlier around some of the solutions. And I know in our business we’ve been in close contact with the Minister and officials in the last several weeks, and we have been raising ideas and solutions, and one of those that have already come up today is the Stuff-NZME merger, or the NZME ownership of Stuff. And we’ve been very clear publicly that we believe that we would be the best owners for Stuff. We believe that that would lead to a very sustainable, ongoing business that would continue to hire a good, strong percentage of journalists throughout New Zealand. Both businesses have reporters, journalists, producers, broadcasters throughout the country geographically, and so that is vital to maintain that democracy not just in the metropolitan centres but at town halls across all the provinces in New Zealand. And I can answer any other questions on that if any of the committee members so wish.We’ve also, unfortunately, had to, in recent weeks, stop hiring some columnists and contributors, and that in itself is a huge pressure on us from a plurality point of view. And so that’s not driven by, as Sinead mentioned, the merger or a combination of the two businesses, but simply the pure financial stress that we’re finding ourselves under at the moment.Those are probably the key points that I want to make at the moment. We too have also signed up to the wage subsidy scheme. I mean, that is a help and assistance, but it’s not a panacea; neither, unfortunately—and while it’s going extremely well at the moment—is the paywall, and I know there might be some questions around the NZ Herald paywall. We’re certainly seeing strong numbers. The last publicly released number that we put out there was 21,000 digital subscribers alone, plus another almost 30,000 New Zealand Herald print subscribers who have signed up. So that’s a strong number in the first year, and we have seen an increase in recent weeks, especially as we’ve gone into lockdown, but that is only a very small percentage of the revenue that NZME receives each year. We are very much reliant on the advertising model that I talked about earlier.

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Bridges Hey, thanks very much [Inaudible]. Just on the paywall—that was going to be my first question. You’ve said it’s not a panacea; I’m sure you’re right. What do you see the future of paywalls as, though? I mean, Stuff, obviously, doesn’t; you do. How helpful will that be for the future of quality journalism?

Currie Yeah, it will be vital. And, you know, we were proud to be the first major business in New Zealand to move to that subscription model—recognising that the NBR and others have been doing it for many years as well in the niche areas. But it was a stake in the ground for us, Mr Chairman, and it was a start. But, you know, you look at the likes of The Australian, and it’s taken years and years, a decade—more than a decade—to get to anywhere near the percentages of revenue which is helping their bottom line and their revenue and their ability to hire journalists. So the advertising model remains vital to us, and will for well into the future.

Bridges And look, just one other one that I suppose I hadn’t thought about, but it’s, you know, obvious when you do sit there and think about your revenues: social media multinationals. Obviously, that’s a bit of a theme this morning. What do you, sort of, say about them? And, I suppose, let me give—my not particularly well-thought-out view of it is, look, it’s a bit hard to turn back the tide on that one. But what do you say?

Currie Well, I like the moves that have just been announced in France, and France is the first major country to move in this direction. I think Australia will follow very quickly. But last week it was announced that France has ordered that Google—and they’re targeting Google in the first instance—that they now need to start negotiating with media companies to pay them for the content that appears in their search engine. And I think that that is a really significant move. The ACCC in Australia are certainly making similar recommendations along those lines, and they’re moving ahead this year, and I think, you know, it can’t come soon enough in New Zealand.

Bennett Could I just ask a supplementary to that. How would they be enforcing it? Sorry, Paula Bennett here, Shayne. How would they enforce something like that?

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Currie Yeah, it’s only just been announced in France, and the news that I’ve read on it doesn’t actually go into all of that detail. But certainly, in the Australian instance, the ACCC certainly saw itself as the regulatory, I guess, enforcer or body to make sure that the Googles and the Facebooks were paying a fair share to their contribution. But we rely on Google and Facebook, there’s no doubt about that, to distribute our news and our journalism, and that’s important, but, you know, that’s also a double-edged sword for us; we recognise that. They have taken a large, large, large chunk of our advertising revenue, and that’s really impacting on our ability to ensure that our newsrooms are still humming.

Bennett And I suppose it goes back to—sorry, Mr Chairman—you know, it goes back to what Sinead was saying as well, in that in this age of, sort of, fake news taking news from yourselves and Stuff and places like that, you know, it has that degree of credibility behind it. And so they’re using that, as such, to sort of drive their own. And yeah, it’s an interesting concept and one to watch.

Bridges Thank you. We’ll go to Paul Goldsmith. Goldsmith Thank you, Mr Speaker. Look, I was just interested in the

figures in terms of—as an example of a normal-sized business or a large business. You’ve gone for the wage subsidy. Roughly, in terms of the percentage of revenue, how substantial has that been, you know, compared with the advertising, in terms of enabling you to stay afloat? Are there any, sort of, figures around it?

Currie Yeah, I haven’t seen the full figures. Our legal team’s been working with MBIE and the Ministry of Social Development. But certainly, my understanding is it’s a very small percentage. If you look at the NZX announcement that we made yesterday, that’s talking about 50 percent revenue loss down year-on-year in April. You know, we’re talking millions—millions and millions.

Goldsmith We’ve got a scheme that, you know, it’s cost $9 billion across the country, and I’m just sort of trying to get a sense of—so in terms of your business, it’s made an impact only at the margin. Is that right?

Currie That’s right. I think, you know, for us, we—and we’re looking forward to what the Government has to announce in the coming days, and we’re working really closely with them, but yeah, the wage subsidy is probably a very small part of that.

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Bridges Because isn’t the blunt problem, or the short problem, that whilst it covers some of your wages, you have a multitude of fixed costs that it does nothing about?

Currie That’s right. And I think—but also on the revenue side, you know, around that loss of advertising, is the key.

Bridges Thank you. Let’s go to Melissa Lee, then Michael Wood, and then we’ll call [Inaudible].

Lee First of all, Shayne, my thoughts are with your staff who have actually heard the news that they’re going to be made redundant. It can’t have been a very easy decision for you, as well. Two very quick questions; ultimately, there might only be one answer. What are the biggest revenue impact streams currently on your business, and how could the Government actually mitigate that impact? And, secondly, the other question is in terms of the Government’s business case to try and merge what currently is TVNZ and RNZ to disestablish, potentially, and actually create a new entity, do you think there is a solution in terms of, you know, the plurality of voice that the Government may be reducing by their decision to do that, and do you think NZME and Stuff should be allowed to merge to counter that?

Currie I’ll do the last one first. I do think we should be allowed to merge, and we’ve been very clear on that for probably the last four years. And I think that will sustain us well into the future and keep that plurality existent well into the future. Where I think the Government can definitely help—and this has been alluded to earlier—is around the public sector spending on advertising. Too much money is going to the Facebooks and Googles when the New Zealand media have equal, if not more, share of audiences to be able to get into just about every region in New Zealand, and that’s millions and millions of dollars, and that would make a huge instant impact for us.And I do think, you know—we’ve spoken to the PwC group that’s looking currently at the proposals around RNZ and TVNZ, and it’s equally important to have a very strong public service media organisation, but at the same time ensuring that commercial media are also equally strong. And so, you know, we’ve made submissions to that committee. We believe that there, you know, is a sustainable model there that also potentially frees up advertising revenue currently taken by the State-owned enterprise that commercial media can have a fair share of.

Lee Just on the merger, Mr Chair.

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Bridges Very briefly.Lee Just on the merger, how would you guarantee plurality of

voice when you, effectively, become one company and, potentially, one editorial voice?

Currie The same as we right now. So there are dozens and dozens and dozens of voices in The New Zealand Herald alone, and it’s not just one editor who makes that call. It’s—you know, we have editors and leaders across all of our sections and departments. And then you take the Newstalk ZB, and then you take our five regional dailies and our 22 communities. Just because there’s another business that could merge with another doesn’t mean that all of a sudden—I mean, the New Zealand market is too small. It’s not like Britain, where you have a Guardian and a Sun competing head to head. We’re a country of only—well, not even 5 million people. That plurality of voice is important from a business model alone, let alone our need to ensure that we’re presenting all sides of an argument. We don’t want to be another Facebook or Twitter, where all you’re seeing is arguments and views of your friends or your mates and you’re not hearing a diverse range of views and comments.

Bridges Very good. Michael Wood. Wood Thank you, Mr Chair. Shayne, thank you for your

contribution to today’s meeting. I’m just imagining a scenario in which there is additional Government support through this period to help companies like yours get through; in which—let’s say the merger goes through, over the objections and concerns some of us may have, but let’s say that happens. We still end up back in a situation in which there are major technologically driven structural issues in this sector, in which companies are still going to find it very hard to make ends meet, and the evidence for that is international, because it’s not just New Zealand companies who are struggling at the moment. That’s not about bad business decisions, it’s not about the quality of your output, which is excellent; it’s about major international structural issues in the sector. It seems to me that just imagining that we can squeeze more efficiencies out to keep things going is not necessarily where we need to be. We need to be thinking more creatively about how the sector can reform itself, as Gavin Ellis talked to us about before. Have you got any comments you would like to make to the committee about that?

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Currie Yes. I agree with that. I do think, though, that giving us extra runway is vital, and I do think, you know, already many of our minds in the media world will be focusing on what the future shape of our businesses look like, regardless of Government intervention or assistance and so forth.And I myself have already turned my mind to thinking future models for sport, for instance. You know, unfortunately, those huge impacts that we’ve seen in the sporting world—both the cancellation of events and therefore we’ve, unfortunately, had to cancel Radio Sport. We know that sport one day will bounce back. The question is when, and then how best is NZME or any of the other media businesses in New Zealand best able to make the most of that.And so that—you know, already, unfortunately, our minds right now are in the here and now, in the immediate crisis and what we’re confronted with. Very soon and already we need to be looking much further afield and, you know, drawing back the audiences, who are currently all reading about COVID-19 and the impacts and so forth, but we know that when sport returns, our audiences will return.

Bridges Do you think there is—just on Michael’s question—a difference in principle between a private sector merger, so NZ Stuff and NZME, and a public-private sector merger, or public-public merger, for that matter—RNZ-TVNZ, TVNZ-Stuff. Do you see—I mean, frankly, I’m more concerned about public sector mergers than I am about private sector ones, but I wondered if you had a view.

Currie No. I think—look, I absolutely understand the point of why RNZ and TVNZ should merge as a BBC-style public broadcaster. I think that would be a huge strength for New Zealand. But, at the same time, I personally believe that NZME would be the right owner of Stuff given the current assets that both businesses have and in terms of the expertise, I guess, within those businesses around not just newspapers but, obviously, digital. NZME’s got the radio arm. So I do believe that having a healthy, you know—consolidated mergers on both sides is absolutely fine and strong for the future of journalism in this country.

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Bridges Hey, Shayne—thanks so much for your time. Really appreciate it. We’re going to move now to Television New Zealand and its chief executive Kevin Kenrick. Kevin, we appreciate you being with us and look forward to your opening remarks.

Kenrick Thank you, Chair. Our story is very similar and it echoes what you’ve already heard. I think it’s true for all media in New Zealand and also internationally that everyone is seeing unprecedented audience scale, and at the same time they’re seeing massive reduction in advertising revenue, and TVNZ is no different to anybody else in that respect.We are also seeing in the TV world a reduction in supply of content. So most of the productions, both locally and internationally, are halted because of lockdown provisions, and people are having to resort to whatever content is available historically that they’ve got, or things that are in a post-production phase, which can be completed. But what we are seeing is an emerging gap, and the longer that productions are halted, the bigger that gap and the longer that period of time is going to show up with a gap in supply.The other thing, from a TVNZ perspective—in recent time we have been more active in content that you’d probably see as more traditional public media content. So the daily briefings, in terms of PM and Director-General of Health, is something that we’ve covered and made available to other media; the Les Mills twice-daily activity programmes; and launched today, in terms of the Home Learning channel—are all things which we’ve been able to contribute to which are probably more reflective of what you would see from a public media environment.I guess the other thing which I was keen to provide some context around is we need to understand that pre-COVID, the status quo was not sustainable for local media. And so what we shouldn’t expect is that any responses to COVID shouldn’t try and defy gravity; it should address what a forward-looking view is, because COVID has just accelerated and exposed some of the gaps and the weaknesses in the sector.

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You know, one of the fundamental things I think we need to challenge—both as a society, as a regulator, and as an industry—is the value that we place on plurality versus the value that we place on sustainability. So trying to maintain a group of subscale media businesses is only likely to hasten their demise in terms of sustainability, and some form of consolidation of the entities doesn’t mean to say that that’s the end of plurality. We need to focus on plurality of voices rather than plurality of entities, and I think that was the point Shayne made quite clearly just before me. So when I look at the potential areas of support that may benefit the industry, the first one, I think, is helping the industry to help itself, which is encouraging and embracing consolidation of existing traditional media. And I think, as has been mentioned earlier, what that would do is it would drive cost efficiencies that would extend the runway of these organisations, and the runway is important because it buys the time to build these future digital businesses. The businesses that are, basically, invested in right now are going to take many years to come to fruition, and extending the runway would enable these entities to fund them and get them to a scale that they become viable businesses as a replacement from today.This notion of consolidation is already happening around the world. If Disney needs to merge with Fox to have enough scale, if Comcast buys Sky UK, if Nine is buying Fairfax in Australia, what makes us think a market the size of New Zealand, with less than 5 million people, can sustain all these separate independent media entities? So the second area that I would focus on is re-appropriating Government-existing expenditure and resources. So others have touched on it; I would just reinforce every dollar that the Government spends on advertising with Google and Facebook is a dollar that’s not spent supporting local media. Buy New Zealand, would be my insistance.Transmission costs: the more value that is captured by Kordia, the less likely Kordia’s customers are to survive, and the more money the Government will, ultimately, spend on unemployment benefits. So it’s just a question of where you want to count the cash.

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And then the NZ On Air licence fees—the money from NZ On Air goes to the producer of the content. The broadcasters pay a licence fee. Right now, we’ve got situations where the licence fee for TVNZ, for local content, is four times the price that we can buy alternative international content for. We want to focus on local—that is our sustainable point of difference against international competitors—but we are commercially disadvantaged for doing so given the structure of that right now.And then the third area that I would encourage the Crown to look at is the public media initiative. Public media is not the problem; commercial media is. Public media has still got the same income it had before. It is pretty much unscathed and can just box on doing what it’s doing. It’s the commercially funded media that has the problem—that’s where the focus needs to go. So I would encourage the Crown to broaden the focus beyond public media to focus on local media, and if there’s going to be funding, spend less time thinking about whether it’s a public or a commercially funded entity and focus on the content. Ultimately, that’s what consumers are actually taking out of this, so fund local content, both news journalism and entertainment, irrespective of whether it’s public or commercial.So those would be my inputs for consideration in terms of potential solutions. Happy to answer any questions you might have.

Bridges Yeah, some great points, Kevin. I mean, just on that very final point, which is so important, doesn’t that lead us to an answer which is: OK, we can think about mergers and the like, but in reality the answer is beefing up that public-good content funding, irrespective of the media outlet. Is that what you’re saying, or are you saying something subtly different to that?

Kenrick Yeah, I think if you’re looking for efficiencies, there are more efficiencies from combining like media together because of the duplicated costs than there are about merging entities just because of their ownership structure. And so I’d encourage us to focus on what is going to bring the most value, that would get the biggest bang for either the taxpayer or the commercial funding that would sustain the industry, and then free up whatever finite resource that’s available and pump that into local content.

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Bridges Right. Let’s be a bit cheeky here, Kevin, but you sort of asked for it with your comments. Would a TVNZ-RNZ merger work?

Kenrick I think anything can work if you choose to make it work. The question is: is that the most efficient use of finite resources right now?

Bridges OK, I’ll let you off that one. Let’s go to David Seymour.Seymour Ah, yes, thank you, Kevin. I just wanted to ask about your

decision not to pay a dividend. Duncan Greive in a recent column quoted out that that was fairly easily accepted by the Minister, who, of course, is a former TVNZ employee. I don’t know if Duncan’s being unfair there, but it does raise a question of what sort of ethical decision-making went on within TVNZ when you decided to compete aggressively whilst not paying a dividend versus pay a dividend, a rate of return that your competitor is required to pay, or something equivalent, and restrain your competition within those bounds, because it seems to me that you’ve been able to really dominate your competitor, aided by the fact that you haven’t had to pay a dividend. That, some might say, was an unfair advantage, and I wonder about how that decision making went on within TVNZ.

Kenrick I suspect the decision making in TVNZ was very similar to the decision that NZME made when they chose not to pay a dividend, that Sky did when they chose not to pay a dividend. You should ask MediaWorks when they come on the call whether they’ve actually paid a dividend to their shareholder. I also note that Netflix is not paying one either, and they’re probably our biggest competitor right now, so on that basis, I think you’re either choosing to invest in your business or you’re not; we chose to invest, and I think there are plenty of other examples of that both locally and internationally.

Seymour Good answer. Thank you.Bridges I mean, I’m sort of pushing my luck here, Kevin, but,

again, you sort of asked for it. If Netflix is your major competitor, why the hell are we funding you? Why don’t we just—

Kenrick I don’t believe that you are, Simon.Bridges Sure, but OK.Kenrick Are you saying that you are funding me?

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Bridges Well, we’re not, you’re right. At the moment, technically we’re not. I suppose it comes back to what you’ve said about content and the need for public-good content, and, ultimately, if you’re a public broadcaster, that’s what we want, not Netflix, isn’t it?

Kenrick I think the thing that is at risk is local content. You know, right now we’ve got great examples of the benefit of local news coverage. I would also argue that local entertainment content is also very important. I think the longer that we spend in lockdown, the more that we need a bit of light relief, and, you know, I mean, I’d like to think that the generations that follow are going to hear that with a Kiwi accent rather than a foreign one, and I think that it also supports the broader creative ecosystem of the talent, of the producers—all the behind the scenes people—which all contribute to the economy.

Bridges Thank you. Kiri Allan.Allan Kevin, good morning, and, look, can I just reiterate the

comments that some of my colleagues who have just acknowledged the work that your team and all of the folk in the media are doing right now to ensure that the populace is getting very well informed, critical commentary at this time.

Kenrick Thank you.Allan There will be a multiple of—there is so much on your

shoulders when you’re considering where to in a landscape as we start to rebuild from here. But something that’s coming through loud and strongly through a lot of my channels is—I think something you said before was that the industry needs to be helped to help itself. If the Government looks to helping the industry to help itself, a question that keeps coming through my channels is, well, what assurances can media organisations provide to us all, I guess, that there will be an equity lens put across to ensure that there is a diversity of voices that continues to come through to us as consumers of your products, because you will be balancing so many various considerations, as we know, that the environment that we’re in must change. So I guess that’s what a lot of folk have been getting in touch with me about. So what will be the equity lenses applied? How will we continue to ensure a diversity of voices is maintained through all the various media channels as we move forward?

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Kenrick Look, really good question, and I actually think that New Zealand could learn from other markets. One of the first things that I think we could look at is having a quota for local content, which is not uncommon around the world. I mean, our neighbours in Australia have one, and, in fact, the ironic thing is in Australia, New Zealand content contributes towards their local quota, and yet we don’t have that in the New Zealand market place.But I think going beyond that, we need to look at the diversity of that local content so it’s not just one-dimensional, as you point out, and a big part of that comes down to—if you look at NZ On Air and how it allocates its funding, that it can partition funding around particular areas that it wishes to see exhibited. A good example—I mean, so we’ve, obviously, got TMP and others there as well, but I think a good example would be a show like Casketeers, which I think has done a lot for Te Reo and it’s also done a lot for entertainment, and I think it’s something which is an example of things that we’d like to see a whole lot more of.

Bridges Hey, thanks very much. And to Michael Woodhouse.WoodhouseOh, thank you, Chair. Kevin, you, Sinead, and Gavin all

raised the possibility of the redirection of at least Government revenue—advertising spend, rather—and in Sinead’s case, private as well. And Sinead mentioned—I want to drill into this—almost a fallacy that Facebook and Google was a better platform or channel through which to spend this money. And I want to try and understand what the media industry are saying about this. Are they saying that people who are making decisions about where to spend their discretionary advertising dollar are misguided and could get just as much reach to their customers on local platforms as they do on Facebook and Google, or are they saying, “Well, despite that, they should be patriotic, if you like, and spend more locally.”? Is this a commercial decision or an altruistic decision that you’re calling for?

Kenrick I think right now we’re calling for both, but I do think that the examples that you’ve heard from both Sinead, from Shayne—I’m sure Michael would reinforce the same thing from MediaWorks—is local audiences, or audiences for local media, have never been greater than what they are right now. I know, from a New Zealand point of view, that we will reach 2 million New Zealanders per day, and so I am pretty confident, if you look across all local media, that an advertiser can reach all New Zealanders really effectively, and—

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WoodhouseJust to interrupt there, then, is that not a failure of the local media to demonstrate the value proposition, because, as I say, advertising spend is a discretionary spend. These guys—and Government, frankly, from a public service perspective—will want to know that they’re getting the biggest bang for buck. And I still come back to my question: are you saying, then, that these people are actually getting it wrong, or are they just simply following the pathway that will get them the most return on that advertising investment?

Kenrick I mean, I can only speak from a TVNZ point of view, but if I look at the cost per thousand reached for audience, the number of people who actually watch the ads versus skip through them, I can give you better value for money with TVNZ OnDemand than what you can buy on YouTube. That’s, you know—and if you take Google and Facebook, those are the big players in the market. So I think that case by case, you’ve got to look at what is the brief, who are you trying to reach, what are the campaign objectives, but, on top of all of that right now, in the situation where you’ve got an industry that’s on its knees, where you’ve got a Government that’s spending billions of dollars to bail out businesses, the first thing I’d stop doing is scoring own goals. So spend the money to support the businesses that pay the taxes, that employ the New Zealanders.

Bridges Hey, well thank you very much, Kevin. I think your thoughts on plurality versus sustainability and also what you said about content are key issues, or certainly some of the very key issues, that we need to think about and I am sure the Government is thinking about. So we really appreciate your time, and I wish you well during the rest of the lockdown. Thanks very much.Let’s now move to MediaWorks and chief executive Michael Anderson. Michael, thanks very much for coming on, and we just really look forward to your opening remarks.

Anderson OK. Thank you, Chair, and to the committee. I think the beauty about coming this far into the circumstance is that a lot of my colleagues have actually said some of the things that I would have said, so I want to probably just pull out some key points.

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I think the fact that we are in an existential crisis for the industry and for MediaWorks has been well covered, and I think the connection to why that is a crisis for New Zealand overall I think has also started to be established in the role of the media in a vibrant and effective democracy.But I think there’s also a key point that, particularly on our radio and TV areas—and Kevin mentioned this as well—the entertainment side of what we do is enabling a reflection of what is uniquely New Zealand in terms of its cultural identity. And whether that be in drama or whether it be in comedy, sport, music, the commercial media’s capacity to not only provide a platform for those but to co-invest into those categories, to support the businesses that are all intertwined into that ecosphere that actually support those industries, that is enormous. When you think about the commercial media—and media in general, but certainly the commercial media—they sit, really, at the centre of that ecosphere, which is what makes New Zealand uniquely New Zealand. And without the media, I think—not just news, but that’s also a critical issue.I think additionally—and we’ve touched on this a little bit too, about businesses in New Zealand. We’ve got a radio group that is embedded in the communities right throughout New Zealand, as well as our TV platform, which people are very familiar with. When you look at our radio group, the majority of the businesses that we support are small to medium businesses right throughout New Zealand, and so they need not only a vibrant media platform—advertising platform—they also need choice so that they can grow their business and they can protect their businesses as well.And if you look at what’s happening with COVID right now, you get a good indication of what is really, sort of—how that’s exemplified. If you look at the massive audience increases that we’ve all been talking about on all of our platforms, that really is—it’s right across the board for us. It’s not just news and current affairs; it is also all of our entertainment. It’s our online as well as radio, as well as TV. So everybody else has talked about that a lot, but that is, again, the indicator of the role of the main media here.

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But if you also look at the issue we’re facing, which is, essentially, this cliff we’ve fallen off in terms of advertising, that’s simply because—to state the obvious—businesses aren’t advertising. They’ve stopped trading. The reverse remains true, which is when they need to start trading, when they can start trading and they need to start growing, they need those advertising vehicles to be able to reach their consumer. So, you know, we play a part not just in culture, not just in news, but also for those advertisers, and a lot of those small to medium businesses, if they can come back, are going to absolutely need that plurality of voice that we’re talking about in the advertising sector as well.I think, additionally, when it comes to MediaWorks, yeah, we’ve suffered the same declines of revenue; we’ve enjoyed the same growth in audiences as everybody else has been talking about. We’ve lost some of our local shows that Kevin alluded to, just because we simply—they’re not being able to be in production during this period. And we’ve also asked our people, and they’ve volunteered, to take a significant pay cut across the board. That’s, I think, not just reflective of their understanding of the seriousness of the issue but I think it’s also because of the passion that they have for what we do and the place that we have in New Zealand society as well.There’s a little bit of talk there. I think I wanted to just, before I sort of close, a little bit of talk about plurality versus sustainability. For me, there shouldn’t be a hierarchy here. The only way you can maintain plurality is to have sustainability, and so I don’t think it’s a shifting of hierarchy; I think it’s working with both to make sure—and that’s what everybody’s been talking about, which is how do you envisage a total industry? And I do believe that the first part here is the triage we’ve been talking about. It is how do we make sure that the businesses, the media businesses, survive this current situation to enable the time to be able to work on what is the vision for media overall for New Zealand, whether that be public or whether it be commercial?

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And I still feel that some of the ideas, whether it be allowing consolidation to occur immediately, whether it is a—has a potentially powerful impact, and not saying that it shouldn’t be part of the solutions, but it has a powerful impact, and our belief would be that we shouldn’t be looking to do this in the middle of the crisis; we should be buying ourselves time to work through it in an appropriate manner. And if we just start pulling out individual opportunities—you know, we’ve got a Government broadcaster which is dipping into what is a finite pool of advertising, and so that’s a potential solution. But the whole idea here is not to get into these big solutions now, but to buy time.So our view is that we need—the industry needs—support now, for all the reasons that people have articulated very, very well. And I think the key point that was made at the opening address I think is really critical, which is that opportunity for all of the media to sit down and work with Government and work with all the appropriate parties to envisage what it needs to be like, what media needs to be like in 2021 and beyond, is critical, because—to the points that have been made—it can’t come back looking like it is because it was already stretched. But we need an opportunity and well-considered discussion to be able to make those changes.

Bridges Thank you very much, Michael. I suppose, just in relation to that point that Kevin raised of plurality and sustainability, by which, I suppose, we really mean consolidation, I take his point, and the one, I think, Shayne makes, which is you can get that plurality within a broadcaster with different perspectives and so on, and that’s for sure. But I suppose, you know, I also want to explore with you the extent to which it’s, ultimately, a perfect truth, because, I mean, Michael, I don’t think we’re giving away any surprises when we say, you know, you have been on the market as a business, and, I suppose, bluntly, if you are not there, if MediaWorks were not there, can we really say we’ve got an effective plurality on our television sets, or is it the case that, actually, we’ve been irreparably harmed because we’re simply down to not just one State broadcaster, I suppose, but State broadcasters on our TV screens—fundamentally; I know there’s one or two exceptions, but fundamentally?

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Anderson Yeah, look, I think the point that we are the largest of the independent media is a critical one here. You know, we have a TV business that’s currently up for sale. That is about trying to find a sustainable model for TV. And so, as we’ve been working through these things—and everything that MediaWorks has been doing over the last number of years has been about creating sustainability moving forward, so whether we’re for sale or parts of our business are for sale, it is still about keeping MediaWorks as a vibrant part of that ecosphere. And so I think, when it comes to plurality, to me, it’s an incredibly complex issue, and I sometimes feel like it’s being simplified in a rush. It’s not just about yes, you can have plurality of voices within a single organisation; it’s how do you codify that, how do you protect, and how do you ensure that from a position, no matter what ownership structures apply down the track, that that can be embedded in as a protection for not just society but for competitors as well?So these are fairly complex issues which can’t be just, sort of, solved within two to three or four weeks with the decision made to consolidate. And it’s those areas that I think we need to explore, but very open to the fact that consolidation most likely is part of the solution, but very considered.

Bridges I mean, I suppose what I’m asking, and I appreciate your point that it’s, of course, complex, but is a world of State broadcasting alone—does that provide adequate plurality?

Anderson Look, our belief would be no, and for all the obvious reasons that we’ve been talking about—the need and the role that media play. I think that the role of public broadcasting is very, very strong and is appropriate in any democracy, but when we’re talking here, I think we now—to try and pull the levers of how do you create strong or how do you create strong public or how you create sustainable commercial, I think it’s now “How do we create a total media environment?” is the only way to do it. If we keep trying to pull individual levers within this, we will end up creating some unintended consequences which could be quite pronounced and severe for New Zealand. So, no, we don’t believe that that would be an appropriate outcome.

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Bridges My colleagues have got a lot of questions. Let me ask you one more while I’m on this. Would the sort of thing Kevin was talking about—or, actually, I’m talking about but he alluded to—which is a much beefed-up NZ On Air or public content funder, would that make MediaWorks more sustainable?

Anderson Look, quite possibly and most likely, but I still come back to this point which says we need to be—you know, we’ve got different roles to play. We’ve got the news and the vital role that plays, we’ve got the entertainment and the cultural aspect that we play, and then the contribution to the business community within New Zealand. So I guess I keep coming back to the point which is let’s sit down and do this, not try and make policy on the run. But a public service or public media that is funded, fully funded, and not driven by the needs of advertising would certainly make the ecosphere for the rest of the commercial operators much healthier.

Bridges Thank you. Melissa Lee.Lee Thank you, Mr Chair. Two questions, thank you. Michael,

in relation to the advertising revenue dropping—and previous speakers have actually said if Government advertising revenue was actually spent on local media, it would actually help tremendously. Can you comment on that, on the first question? The other is: Kevin talked about the issues in terms of transmission costs for broadcasters and also local content actually having four times higher licence fee. I know you talked about, you know, you don’t want immediate solutions because you could actually get it wrong. There are, in fact, immediate fixes as well as long-term goals—that you actually want to have a better ecosystem for the media organisations—but immediately, do you think there needs to be something done in terms of the fees that you pay, to reduce the costs for the local content producers?

Anderson Yeah, look, I think that they were great points, and we’ve already had some initial discussions with NZ On Air about just highlighting that those licence fees have always been difficult but particularly difficult—and I think Kevin made that point—at this point in time, and it makes it almost prohibitive to be able to, sort of, work through those. And transmission costs, again, are obvious to us, which is—at this point in time, if we could be relieved of those transmission costs, that’s a phenomenal help as we work through. So they are two very quick solutions there.

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And when it comes to Government advertising, you know, we benefit from Government advertising. I think the points that have been made, I think they were valid, which is, at this point in time, if there is a choice—if you can’t reach your audience at all except by using a global platform, then use it, but when you have a choice between local and that global, it should absolutely go to local, and that would be a significant benefit as well.

Bridges Thank you very much. Seymour Yes, well, thank you, Michael, and I particularly want to

compliment you for the coverage that Newshub at 6 has done through this crisis. People like Michael Morrah I think have been doing a fantastic job. I want to return to this issue around dividends. Kevin Kenrick said I should ask you if you are paying a dividend, and he seemed to make the argument that, actually, no one in this business pays a dividend so why should they. I suspect the answer is that he’d be a little bit less cavalier if his TV business was up for sale by its private owner, but nevertheless I thought you should have an opportunity to respond to that.

Anderson Yeah, well, I think to pay dividends you’ve got to have dividends to be able to distribute. What we do have, though, is we have debt, and my understanding is the Government broadcaster doesn’t have debt. And so we do have to pay that. We don’t get relief from that debt on a monthly basis to be able to suspend repayment of that debt, and so in an absence of being able to pay our shareholders a dividend, we don’t have any relief on a significant level of debt that has to be repaid each month.

Seymour Thank you.Bridges Thank you very much. Ruth Dyson.

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Dyson Thanks very much, Mr Chairman. Michael, thanks for your contribution to our thinking on this really important issue. I get the point you made about we shouldn’t be making really critical structural decisions when there’s so much pressure in the industry, so I get the point about us needing short-, medium-, and long-term thinking in this space. But it’s also occurred to me that there doesn’t seem to have been a trigger or a driver of that sort of big thinking previously. So I just want to, I suppose, reassure myself, or reassure the committee, that when the short- and medium-term solutions are found—and it feels to me like there’s been a lot of collaboration between the industry and central government on finding those solutions—there will still be a driver for all the players to get together and say, “How do we make the plurality issues paramount, and how do we ensure we have a sustainable industry?” Will there be that driver?

Anderson I think there will, because there’s the commercial imperatives of what we faced and have been facing for a number of years and sitting here now, but that shouldn’t take away from an understanding that we are passionate about what we do—and I think I speak for everybody who’s spoken today and is probably yet to come. We are passionate about what we do, we’re passionate about what we’re able to contribute to New Zealand, and we’re passionate about creating long-term sustainable businesses. We’ve got 1,200 staff that we deeply care about and deeply are trying to make sure that we can hang on to. There are thousands of businesses that are connected with us that if we weren’t here would perhaps go under or struggle. We care deeply, and so this is a crisis, but it’s not just a cry for help and then a forget. This is the trigger to make sure that what we achieve is long-lasting. So I have no doubt, certainly from our perspective—and I think I’d be quite comfortable, knowing the others, to say the same.

Dyson Thank you.Bridges Thank you very much. Finally, Paul Goldsmith.

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Goldsmith Thank you, and I appreciate the enormous pressure that your business and many businesses are under at the moment. I mean, there’s lots of, sort of, structural issues around the industry, but I was just interested in your view as a person trying to stay afloat in business what your attitude is towards the lockdown—would you be keen to see us out as soon as safely possible, presumably? And where do you see it all evolving next week—what are you hoping to see and what are you hoping to be able to do?

Anderson There’s a couple of things, which is, yeah, we’ve had a number of people—just a few, but we’ve had a number of people pick up COVID within our organisation, and we’re very mindful of the safety and very supportive of the level 4 lockdown. One of the things that we need, probably, is certainty. What we’ve looked into—when people have talked about us coming off the cliff in advertising, it’s a cliff that we can’t see the bottom of; it’s dark. And what we need is some certainty. So whether the certainty is here’s the steps to, here’s the path ahead, the first thing we need is that level of certainty to understand what is coming next and so that we can start to build some plans and structure around that. I think the second thing is yes, we want to be able to move back into a position where our lifeblood, the businesses that we work with, are able actually to come back from this. So as soon as safely possible, we’d love to see them being able to start trading again. They’re probably the two critical, sort of, points for us.

Bridges Well, Michael, thank you very much. We really appreciate your time and, you know, with that, as you say, small number of instances of COVID-19 amongst your staff [Inaudible]. We thank you for what you’re doing at MediaWorks. Thanks so much.

Anderson Thank you.Bridges We’ll go now to Radio New Zealand, and Chief Executive

Paul Thompson. Paul, welcome. It’s great to have you on Zoom with us, and we really look forward to your opening remarks on RNZ and the media landscape.

Thompson Kia ora koutou everyone. You can all hear me?Bridges Great.

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Thompson Great to be here today. Thank you for an opportunity to talk to the committee. Firstly, I would like to acknowledge the outstanding work of journalists across New Zealand from all outlets during this crisis. I think it’s a powerful example of the role that a vibrant fourth estate can play in terms of keeping our cohesive democracy operating in times of stress.RNZ is doing our bit. As Aotearoa’s public service broadcaster we’re intensely focused on doing our job, providing trusted information to all New Zealanders through our radio stations, through our website, and also through our content-sharing partnerships with all of the major media outlets and a lot of the smaller ones across New Zealand. We know we’re fortunate, we know we’re privileged, to be funded by the people of New Zealand, and we certainly take seriously our responsibility to provide valued and trusted services to the public. And as always happens in a time of crisis, RNZ’s audiences are at record levels—we’re experiencing the same audience boost that the others are—as people seek trusted and independent source of information at a time of stress. We’re really proud of how our staff have mobilised to ensure programming and content remain at a high level during the lockdown. Key programming content are being maintained, and additional specialised material on COVID-19 is being produced as well. So we’re really doing all we can to keep people plugged in and communicated with.The health and welfare of our staff is paramount. We’re really pleased to say that our staff are all well. While we’ve had a few staff tested for COVID, none have come back positive yet, which is really good. We’ve also got advance planning in place to make sure we continue to be that trusted information lifeline during what looks like will be a protracted crisis. As we’ve heard today from my colleagues, the media sector is undergoing enormous distress at the moment, and it’s increasingly fragile. I think this requires a range of short- and longer-term measures to ensure the viability of a sustainable network of diverse voices, perspectives, and sources. It can’t be a one-stop shop—we’ve heard that today. And I think that network of sustainable media entities, it’s going to be vital that we build it, because it is going to underpin the health of our democracy in the years ahead.

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RNZ is in a good position to be building block in that network that we do need to build, providing services of the highest quality, fulfilling our statutory role as a lifeline information provider, and also helping and collaborating with other media where we can. One point I would make is that the status quo is broken—I think we’ve heard that really persuasively from my colleagues today—so the future is going to look different. We need to be open-minded about that, and we will need to innovate. But the future will be a range of things. It will have private companies, large and small. It will have public funding in the mix as well, and, within that, the role of public service broadcasting, which is what RNZ does, will be a vital ingredient. So I’m happy to take questions.

Bridges Hey, well, thank you so much, Paul, and can I just acknowledge what you say, which is, you know, the importance of that trusted information at this point in time is paramount. I’ve just got one minor point, in a way, but I suppose it’s part of this changing landscape. You at RNZ provide stories to other platforms—[Inaudible], for example. Tell us how that works and, I suppose, the future of that sort of sharing.

Thompson Look, our view is that we’re privileged to be funded by the public, so if we can get our content to more New Zealanders by sharing it with the likes of Stuff, or Newsroom, the New Zealand Herald, NZME, MediaWorks, TVNZ—we’ve got content agreements with all of those outlets—we think that we get more value from the public by sharing that with them. We don’t do it on a commercial basis; we do it to support the industry and connect with the wonderfully large and diverse audiences that those entities have. So we have a two-prong strategy: one is to keep our own services strong, and they’re at record levels, and also to share and diversify our audiences by working with those other partners. So I think whatever happens in future, we think that content-sharing model is something that RNZ can provide, which helps both New Zealanders and the wider sector. It’s not a total solution, but I think it is an important strand for the future.

Bridges Thank you. Melissa Lee.Lee Thank you, Mr Chair. Paul, RNZ is here before the

committee in a rather unique situation, being the only non-commercial media entity appearing before the select committee. How has COVID-19 impacted on the role of RNZ?

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Thompson Well, I think the key impact is that because we are an information lifeline with a statutory responsibility to be there in times of crisis, we’ve had to make sure that despite all the challenges of working remotely and managing the health and welfare of our staff, we’ve had to ensure that we’re absolutely at the top of our game, not only maintaining all the things we normally do—focusing on COVID-19, obviously—but also doing a whole range of specialist material, such as a daily COVID podcast and a newsletter and lots of deep diving into the practicalities and the challenges that the virus is creating. So the nub of the challenge is that we absolutely need to perform at a higher level. And the other part of it, which I touched on before, is we have to make sure that content goes as far and wide as we can for our content sharing. The other element is making sure that we are providing trusted, comprehensive information and that we’re live with this big rolling story.

Lee So unlike other media who actually heavily rely on advertising, you’ve had no impact?

Thompson There is an impact on us, because whilst most of our funding—90 percent of our funding—comes via the Government, we do have some commercial revenue, which is potentially impacted because our clients are the commercial media companies, and they purchase transmission services from us, so there is a potential impact around transmission costs, but by and large, you’re right. We are very fortunate to be—most of our funding is public funding. And, of course, that’s why organisations like RNZ exist, that’s why public service broadcasting exists—because we’re meant to be able to operate without missing a beat when things get really tough.

Lee NZ On Air and Creative New Zealand have both created variations of emergency support for content creators as a result of COVID-19 impacting many production companies and content creators and industry workers alike. Has RNZ actually applied for any of that funding?

Thompson We have made—we did make a bid for the NZ On Air funding which was announced this week, but we weren’t successful. We were working with the private production sector to do that. But apart from that, we haven’t put our hand up for that money. We think that, probably at the moment, our focus is on making sure we do a good job and acknowledging that the private sector are the ones who are probably going to be first in the queue there.

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Lee Just last question—in terms of plurality of voice that everyone’s actually been talking about, if Radio New Zealand, RNZ, is actually sharing their content to all the other media, for example, how does it answer the diversity question? How does it answer the plurality question?

Thompson Great question. I think what it means is that those platforms and entities who want to make use of our content—it provides them with some additional content which means they can redirect their staff to do stories they wouldn’t otherwise want to do. So it really achieves two things: firstly, our publicly funded content gets to more people, and secondly, it probably just provides a bit of support of those partners to actually focus on other issues. So in total, the diversity of content is probably enhanced.

Bridges Thank you. Marama Davidson.Davidson Kia ora Paul. Really wonderful to hear from you. I want to

get to the nub—I think it’s that diversity of content and quality of content—and I want to get to the nub. Is it the public funding or is it simply about who you hire? Speaking personally, I’ve certainly noticed increased quality and breadth when it comes to reporting, for example, on Māori issues from RNZ, and a nuanced understanding of the issues, which, you know, only some journalists and some reports can ever have. What does that come down to, Paul? And I’m acknowledging that that can exist across other outlets as well, but for RNZ, what can you talk to us about—what does that come down to?

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Thompson Well, we are a public space. We are a non-commercial public space, where the audience—we engage with the audience as citizens, not as consumers, and our business model doesn’t require us to commercialise the audience. That’s not to say that the work of other media companies that are advertising-supported isn’t important; it’s just that what we do is different. But that means that we can do different sorts of content; we can innovate in ways that others can’t—for example, by sharing our content. And the other point I’d make is that we have a charter, a piece of legislation that requires us to reflect all of New Zealand’s languages and cultures and diverse communities. So we’ve done a lot of work in the last few years of making sure that we are more reflecting of the whole of the New Zealand whānau, and I think what you’re noticing in terms of the steady improvement in our Māori content is one element of that. We also run RNZ Pacific, which is the most credible source of news for the Pacific, so we’re a broad church and we can do those things in different ways because we’re a public service broadcaster funded by New Zealanders. We’re not—and we never should be—the whole of the media sector, but we are a vital ingredient, and I suspect that our model will become more important in future because as the commercial challenges continue to grow for media model, we need to be able to fill some of those gaps, but we need to do it in a way where we help sustain a diversity and plurality of voices. The question of whether there needs to be a plurality of organisations as well as a sustainable media sector—I don’t see them as quite as binary as perhaps some other presenters have said. I think we need to be looking to do both.

Bridges Thank you, thank you. And Paul Goldsmith.Goldsmith Thank you, Mr Chair. I feel like I need to ask you a tough

journalistic question but I can’t think of too much, other than to say what’s the latest with Concert FM? I’m sure during this time of difficulty people would be likely to be listening to a bit of Beethoven and Mozart to get them through. What’s the latest there?

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Thompson RNZ Concert’s doing a great job of providing entertainment and solace to the community during these times. It’s a nice point of difference from the very hard-nosed news agenda that tends to be dominating on our website and on RNZ National. But look, RNZ Concert—we have made it clear that it has a strong future as an engaging, comprehensive classical music service available on FM. We’ve been through the traps on that this year, and that’s clear, and I just want to give that assurance today. We think it can also do more in future and perhaps also play a vital role as we help the orchestras recover from COVID. So the role of RNZ Concert in terms of capturing and broadcasting live performance is likely to be something that we emphasise in future.

Bridges I feel sure that Professor Sir David Skegg is listening to a little classical FM as we—or Concert, I should say, FM—as we speak, judging on the bust he had in the background in the early days of this Zoom meeting. Hey, Paul, thank you very much. We really—oh, I see, sorry, there’s Michael Wood.

Wood Thank you very much, Mr Chair, and thank you for your presentation, Paul. My question to you is this: the conditions that have been created by COVID-19 have brought to the surface some really serious issues across the sector, and we’ve canvassed many of those this morning. Primarily, those have affected, as you’ve pointed out, private sector players, but has this crisis changed your thinking in any way about the role of public service broadcasting within the media landscape? Has it affirmed any views, changed any views that you have? Interested in your views on that.

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Thompson Look, it hasn’t changed my view, but I think it’s made clear that the work that RNZ does is vital. We really are the only pure public service broadcaster in New Zealand, and you can see in terms of the way that audience is engaging with us that we are an outlet that people look to in times of stress and crisis. So it really, I think, suggests to me that we need to continue to do a really good job and look to play a very significant role in the new media ecosystem that’s going to develop, and I think part of that new media ecosystem will be an expanded role for public service media. It’s not going to be a complete solution, of course, but I think there are more things that we can do, and that is because of our non-commercial basis—that we can fill gaps, we can work with others in a way that others can’t, and we can always focus on the wider community needs and not on commercial interests. We’re very fortunate to be in that position, so I think we have a lot to contribute in future.

Bridges Paul, thank you very much. We appreciate your time.Thompson Thank you.Bridges We’ll go to the New Zealand Community Newspapers

Association and David Mackenzie. David, thanks very much for joining us—I think from Cambridge, if I’m right—and we look forward to your opening remarks.

Mackenzie Yeah, good morning all. Thank you Mr Chair, and thank you for the opportunity—not good morning, is it? It’s good afternoon now, isn’t it? Thank you for the opportunity to speak here today. Look, I’m Dave Mackenzie and representing the New Zealand Independent Community Newspapers Association (CNA) in my role in the association as the president. The CNA has approximately 80 masthead publications that are independently and locally New Zealand - owned. We are an organisation that is made up predominantly of SMEs, and by and large, on average, per publication, we tend to employ about 10 full-time equivalent employees, and these are all spread across the geographical land of New Zealand. Our members are the newspapers who employ the local journalists and staff in New Zealand’s communities. These communities are not able to be served by the daily newspapers in the terms of local content or local news. We provide that local content that’s much needed at this time, especially at this time.

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Community newspapers have a much deeper engagement with their local communities, and that’s due to the relevance of their content, and that perhaps, the daily newspapers simply do not have, and nor, quite frankly, social media provides. Community newspapers are fully funded by our print advertising, and that is our business model, and we see that’s a key part of our business. Many of our members do have websites, but as we know, the commercial reality of a website model is not strong. Our members are all passionate and proud owners of local community newspapers, and what we all love more than anything else is to serve our local communities.COVID-19 has had a profound impact on the community newspaper industry. None of us know what our new business model’s going to look like when we come out of this, and this is in both the short term and the long term. Right now, none of our members are expecting to do better than break even with their businesses. To break even would be a great achievement in the next 18 months. We want the Government to know that we need all the help possible to break even. SMEs do not have the capacity for debt. Community newspapers simply cannot borrow funds to get through this. The fixed costs place too much burden on our profitability—profits that secure SME owners are living. SME owners need a living too.Our key concerns: we need cash to survive, like any other business. We need local businesses to survive. We need our local advertisers to have a reason to start advertising again. We need our local community newspapers to be able to publish in a printed form again. The digital alternative that the ministry has imposed on most of our members is not an option for us. We cannot secure the advertising revenue to support this way to publish. It simply does not work, and nor do the advertisers see it working.

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We do use a mix of young people and adults to deliver our newspapers in our urban areas. A concern is that the adults were banned for community newspapers as well. Why is this imposed on us? And this is despite us putting protocols to the ministry showing how we can safely deliver using adults. Government’s persistence to advertise on social media and also in daily newspapers, while ignoring community newspapers, is a concern for us. We are worried about fake news, so we should stop supporting the platforms that promote fake news or foster fake news. The exclusion of community newspapers to urban letterboxes is a major, major concern. It’s not just for our businesses but for our local readers. Why are the dailies allowed to deliver six days a week, yet community newspapers one day a week are not allowed? One could argue, if you’re wanting to minimise transaction, perhaps daily newspapers should have been stopped and community newspapers should have been allowed. I think a level platform is probably a better option for all newspapers.So what needs to be done? We need all community newspapers to be able to start publishing again—and yes, safely. We all acknowledge that. None of our members want to do this not safely. We want to see this virus gone. We must have the ability to deliver to urban letterboxes and not be treated differently to other newspapers. We need the Government to advertise in all community newspapers and not show favouritism to the social media platforms. Our local advertisers—many are SMEs like us—need a reason to advertise again. They do need financial assistance and to get their business operating again, and, of course, get this country going again. Any Government financial assistance must apply to all New Zealand businesses—or New Zealand media, I should say—not just a few big corporates whose balance sheets are challenged and were challenged before COVID-19. Support all New Zealand media and let’s see who survives after that. And that’s my point.

Bridges Hey, thank you very much, David. And just give us a sense—I mean, I think I know, but your 80 mastheads—give us some of your names. I mean, I know you probably—it’s unfair to pick out a small number, but just so New Zealanders get a sense of what we’re talking about here.

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Mackenzie Yeah, I mean we’ve got, you know, from the Waiheke Weekender, the Gulf News, to the Cambridge News, to The Weekend Sun in Tauranga, through to—we heard our media group mentioned before—the Nelson Weekly. We’ve got a mass geographical cover across our country. And then you’ve got, in far remote areas like—The Golden Bay Weekly—right out in Tākaka, which just are not serviced by daily newspapers. So there’s a handful.

Bridges And look, I think you explained it pretty well, but just this essential services issue. So where we’ve gone to is there was nothing for your outlets that weren’t daily—there was a complete ban, if you like. We’ve then gone to a situation where if they do it digitally they are able to, but still, for example, if you’re a weekly or a biweekly or the like, you’re not able to put those through the letterbox. Have I, sort of, got that accurately?

Mackenzie Yeah. The commission came about if you’re a community newspaper that serviced a remote, rural area, then that was given the freedom to publish, by and large because it’s largely delivered by New Zealand Post. But the exclusion came for delivering urbanly. And then, also, a little bit of freedom was shown to, sort of, ethnic publications. So urban towns across New Zealand cannot get their papers to them, the argument being that delivery—or youth was not deemed an effective way to deliver. Well, many of our papers actually do have adults, so what’s wrong with those adults being able to deliver those newspapers? And for a transaction once a week, that’s what’s made it pretty hard for our members to stomach.

Bridges What proportion of your businesses can’t operate because of the restrictions?

Mackenzie Well, of our 80 members, I don’t have an exact percentage, but certainly, at an estimate, I’d say two-thirds of them have not been able to publish.

Bridges And what does it do to their financial viability?Mackenzie It’s a serious issue. If they can’t publish, they don’t have

a revenue stream, they don’t have an income, and every day that passes is another day that these business owners are questioning their existence.

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Bridges And just give us a sense of—we’ve heard now from the big end of town, if you like, and we get a sense of the commercial pressures both before COVID-19 and post - COVID-19 for the NZMEs and Stuffs of this world. Could you just describe [Inaudible] the financial position of your members—were they incredibly stressed going into this, or was it not as bad as it was for the big papers, and what’s the effect of COVID-19 been?

Mackenzie No, I would say before going into COVID-19, many of our members were in good health. We’re not getting rich. There’s no pot of gold in newspapers—we all know that. But we run a very low-cost, locally owned, and—I talked about before—not debt-run businesses, and we run many from people’s homes, like most other small businesses in this country. So that’s our model. So we were actually in good shape, but this has really knocked us.

Bridges Will any go out of business, do you think, as a result of the restrictions?

Mackenzie I think so.Bridges Right. David Seymour.Seymour Yes, well, look, thank you, David. And as a local MP, I

know that your publications have a real sense of place, and I certainly advertise and interact with them accordingly. You’ve talked a bit about the contrast between the way that your publications have been treated versus dailies and other New Zealand media. I wondered if you are aware of what the equivalent situation is for your counterparts in Australia and how they’ve been treated through this COVID-19 crisis.

Mackenzie Yeah, look, I have heard that a number of the corporate-owned community newspapers in Australia have stopped publishing, but I don’t have greater transparency of the independent owners in Australia, and so I don’t have transparency on that.

Seymour Do you know why they’ve stopped?Mackenzie Quite frankly, for commercial reasons.Seymour Right. So it’s not that they’ve been restrained from

publishing?Mackenzie Yeah. I don’t know the details of the Australian

[Inaudible], but I do know that their circumstances are very different to what we [Inaudible] here in New Zealand, so I don’t have the finer details of that.

Seymour Thank you.

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Bridges Melissa Lee.Lee Oh, sorry, I didn’t hear “Melissa”. Thank you, Mr Chair.

David, the community media and local journalism seem to have been disproportionately impacted by the level 4 lockdown, and you earlier mentioned something about the ethnic community journalism as well—ethnic papers. Ethnic papers are now allowed to publish—initially, they were not—but community papers still can’t publish. Do you think there is actually bias there, and what’s that about?

Mackenzie Yeah, look, my members are very vocal about it—they’ve certainly been very vocal about it. They feel that they’ve been unfairly treated. And certainly they’re happy that the ethnic publications can publish; the issue is more about why is it that a local community newspaper can’t use an adult to deliver a newspaper, yet a daily newspaper can use an adult to deliver a paper to a letterbox. It’s simply that.

Lee Isn’t that similar also—I think in terms of ethnic media, they have a particular audience that, you know, they have; they have different language issues that they publish to. Community newspapers also have similar issues. They have an identified local community, whether it’s actually Waiheke or Tauranga or wherever—they have a local perspective or local stories that they could potentially be doing and advertising and what have you, so you are specifically targeting different audiences than mainstream media, per se. So, I mean, you know, I think a lot of people actually felt that losing local media was actually quite devastating for a lot of communities who don’t have access to mainstream media. Is that true?

Mackenzie Most definitely, and we had a case where a reporter from my own paper got phoned by an elderly man, sort of in his 80s, when he got his first paper. He just rung us up, in tears, saying “Please keep publishing. You’re my only connection.” I also make the point that, you know, these communities—the only way they get their little local community news is from their local community paper.

Lee I know that your annual conference was going to take place just a few days from now, and one of the agenda items was how the local democracy reporting pilot and RNZ worked with the Community Newspaper Association—that’s from the online agenda. Do you see this pilot future as necessary for New Zealand, and how do you think community newspapers will actually, sort of, come out of COVID-19?

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Mackenzie Yeah. Yeah, look, the local democracy—well, look, from what we’re seeing, it’s early days yet. Some, a very small amount of our members, have managed to access the content, but I think, when you actually just look at the scheme, it’s a handful of reporters, you know, that can’t cover that local community news that our communities get, so I don’t really see it actually working for many of our communities. It may work for the daily papers, but I can’t see it, in its current form how it is, really providing that unique community content that our readers want.

Lee So immediate fixes for you to operate now?Mackenzie Our immediate fix as the operator is to get our business

trading again and operating again, and our local businesses. Our customer base is, by and large, 100 percent local business.

Bridges Thanks, David. Kiri Allan.Allan David, thank you for your time this morning. I know you

weren’t originally on the list to attend, so it’s good that you’ve been able to make this session. Look, I guess, a couple of things. In an electorate like mine, we’re heavily reliant on your membership, basically, to provide information to our people. Whakatane Beacon, for example—it’s only published every other day. Wairoa Star was another publication that fell within the original proposals. One of the amendments, and you alluded to it prior, was that where there was a community need, where there was a geographical gap that couldn’t be filled by other mediums, and where those publications could be either delivered through New Zealand Post or through, you know, just local dairies and supermarkets, that was, essentially, the fix to ensure that, you know, these communities could have access to information—good information—and we felt like that was really important.I just heard you say prior that, perhaps, two-thirds of your membership are no longer in circulation. I was interested in that number, because I did wonder—to me, I would have thought a number of those publications met the amended definition. Was it more of a choice that they didn’t want to sell or publish their publications through dairies or supermarkets or—what happened there?

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Mackenzie Yeah, there’s a couple of things that went on. When the first guidance came out that excluded community newspapers, it was the best part of six days before we got the updated guidance come out. A lot of damage was done in that six days, and—because there was media coverage going round that community newspapers can’t publish, and very quickly a lot of our members saw advertising revenue dry up very fast, which we believe if we had been able to continue publishing through that time and not had that six-day interruption, it might have been a different story. It would have given us time to get round to our advertisers to actually explain, “Hey, this is what the new model’s going to look like.” So that had a profound impact on us as well.The other thing also is that, yeah, look, those remote areas can deliver via the rural, but the business model does require to go to the urban towns as well, and a lot of community newspapers—their split of circulation is probably, say, two-thirds urban town and one-third rural. So just starting up your presses for just the rural customers without the urban and maybe some of the shops deliveries as well—because, let’s be honest, it’s only really the essential services that actually are able to take our papers, because they’re very busy at the moment. It greatly reduced our reach.

Allan Look, and I appreciate, you know, we’ve received a lot of correspondence—I think all of us have on this call—and I think we’ve heard strongly from your membership.The proposed period for alert level 4 is four weeks, and there were really clear, overarching public health guidelines that drove a number of decisions, and no doubt that will be an ongoing discussion as to, you know, the severity and length and so forth. But the indications—it looked like that we may be transitioning out of that period at some time soon, perhaps. Are you confident that your membership will be able to get up and going again, because, I mean, this is a blanket—basically, it’s impacted every single part of every single society, every business, every person, and it’s put a pause on everything. But we have the opportunity to start to rebuild shortly. So I guess, you know, in that regard, do you feel like your membership, along with the rest of New Zealand, will have that opportunity to rebuild when we do move from alert level 4?

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Mackenzie Yeah, I guess a couple of things. If we’re moving from level 4 to level 3, what is the clarity around level 3, and if it’s not much different to level 4, then the answer is not much is going to change for us. Again, our lifeblood is our local business advertisers, so it’s all very well for us to start being able to publish, but if our local businesses can’t do anything, then we don’t have an income. So we’re sort of hand in hand with our local businesses as well. You know, I guess as we progress into a more better environment, which we all know we’re going to get there in time, I believe our members—you know, I talked about them being passionate, proud owners that love serving their community. It’s the nature of our business and the nature of the way we’re structured and our nimbleness and our pure determination and grit that will get us back out there, and, quite frankly, our desire to serve our communities and the role we play that will get us going again. But this is a massive whack in between, and, look, you know, us and many of our advertisers are feeling the same pain, so, you know, we’re not saying we’re any different to our advertisers.

Bridges Well, thank you very much, David. We really appreciate your time and the message you’ve brought on behalf of your members. Thank you so much. We’re now going to move to the media organisations that have somewhat different models to what we’ve discussed today, in a sense, and nevertheless do a great job. So we welcome Newsroom and co-editor Mark Jennings. Mark, welcome, and we look forward to your opening remarks.

Jennings Yes, thank you, Simon, and thank you for the chance for some of the newer organisations, as you point out, being able to present. I know that Duncan and Pattrick are following me, so I’m sure what they have to say will be good too.I think as the other speakers have pointed out, one of the key factors here is that we have two parts to the landscape: the pre-COVID part, as I would call it, and the during-COVID part. You know, one of the issues pre-COVID has been the failure of the advertising model, which has been discussed this morning, and that’s come about because of the emergence of the social media platforms, their dominance. I think Gavin Ellis put the revenue at about 70 percent that they were taking. The advertising people that I speak to put it at 80 to 90 percent, so I think the problem is even higher than probably has been recognised.

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One of the things that’s happened with this model is that there has been extreme competition for the small amount that is left over and available, and because advertisers buy on traffic numbers—that’s readers, viewers, listeners—it’s led to this phenomena of what we call clickbait, as you’ll all be aware of in your jobs, and that’s led to some loss of reputation for some media organisations. So what we’ve been, you know, finding here is that when you add that problem to what I think is the other major problem, and that’s ownership, you get a really serious impact.The issues with ownership, essentially—I think it was pointed out right back at the beginning, again, by Gavin— is that if you have private equity owners, they’re often servicing large amounts of debt, and Michael talked about that. It’s always been an issue with MediaWorks. Private equity owners really have not, in my view, been great for that business, and they are not great media owners at all. Or in, say, NZME’s case, where the sharemarket listing really means they have to focus on shareholder returns—and that drives a lot of the issues that major media organisation are now facing, particularly in the face of advertising collapse.It was these factors, I guess, that led Tim Murphy, Bernard Hickey, and myself to set up Newsroom. We saw there was a gap, perhaps, in the market for quality journalism, and we knew that if we could create a new business model where there were diversified streams of revenues, we could perhaps be successful. What we are is a New Zealand - owned, lean, agile company with a single focus, and that’s on quality news.In terms of the current situation, Newsroom has had good support from its advertising partners, again because our model’s different. We have 12-month contracts with our advertising or support partners, as we call them. The issue for us will be later in the year when those contracts expire and need to be renegotiated, and that could be problematic if the economy is struggling, as we suspect it probably will be.

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One of the things that’s happened during the crisis, obviously, and Shayne Currie alluded to it, is that the readership has—well, ours was growing strongly anyway, but it’s skyrocketed during the crisis. We’re now seeing between four and five times our normal levels. Along with that has been a really positive development for us, and that’s been people donating through PressPatron, and we’ve seen that shoot up. And it’s one of the things that perhaps we’d like to suggest that the Government looks at, and that’s either making those donations tax deductible or, in fact, matching them on a one-for-one basis. And if that was to happen, that would be transformational for a player like us in the current situation.We’ve also benefited from a small amount of Government advertising. More of that would certainly help, but it’s good that we are, as a smaller player, getting some of it. I think the other thing that we would suggest is that NZ On Air receive more funding, and perhaps they set up a special journalism fund that, you know, platforms like ours could access. This would be focused on good, solid journalism outcomes, and I think that’s what we all want at the moment.The other, final thing I would say is that we, obviously, are going to have some restructuring of this industry. I think it’s important that smaller players like us are not adversely impacted by this, because we do think that we are one of the brighter lights in an overall gloomy picture.

Bridges Hey, thank you very much, Mark. I agree with you. I think the small players are vitally important in the landscape and, to use the word of the morning, the plurality we’re after. Hey, can you just explain to us PressPatron? I think I understand it, but it would be good if you could explain that.

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Jennings Yes, so PressPatron is a platform that accepts donations and then handles all the arrangements around that. Instead of individual media companies setting up their own infrastructure around this, the infrastructure is shared across a large number of platforms. I think they’ve spent probably close to half a million dollars developing this platform; individual companies like us couldn’t do that. So we are part of a community that uses PressPatron. It’s worked very well for us, and over the three years we’ve been going, we’ve seen a steady increase in the number of people prepared to donate or pay money for content. And in the last month, that has shot up, amazingly, really.

Bridges Could PressPatron be used to fund this terrible clickbait you’ve talk about, or does the system, effectively, mean that it’s only going to, dare I say it, entities such as your own that really aren’t doing that sort of stuff?

Jennings I think it’s more suited to entities like ourselves, but, no, it could. If Stuff wanted to join PressPatron, it could absolutely do so. Interestingly, the Otago Daily Times, the ODT group in Dunedin, has recently joined it.

Bridges Look, others have got questions, but just very briefly: PressPatron’s very interesting, and I think it’s a good part of the picture. Isn’t the other one—you mention NZ On Air. Is [Inaudible] lack of a better idea, along with some of the other ones we’ve heard, but really beefing that up to fund public-good journalism, because the merit of that is it’s not picking favourites, it’s not picking winners, it ensures that that landscape is there, from the big to the small.

Jennings Yes, I totally agree with you, Simon. We have a very good organisation in NZ On Air. It’s proven, it’s highly efficient, it is a very well-oiled, experienced outfit now. Lots of countries overseas would be really envious of this, and it’s a very quick route. If the Government injects more money into that, it can be distributed evenly, fairly, quickly. It can also be contestable, obviously—best idea wins, etc. So it’s got a lot going for it. I don’t think it’s the complete answer. As people like Michael Anderson pointed out, it’s not the complete answer, but it is a very useful tool.

Bridges Look, one more, and then we’ll—mergers, your view on the mergers, and the talk we’ve had on that. I don’t want to put you offside with all of your former colleagues.

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Jennings Personally, I think it’s too late. I think if that was going to happen, it needed to happen 12 months ago. No disrespect to Stuff and the Herald but I don’t know merging those two groups now is going to save them unless a lot of other things happen.

Bridges Thank you. David Seymour.Seymour Thank you, Simon, and thank you, Mark. Just following on

from this discussion about NZ On Air and PressPatron. The thing I always struggle with is there’s this paradox that news and analysis and critique is a kind of public good that a democracy needs, but one of the things you want to analyse and critique most is the Government, and yet if it’s a public good the idea is the Government becomes the funder. Somehow you need to design an institution to break that loop, because as Gavin Ellis said in his submission, any entity that is the funder is only a parliamentary majority away from being politicised. And I just wonder—you must have spent a lot of time thinking about these kinds of problems. What does the model look like to try and have public funding going to an entity that then does journalist funding but remains truly independent in a sustainable way? I just can’t figure out what the solution to that is, but if we could, then we might have solved the problem.

Jennings Yeah, I think you’re right, David. I think it is hard, and we don’t want too much Government interference in the media, frankly, or political interference. I think New Zealand is—and I’m not, you know, trying to curry favour here, but I think we have a better standard of politician in this country—

Seymour Than Russia, for instance. You can always find an example.

Jennings —yeah—and a general respect for the fourth estate, if you like. I’ve felt very little political interference in all my time in the media, to be honest. So I think you do have to put the right safeguards in place in terms of independent charters, etc., and I think NZ On Air have benefitted from strong leadership, and I don’t sense a lot of political interference in that. I think the issue there is the appointment of the board. I’d like to see that be more non-political. I really don’t like the idea of, if you like, political hacks being rewarded by being put on boards, if you like. So I think people for that board should be chosen on their skills, irrespective of their political leanings. Yeah, it’s hard, and I think the least amount of Government direct support is preferable.

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Bridges It’s an argument, David, we can take up with Gavin Ellis, but I would just suggest to you the alternative to a beefed–up NZ On Air - type thing is big cash injections into public broadcasters. So pick your [Inaudible].

Seymour Yeah, and not to argue with our expert guest, but, you know, there is a precedent where New Zealand hasn’t been so good. Once upon a time, NZBC staff used to line up on the balcony to welcome Prime Minister Holyoake, who was very clearly their owner. And it’s nice to think that we’re a better class of people in New Zealand, but, you know, we’re never that far away from that sort of degradation.

Bridges Look, I see there are questions. I apologise, Mark. I just know how far behind we are. I think we’ll go The Spinoff, but I assure those with their hands up, you’ll get a crack at the end. Mark, that was incredibly helpful, and we really appreciate your time.

Jennings No problem.Bridges We’re going to The Spinoff and we’ve got Duncan Greive,

Managing Editor of The Spinoff. Duncan, welcome. We look forward to your opening remarks.

Greive Kia ora koutou katoa, and thank you, Simon. Thank you all for making time for the media. I’m sure that every industry would appreciate this kind of an audience and an opportunity, and there are plenty out there that are struggling, so I think it says something a little about the media and its role in society that we’ve been given this time—the fact that it, essentially, outperforms its economic scale or has a particular role in society.So I want to talk briefly about The Spinoff, about its funding, about how we’re navigating this, and then give some thoughts about the ecosystem more broadly. The Spinoff is a five-year-old independent New Zealand - owned start-up. We employ directly around a dozen journalists and deploy a network of freelancers to fill out our content. We consider ourselves a magazine and not a news site—a bit slower, a lot less content, but trying to take a bit more time with it.

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Historically, we were funded near exclusively by commercial partnerships, often content partnerships, you know, and similar to Newsroom, they are long term, so that we didn’t have that immediate white hot impact on our revenues the same way some of the bigger players did. But (a) it doesn’t mean that that won’t come—it’s just going to be somewhat delayed—and (b) we actually did lose a number of contracts very quickly, including our largest. And, again, like Newsroom, we are very fortunate in that we had a reader revenue programme through The Spinoff members, and that was launched nine months ago, and I think it’s no exaggeration to say that we would be in a very similar position to NZME if we had not had that lifeline there. We’ve had a stunning growth there, and that has basically given us the tools to survive the winter, survive the lockdown, and I don’t think anyone is capable of accurately predicting what comes beyond that. So we’re very grateful to our members and to those commercial partners who have stuck around for that.As people have said before, COVID-19 has been a paradox for all the advertising-funded media. I think we’ve done our best work. It’s been our most viewed. We’ve all worked incredible hours, shown creativity, agility, adapted to new working environments, new colleagues—I often work with my six-year-old daughter alongside me, which is different—and I think thoroughly lived up to the designation of being an essential service in both transmitting Government messages and, where appropriate, critiquing them at various times. But it’s interesting that unlike almost all other essential services, journalism and media has done that in a climate where its revenues have plummeted and where the rest are either publically funded or have seen an uplift, as you might have seen with supermarkets. But I think that probably reveals something that was always there in the ad-funded model, but it took unique circumstances to really, sort of, rip it open. I think it’s also the result of what we’ve seen over a long period of time with the digital transition, with the rise of social media, essentially, unregulated, and that enormous scale right now.

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But at the same time, I couldn’t be prouder of how our organisation has responded. You know, watching Toby Morris and Siouxsie Wiles’ work go around the world—it was released under creative commons, and has been adopted by the Governments of Argentina, Germany, and Australia for their use. And it’s that kind of thing that we derive no economic benefit, nor do we seek one, from that, but it has transparently had a huge public-good impact, and I think that that sort of shows the tragedy of the commons that has been the degradation of media, in that we all benefit from a solid media ecosystem and we all lose a bit when it, sort of, falls away.I just want to illustrate this with one small example from an interview I conducted last week with Tim Brown, who’s the founder of Allbirds. The idea for Allbirds came to him while he was reading an issue of Metro where the wool [Inaudible] talked about the lack of innovation in wool, and that ended up giving him the idea to make shoes out of wool, which is now—you know, Allbirds at its last valuation was $1.4 billion. The amount of economic value that was created by that thought is incalculable and certainly far beyond what Metro, which has obviously closed a couple of weeks ago, ever derived from it, but society derives that, and there are dozens of examples of the way that the media, in shining a light into what we are all getting up to, the good and the bad of it, elevates us all. So I think as the number of journalists and the media more broadly—because it’s not just about journalism, as Michael said. It’s about all the sectors that lead on it, the culture, the community, sports, production sector—a lot of it runs through media, and as it fails they all find their jobs more difficult.

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So I think it’s a really important issue. I don’t envy the Government their job because, you know, as David just alluded to, there is immense complexity to solve. There isn’t any—you know, it’s the least bad option that we’re shooting for at the moment, because they all have issues. The thing that I think needs to be borne in mind is that whatever help is given to the sector should be to the sector as a whole. From magazines, who, to my mind, were absolutely wrongly excluded from the essential service designation, to iwi radio, to ethnic community papers, and small town papers, we all do a different job for a different audience, and I think it would be a danger just to single out particular players because of their scale or prominence. So whether that’s through a NZ On Air - type fund or reforms to the tax treatment of media outlets, I think it just needs to be carefully weighed to make sure it takes care of everyone. That’s all I got. Happy to take any questions.

Bridges Sorry. I am back—just delayed there for a second. Hey, let me start you with a very brief one. If you were Prime Minister or Minister of broadcasting, what would you do?

Greive I think, like I said, it is the least bad option that we’re looking for, but this is an issue that requires immediate action. So I think NZ On Air, as it exists, with relationships to a lot of media and the ability to quickly spin up relationships with far more, is a great vehicle for it. I think it’s widely respected. It’s considered an honest broker, and it can—if it were to just target journalism or, sort of, public-good media, it can do a lot more very quickly and it can do it in a way that doesn’t impact everyone else.I think further down the line, if you want to fund that, we’ve needed a digital services tax for a long time. I think it’s really, really mad that as a nation we just allow the Facebook group of social media providers to come in, spread misinformation, and then the Government will do a campaign to solve that misinformation—so they’re, effectively, paid to fix a problem that they created. And that’s—at the very least you need to solve that contradiction, and you could carve off some of that to help fund an expanded NZ On Air.

Bridges We could. Thank you. Michael Wood.Wood Thank you, Mr Chair. Duncan, I think it’s really helpful to

have you here this morning, along with Mark, as some people who have helped to create new and more innovative space in the ecosystem.

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My question is about how we do what comes next, because, once we get through this immediate crisis, there are still big questions facing journalism and media in New Zealand, and I want to go to the question of how and the process for doing that. One option would be creative destruction: we let companies rise or fall; smart, innovative people come through and develop new channels. One option would be to tweak regulatory settings and funding mechanisms that the Government has—both you and Mark have touched on those. Another option would be what was proposed at the beginning of this session by Gavin, which was having some kind of a national conversation around what a functional, healthy media landscape would look like in a democracy like New Zealand. How do you think we should go about this once we get through the immediate crisis period?

Greive I mean, you know, I’m wearing a few hats here, but as a business operator, this creative destruction is not unattractive to me. I really—I back my team, and, in a very narrow sense, I believe that we would be a survivor through that. But as a journalist and a participant in this industry, the idea horrifies me. You know, The Spinoff can only exist as part of an ecosystem. We’re 12 journalists. We used to have 4,000; we’re probably down under 2,000 now, as a country, despite our population having significantly risen. So we all feed off one another—both for competition and just reading one another’s work and sparking ideas out of that. So I think the Government shouldn’t look to distort the market in that it shouldn’t look to favour particular players, but I think some level of triage—is the word which has been used—needs to happen.Things like the Bretton Woods Conference that Gavin refers to—I love the idea of it. In some ways, I feel like we’ve been doing that for 18 months and not really getting a long way with it, but that fits the second order of business in terms of the immediate heat of this issue.

Bridges Hey, thanks very much. Great question and answer there. Michael Woodhouse.

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WoodhouseThank you, Chair. Duncan, one of the themes this morning—and I’m paraphrasing it here—is that if it wasn’t for the big bad Google and Facebook media organisations, we’d be in a much less parlous state, but that overlooks the point that people don’t place their ad revenue to benefit media organisations; they do it to benefit their own. And I think it’s probably naive to think that that reach into those online social media platforms won’t continue.You and Mark have a different business model, one where through things like reader revenue and other business sponsorships, if you like, you’ve got a different business model, one that pays for content more than advertising, it seems to me. Given that, where do you see this going? Is that the future of media? Are we going to have to go back to paying more for content than relying on advertising revenue to sustain media businesses? What might that future look like, in your view?

Greive I mean, I think the answer’s all of the above. There was a long period where media was a very profitable business to be in. I remember interviewing Gavin about this, sort of, a dozen years ago and talking about the rivers of gold that were classified advertising. And I think it’s clear that there isn’t going to be a, sort of, new golden age in that respect, but if you want to serve in a small, diverse, dispersed community like New Zealand, you want to serve those audiences and have the sort of multi-layers of public good that come out of that, then you’re going to need to probably provide some public funding, which, like I said, I don’t dispute the—Facebook and Google are not simple organisations. They provide incredible value. They also do some things which aren’t that good for the public. But, you know, I think they could just stand to be taxed far more than they are, the same way that other honest businesses are in New Zealand, and that revenue can fund a whole range of public-good outcomes.

Bridges Hey, look, thanks so much, Duncan. We’ve got to keep moving. I know there are people with their hands, but we have two more submitters. We have both BusinessDesk and also iwi radio network. So we’re going to move now to—but thank you for your time. Appreciate it. Great [Inaudible] businesses. And Pattrick Smellie—we welcome your opening remarks, Pattrick.

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Smellie Thank you, Mr Chair. And thank you for making the time for us to appear. I just wanted to talk very quickly about who we are. We may be less known than some of the other private small media players. We’ve been around since 2008—in fact, we were established just before the global financial crisis, and we certainly learnt at that point that appetite for news media grows exponentially during crisis. So there is enormous opportunity in this environment for media, in some respects.I also think that it’s quite possible that everybody who’s listening to this has probably read far more BusinessDesk copy than they ever realised, because for the first eight or nine years of our existence, we operated as, effectively, a small replacement version of the New Zealand Press Association for business, economic, and political economy news and have been doing that job in a trustworthy and thoughtful and serious way since 2008. It’s really only in the last couple of years that as traditional legacy media have faded and the number of people that we could actually sell our service to started to diminish that we’ve actually pivoted our model completely towards a business-to-consumer and business-to-business subscription model. And perhaps unlike the larger existing media players—long-term existing media players—we’ve been much more able to pivot quickly and nimbly because we’re a smaller operation.We’re certainly, in my view, one of the sources of plurality, which we deeply believe is incredibly important to the New Zealand media scene and is one of the reasons why we were active in submitting against the NZME-Stuff merger at the time that it was first mooted, although, in fact, I do believe perhaps the circumstances of both those businesses is such that that should perhaps be contemplated as one way to try to stem the difficulties that they face or at least give them an opportunity to do so. Where are we now? We’re investing heavily in our website and our team and building professional sales and marketing. We’ve actually just done our second refresh of our website in the last five months, just the weekend before last. But, at present, it’s fair to say that we’re very reliant on shareholder support for our working capital. We’re in a good position in that we don’t have to go and see a bank at the moment, but we’re in a growth and investment phase, not in a profit and dividend phase, although we have been profitable in the past.

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So we’re on a credible, carefully watched path to commercial viability without Government assistance, as it stands. We’ve got some advantages: we’re not reliant on advertising, although we did lose a large chunk of advertising with our relaunch in late February as COVID-19 started to come on to large corporate advertisers’ agendas. We don’t own any printing presses, we don’t own any physical distribution networks, so we don’t have costs that the legacy publishers have. And in that respect, we see ourselves as being very much the way that journalism will look in the future, where most profitable journalism is going to be delivered digitally.In the COVID-19 environment, it’s fair to say the corporate subscription environment has gone very, very quiet, but we would expect it to come back. We’ve been gratified and slightly amazed by the growth that we’ve seen in individual subscriptions—there is clearly appetite for what we’re doing from individual subscribers, for people looking for serious, thoughtful coverage of what’s happening to the economy in this very unusual situation that we’re in now. And we have, more recently, been advocating more directly to Government Ministers and Government agencies to say it’s a source of constant frustration to us as a longstanding part of the New Zealand media ecosystem that, for example, no MP can access our material through the Parliamentary Library—that most Government agencies might have one or two subscriptions, even though we may be creating coverage which is enormously focused on their areas of interest. We hear a lot of ministerial “We support New Zealand media.” and “What can we do to support it?”. It would help if Government agencies were to invest in the news which is available. I think there’s a bit of subscription fatigue, perhaps, as more and more news organisations expect to be, or want to be, paid. We’ve always worked on that basis: don’t work for free—that historic mistake that the news organisations made in the first place when the internet came along. We haven’t made that mistake, and we’re determined to succeed on that basis.

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In terms, very quickly, of maybe what to do, I don’t think there’s any easy answer. COVID is, effectively, accelerating trends that were already in place for traditional media and new media. I’m very sceptical about the view that the answer is to expect the Government to save legacy media. It needs to be given opportunity and responsibility to save itself, in my view. I also don’t believe that any level of Government funding which is realistically or politically possible is likely to be able to save the large legacy players. Having said that, I think there is something to be said for taking a more sceptical view about the amount of Government advertising revenue that goes to Google and Facebook—particularly to Facebook, which has, after all, been the architect of a horrific event, or simply the purveyor of the horrific event to the New Zealand public in the last year. There may be a role for NZ On Air to fund more public-good journalism, like the courts, local government, maybe investigative journalism. I wonder whether there’s a case for a digital levy rather than a tax on Facebook and Google, and I’m surprised that, in all of this, there has been no discussion of copyright reform, which would, if anyone was brave enough to tackle that enormous task, make a huge difference to who pays what for material that appears online.So my final point would be just to say: whatever is done to help the large parts of the New Zealand news media, that we can’t hope to replicate at our current size, irrespective of what our long-term ambitions might be, please don’t do anything which kills us off, because we’re part of the answer to plurality, to the future of profitable journalism. I don’t agree with Gavin that it’s not an investable proposition; it is—it’s just changing. So, to the extent that we are a source of plurality and have an optimistic view about journalism, I would hope that we will be given an even playing field on which to play and that, looking forward, we accept that things are going to change in the way that things have been in the past and don’t regard the past as a template for the future of New Zealand news media. Thanks.

Bridges So I think it’s fair to say, isn’t it, then, Pattrick, between you, The Spinoff, and Newsroom—if I can perhaps possibly unfairly characterise them and you—[Inaudible] picking winners issue. You want to make sure there is the level playing field in whatever Government support there is.

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Smellie Well, I think, if there’s going to be new sources of funding, I just hope that they would be evenly contestable. We’re not asking for preferment; we’re certainly not asking for hand-outs. I suppose the one area that the Government might do something which would have an impact on us which we can’t do anything about would be if there was a decision to allow NZME and Stuff to merge. I tend to agree with Mark Jennings’ view, though, that that’s been left too late for it to be particularly successful. I think all it will do is hasten a process by which those businesses will have to have a major clean out. I mean, I’m not happy about it. It doesn’t give me any pleasure to say it, but I do not understand how those businesses can continue to be profitable, COVID or no COVID, just on what the numbers tell you.

Bridges I suppose, if we stand back, though, and don’t get into “this player” and “that player”, you’ve got at one end what Michael Wood has, I think, characterised quite well—”creative destruction”; let the market at it, watch the carnage, and that is one view of life—and then, at the other, what I would characterise as a monolithic big State broadcaster. Now, maybe they’re unfair caricatures, but they’re your polar extremes. Where do you sit in all of that?

Smellie I think that—I do agree that news media plays what is, essentially, a non-commercial role at its best, and therefore there are public policy issues at play which wouldn’t be if we were talking about a lot of other industries. Having said that, I do think you have to let some normal commercial pressures play out, otherwise you’re just going to ossify a series of business models which worked very well in the past but don’t work in the current environment and probably won’t in the future. I would be much more concerned if, for example, TVNZ were to buy Stuff, which has been mooted in the past. It would give them an enormous web presence immediately. I would be much more concerned about that than seeing NZME and Stuff being allowed to attempt to merge.

Bridges I totally agree with you, but what’s your basis for being more concerned about that? What’s the nature of the public-private thing that’s worrying?

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Smellie I think, in a situation where TVNZ were to buy Stuff, they would find it very difficult to justify keeping every regional newsroom open and all of those regional titles. There’s much more likelihood, I think, that a dedicated regional news publisher put together with another dedicated regional news publisher would find more creative ways to keep that regional news service going. I’m very sympathetic to the community newspapers’ argument as well. They are, in many ways, the most important parts of the media ecosystem.

Goldsmith Thank you. I mean, you mentioned copyright reform, and it’s been sort of touched on—the broader issue of getting Google and Facebook to pay for their connection with stories produced by New Zealand producers. I suppose the challenge is how you, sort of, go about dealing with that. I mean, I certainly find it much easier to search for things through Google than through the websites of various New Zealand media. The searching is often better. So are you suggesting—

Smellie You clearly haven’t used ours.Goldsmith Well, maybe. So I’m just interested in what precisely

you’d be suggesting there.Smellie I’m simply suggesting that, in the same way that I think it

was Ian Cross in the 60s and early 70s who managed to get libraries to pay a royalty when books were taken out to the original producers, there must be a way of creating a royalties system for the servicing of news items in Google and Facebook and any other search platform. I understand it’s extremely difficult. I’ve raised it a few times with officials and politicians, who have said, “That’s the last thing we want to do. It’ll take for ever.” But it does seem to me that it’s fundamental.

Dyson Hey, Pattrick, thanks very much for your contribution to this really important topic. I think you were connected right at the very beginning when we heard from Gavin Ellis, who made the point that we really should take this opportunity to get all the key industry players together and have a Bretton Woods Conference on what does the media look like in the future. From what you’ve said, I was inclined to think you might not support that idea, but maybe I’ll just ask you directly. What do you think of that proposal?

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Smellie I think it’s a good idea, I just wouldn’t necessarily expect it to come up with clear answers. Everybody around that table is going to have a combination of their own beliefs about what the news media should be, deep commercial imperatives, some of which are pretty immediate and fairly searing in their implications for their businesses, and—I mean, you know me, Ruth. I’m a bit of a sceptic about “We’re here from the Government, we’re here to help.” It doesn’t have to be the Government that holds the conference, but there has to be some coherent outcome from it, which leads to some kind of public policy solution or attempt at a solution. I just really struggle with what that might look like, compared with some fairly simple things which could be done around ad revenue, levies, allowing big players that are in trouble to merge, and making sure that emerging players don’t get trampled by the elephants.

Bridges Thank you very much, Pattrick. We appreciate your contribution—very good. And we now move to iwi radio network, and I think we’ve got Peter with us. Kia ora, Peter.

Jones Kia ora. Tēnā koutou. Tēnā koe e Te Heamana. Tēnā koutou e ngā mema o te komiti. Otirā e mihi ana ahau ki ngā kaimātakitaki. [Hi. Hello. Thank you, Mr Chair. My greetings to the members of the committee. And I also acknowledge the viewers.]So just a little bit about Te Whakaruruhau o Ngā Reo Irirangi Māori, the iwi radio network. Our whakapapa is that we were formed in 1991, so we’re an organisation that’s very much committed to the revitalisation of Te Reo Māori and tikanga Māori, and, of course, we find our beginnings with the Waitangi Tribunal, and, of course, the outcome of the 1994 Privy Council case regarding the sale of State-owned broadcasting assets—and, of course, that had a far-reaching sort of outcome for Māori language and broadcasting. Now, there’s 21 iwi radio stations that serve, I guess, as a monument to the demonstrated courage of all those involved in the critical Māori rights recognition period, and each of those stations represent the collective Māori language interests of the hau kāinga, the hapū, the whānau, and the iwi that they belong to. So that’s a little bit about who we are.

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We are funded by Te Māngai Pāho, and I guess it’s important to talk about our reach and the content that we create at the moment. So we certainly reach into the hau kāinga communities, or the Māori communities that are in rural settings, our regions. We also have urban-based stations, and they have a wide and diverse type of audience. Iwi radio has an important role in dispelling fake news and, of course, conspiracy theory, which is fuelled by distrust. And one of the reasons why we can do this is because we have over 30 years of trusted relationships with Māori communities in a range of different iwi rohe. Iwi radio is that trusted voice, and reaches our hau kāinga that are traditionally, I guess, distrustful of mainstream media and the colonial systems and structures that mainstream media represents to those communities. Iwi radio is also a trusted, I guess, source of up-to-date information, and we do that in regional news, we do that in national news, we have a range of Māori language radio shows and English-language radio shows that are focused on kaupapa Māori perspectives, and that’s a really important part of the daily broadcasting of this essential service. And I just want to mention that iwi radio is very much an essential service in times of crisis like this. Our people are very much connected with the communities that they belong to. Iwi radio has been underfunded, in comparison to mainstream media, since its inception, so we very much understand what financial pressure is. We’re mindful that advertising is something that our stations have seen a decrease in, with some of the community advertisers from local businesses, of course, needing a holiday, and we’re mindful that the pressure that they’re under, of course, cannot be dismissed. We also have a Māori media company that focuses on advertising, and each of the stations is a shareholder of that advertising company, and it’s called the Māori Media Network. The Māori Media Network is focused on ensuring that COVID-19 communications, coronavirus information that needs to be broadcast on iwi radio is getting through to each station, and that’s a very important thing at this time, being mindful that our communities are, of course, noted and acknowledged as vulnerable communities in light of the COVID-19 crisis.

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Very early on, Te Whakaruruhau o Ngā Reo Irirangi Māori, we engaged with our funder, Te Māngai Pāho, and as a result of that, $30k was approved for each station, and that’s been to support them through the COVID-19 crisis. I think it’s important to mention that that $30k has been redirected from Te Māngai Pāho’s iwi radio innovation fund, so this, of course, has an impact on iwi media innovation in the future. And I think it’s important that iwi radio and Māori media are given consideration if there is going to be any media recovery package, or any media recovery support, particularly because redirecting funds—which is wonderful—it does sort of keep us a little bit behind in the innovation space as we move forward, and that’s just something for noting. I guess iwi radio provides information to areas that really have little or no connectivity. For city folk I guess this isn’t such a major issue, but for people that live in regional communities, Māori language - speaking communities that have little or no connectivity, their iwi radio provides them the news, radio shows, and the information they need to be up to date with what’s going on. Lately we’ve been working really closely with Māori Television, and this provides for the broadcast of the daily updates, and so that’s a multiplatform approach to keeping people up to date with all the information. I think it’s also important to note that iwi radio provides for diversity of voice among Māori, and this must continue—especially in a time of crisis. The 21 iwi radio stations provide that diversity of perspective, and, I guess, it’s really important to repackage information for the respective audiences so it’s digestible for audiences and they receive it in a way that they can trust. Supporting communities through this crisis from a taha wairua and hau kāinga perspective is very important. Iwi radio starts with karakia in the morning and karakia is our closing activity. That’s supported by kauhau and mihi, and I understand how important that is for our kuia and kaumātua, just acknowledging the spiritual perspective of Māori broadcasting for marae, hapū, whānau, and iwi.

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The network remains very connected to one another and is working closely with Māori Television, as I mentioned. That is also in our news reporting—providing access to Māori Television and to Te Karere content that will be helpful for their national news broadcasts. Yeah, I think that’s kind of a pretty overall update. The collaborations with Māori Television, of course, they draw on the strength of those natural relationships, and those natural relationships I think are things that we can sort of breathe more life into as we move forward. But in terms of supporting communities, it’s really important that we allow iwi radio to thrive as we move forward. Kia ora.

Bridges Kia ora. That’s fantastic, and we really appreciate what you and all those who work with you are doing to provide information and support at this difficult time. We’ve got quite a number of questions here, so let’s go to Paula Bennett.

Bennett Kia ora. I suppose I just wanted to equally just make that point of how grateful we would be for the information that must be getting to some really remote households and people that, without you, they wouldn’t be getting the kind of information, whether it’s because they haven’t got the television coverage or because—I think quite rightly, as you said, you’re a trusted source for a vital part of our community that can sometimes be quite vulnerable because of their isolation and, particularly at times like this, could feel a little bit disconnected if it wasn’t for what you were bringing to them in their homes, and in such a personal way as well. One thing I love about radio is that it’s a very personal connection that you can have with your announcers and things.Thinking about what the next few weeks looks like—and you’ve made the point, you know, don’t leave iwi radio behind, and I think we can all agree by listening here just how important that is. Is there another kind of message that you kind of see as—you’ve got a revenue source; how many people do you employ across the 21 networks?

Jones I think we employ about 250 people across the stations.Bennett Wow, that’s a lot. So are you feeling that their jobs are

secure and that that funding is secure enough that you can keep doing the level of work that you are? And I imagine that you work on the smell of an oily rag, as they say—that it’s a very thin operation. So just talk to us a little bit about your employees and how you see that funding model being able to keep them in jobs and keep that connectivity.

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Jones I think there’s an increased level of fact-checking that really needs to go into information that’s being put forward for broadcast, and that’s something that we’re really concentrating on at the moment. But likewise, we know that every station does run on the smell of an oily rag. $500,000 a year for an iwi radio station that runs 24 hours a day is a lot of volunteer work, but you get what you pay for, and so whilst we’re mindful that our remit is really to promote Te Reo Māori and tikanga Māori in the context of this crisis, it also includes providing a Māori perspective to the information that we are distributing not only to our iwi radio listeners in those remote communities but also our trusted followers online.So if we were to think about the size of our audience, we’ve really got a couple of audiences: one that are listeners and one that actually follow and access content from our digital platforms. So when we think about that digital capability, that needs to be grown. I think we really do need to rethink topping up that TMP innovation fund that was used to redirect resource over this time, and that $30,000 that each station has received has been helpful, but the increased responsibility associated with making sure that we are double-checking everything—because we have a very special role in terms of dispelling myth, and we note the fake news that is out there, we note what’s happening in our own communities, and we note the importance that our iwi, our whānau, our hapū, and the wider community place on dispelling those myths. So to answer your question, I think we need to reconsider how we reinject some resource into that fund.

Bennett Thank you.Davidson Kia ora, ngā mihi ki a koe Peter-Lucas, pai te kite i a koe.

[Hi, and thank you Peter-Lucas. It’s good to see you.]I wanted to specifically acknowledge the role that Māori media, iwi radio, and Māori Television, which I know you’re linked to, have played in the daily press gallery stand-ups as an example of your important role in all of the COVID-19 cover, and the fact that if you weren’t there, there would be nobody asking or talking about the Māori-specific communities and Māori-specific health-related questions that are coming through. And I wanted to acknowledge that incredibly vital, life-saving role, actually, in getting the information out to our communities in a way that non-Māori outlets aren’t able to do so.

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What else—and if you wanted to give examples, what do you think iwi radio, wider Māori media organisations have been adding to the coverage of COVID-19 for our people? You’ve talked to some of it already, but what more can we do to support that? And I also just wanted to finish by acknowledging—you talked about the trust issue and the colonial and historical context of Māori communities not always trusting especially Government sources and Government voices, and the double-checking of the facts and fake news that ends up on shoulders of Māori commentators. How can we support better? What else will be needed, particularly through COVID but into the far future as well?

Jones So two examples that I’d like to speak to is iwi radio are actively working with the community physically packing kaumātua kete āwhina—kete āwhina, or care packages. It’s really important when you’re in a rural community or a remote community that people that go to assist our kuia and kaumātua are actually known, and our iwi radio people are known and trusted. You can’t just rock up to somebody’s house and say, “I’ve got a kete āwhina for you.” You know, people want to know that there are the sanitisation practices, that strict health and safety protocols are being adhered to. Where is that kai coming from?So those sorts of things are what we speak to on iwi radio, because we need to raise the confidence of our people. Many of them are very mataku at the moment, and e tika ana kia mataku, e Marama [and it’s appropriate to be scared, Marama]. And so I think it’s really important that that’s something that’s ongoing. But also on the other side of that, I’m mindful that MBIE has a role in supporting the creation of science-based information, and when that science-based information is being created, I think it’s important that iwi radio is considered in the mix, particularly because we have a special audience. Our special audience needs information tailored for them in their communities, and that’s going to be important throughout this crisis and also on the other side. When we come out of it, we still need to think about the information that needs to be prepared for whānau, hapū, and iwi.When we think about what goes on in a whare—and some of our people live across whare; the bubble is intergenerational, that intergenerational lifestyle which is quite different to your ordinary Western lifestyle. And so Māori people that live in a bubble that includes a kuia

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and kaumātua, perhaps, in one house, and the whānau are in another house, in a papakāinga sitting—information around how best to live in that bubble through the duration of this crisis is important, and just maintaining that it’s not just the Western style of bubble that is actually in existence through this crisis. I hope that gives you a little bit of insight, Marama.

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Bridges Thank you very much.Allan Kia ora, Peter-Lucas. Tuatahi, māku e mihi paku ki a koe

mō tō whakautu ki tā mātou nei tono ki a koe i tēnei ata. Heoi he tino pukumahi, e hoa, mō tō tātou nei whānau, hapū, iwi. Heoi anō ka nui aku mihi ki a koe.[Firstly, I’d like to quickly acknowledge you for responding to our request to you this morning. You’re very busy, my friend, for the benefit of our families, subtribes and peoples. So I thank you very much.]Look, I think that you’ve probably provided a lot of insight that many people don’t know about the breadth of the service that your membership provides to so many of our whānau and our hapū. I think you’ve mentioned that there’s about 250 employees across 21 stations, and there’s something that struck me, listening to some of the other providers earlier today, around some of the difficulties that it can be to get content for or to geographically remote communities where you have clearly established really strong links up and down the country.I understand that iwi radio has shared content agreements with some providers, and I’m wondering in particular, as we’re looking to transition out and we’re looking at the overarching changing landscape in the media sphere at the moment, whether you think that there might be more potential for further partnerships, collaborations, between, whether it’s iwi radio or—and I think your particular radio station, you’ve also got a film, I think, don’t you, an online content or film component? I’m not sure. But do you think that there’s more opportunities for the role that iwi radio stations or just Māori media could provide to the broader mainstream media landscape?

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Jones Most certainly, and I think it’s important that we remind ourselves of the Treaty obligations and the purpose of outfits like NZ On Air, and that we consider the importance of that Treaty partnership when we talk about those collaborations. In terms of the existing arrangements, a lot of those are where iwi radio receives packaged content and we’re seen as a distribution point. But it’s really important that we are actually at the front end of that and in the middle and at the back end, not just used as a place to distribute messages out to our people because we are trusted as a source of information. I think we’ve got to be really mindful that we fact-check that information, that it is packaged for our respective communities, and the respective communities have a range of different issues. And so if we were able to be part of those conversations earlier rather than later, I think it would help the content creators to really speak to what the solutions are that each of those communities are looking for.And I say that because more recently, we have been receiving a lot of content from other outfits, or the option to access it, but likewise I think if we had more resource to create content that was tailored to these specific times, it would certainly help get information out, I guess improve behaviours, and also increase ngā hua e puta ana i ngā mahi—improve the outputs that we’re looking for across our communities.And we are very much entrenched in our communities. We’re kind of like the last bastion of regional media, iwi radio. We are the last bastion, and whilst we promote Te Reo Māori and tikanga Māori, we like to ensure that those messages that are getting put out through our platforms do have that Māori perspective, that they are repurposed, that they are repackaged and fit for our audience, which is something that we are not currently funded, really, to do, but our communities are going over and above, volunteering day and night, to make sure that we are doing the best that we can—which is why I say, when we talk about collaborations, we don’t try and separate the financial side of that, because, you know, time is money and we’re doing the best we can, but it is important for us to think about that moving forward.

Allan I’m cheekily asking the chair if I can have just one more, sir?

Bridges Oh, very good.

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Allan All right. Look, we’ve heard a lot of discussion this morning about the potential for a Bretton Woods - type conference or, you know, the big convergence of all the relative media organisations as they start to reshape what it might look like moving forward. Do you feel confident that iwi radio, Māori media, are sufficiently at the table to assist in the conversations to ensure that the role of Māori media is secure moving forward in a changing platform?

Jones I think there’s two sides to that question. In terms of the will, the will is certainly there. In terms of the resourcing, I think that it’s really important to consider how the Māori media world is resourced in comparison, and in context, to how the mainstream media world is resourced, and those are two different worlds. We are connected, but in terms of the public broadcasting environment, we kind of sit out over here. But at times like this, it’s really important that we do sit together, and moving forward I’m hoping that we will see a change in the way that the Māori media world is resourced.

Bridges Peter-Lucas, thank you so much. That’s a great way to finish our many presentations. We really appreciate your time and wish you a good rest of the lockdown.We’re now going to move to Gavin Ellis. Gavin, it’s been a tour of duty, but it shows you, I think, some of the breadth in the media landscape. What do you, sort of, make of what you’ve heard and the various perspectives?

Ellis Well, I think it does—and thank you, Mr Chairman—confirm that the crisis is a real one, that the cash flow crisis is the first element to be addressed. I was interested in that comment—I think it was Michael Anderson said, “We can’t see the bottom of the cliff and we need some certainty.” And I think one of the things the Government needs to do as a matter of great urgency—and I’m hoping that the Minister’s statement that he says is due later this week will provide some of that certainty around dealing with the real problems of cash flow. You heard some of the numbers that they talked about. No industry can sustain a drop in revenue of that dimension without it being catastrophic.

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I think that the discussion around sustainability versus plurality—I take the differences that are involved there and the reality that you can’t plurality if you don’t have an organisation to support it. But, none the less, I do think that the important thing is the realisation that there must be a balanced media—in other words, that we cannot have simply State-owned media, that we’ve got to have a viable—in whatever form it might take in the future—private sector counterbalance to State media.I think that it was interesting, the point made about the role of SMEs in advertising. It’s quite clear that the recovery of the economy—and that means, in this country, the resurgence of small and medium enterprises—that must happen apace if advertising is to return. I don’t need to reinforce, I think, the issues over the social media platforms. They are fixable. I take the point about copyright, and, in fact, I’ve raised this in other fora, that copyright is one way of bringing those social media platforms to heel, but there’s a lot more to it. It’s very complex—I recognise that.The role of local media, I think, was very well highlighted, particularly the role of community newspapers, and some of those, frankly, will not restart if the lockdown continues for a long period of time and we don’t see that recovery of local business. So it’s very much a binary situation. It’s not just the media; the resurgence of commerce goes hand in glove with that. I think that there seems to be a genuine desire to re-examine the entire ecosystem once we have got over the immediate and short-term problems. Those intermediate steps that we’ve talked about are really buying time, but we need to buy time. We can’t re-examine and recraft the ecosystem if there’s nothing left to recraft. So we’ve got to have in place those medium-term possibilities to buy media organisations—and it goes right across the board—the time to start thinking about the longer-term future.

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So I’ve personally found it a very enlightening session, and I hope the committee did too. I think that two take-outs for me was the very real and important role that media have played throughout this crisis and will continue to play—those front-line journalists are doing an extraordinary job—and secondly, their genuine desire to keep doing it. They’re two different things, because, long term, there’s a lot of issues that they need to resolve. Ultimately, it will be down to them—the Government and, I think, the Opposition too, because I think that we’ve got to have a whole-of-Government, and by that I mean whole-of-Parliament, approach to this if it’s to be enduring. But there’s a genuine desire there, I think, to pull through this.

Bridges Hey, thank you very much, Gavin. I quite agree with, actually, everything you say. I think—if I can paraphrase what you said at one point; I think it’s is a very important point—we sort of need it all, from the small to the large, and the public and the private, to have that vibrant polarity. So that’s really a well-made point. Now, we’ve got, I think, four questions here. Paul Goldsmith. Paul, did you just have your hand up?

Goldsmith Apologies. I had my hand up. I think he’s covered the [Inaudible] very well. Thank you very much.

Bridges Very good. Kiri Allan.Allan Sorry, I’ve done the same thing—apologies.Bridges Marama Davidson. Davidson [Inaudible] hand up. Kia ora anō, Gavin. I’m really trying

to get my head around how to break the social media hold that, actually, we all are bowing down to and reliant on in a lot of ways. And I heard it come through all of the media outlets, and I was wanting to ask each and every one of them this, but how do we break that social media hold? I know we’ve talked about copyright and those other sort of ideas, but I’m wondering—because non-profit and community voices also lean heavily on using Facebook and Google and Twitter and Instagram—is there a role for media, for our local, New Zealand - owned media? Is there some thinking about how can we appeal to our non-profits, to our NGOs, to be able to use those outlets more? It’s a real big, tough challenge, and I’ve been thinking—

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Ellis Sinead might kill me for saying this, but one of the things that, off the top of my head, could happen is that if Neighbourly, which I think is a fantastic local resource, become a whole-of-media resource—now, she will kill me for saying that. But I think that there are platforms that our own media can provide that we’ve seen, during the crisis, people do gravitate to. If we can make it a habit to go to those platforms, then we don’t need the corrosive sort of public media that we have. And remember, the one thing that we haven’t talked about—the one social media platform we haven’t talked about, which is potentially the most corrosive because it’s encrypted, is WhatsApp. Now, I see grave dangers in encrypted social media, and I think that we really do need to take hold of social media and put it in its place—not alone, which is why, in my submission, I mentioned both the European Union and the ACCC in Australia. The ACCC has lost patience with the social media platforms. It will move and it will move soon. Now, one of the things that we could certainly look at is a trans-Tasman approach, if the ACCC’s approach is one that we agree with. A trans-Tasman approach is an even stronger solution than one of our own. But, look, it is multifaceted, I acknowledge that, but step one: put Government advertising where it will do the most benefit to New Zealand, and that’s not on Facebook.

Davidson And just, yes, and personally, since 15 March, I’ve really had to hold my nose and don’t want to do any of my own advertising on Facebook. Will this approach—

Bridges [Inaudible]Davidson —sorry—does it rely on big-government support to help

us move away from these social media platforms?

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Ellis No. Private enterprise advertisers can do the same. Now, anecdotally, we hear that international advertising agencies are incentivised to put advertising on those social media platforms. Now, that means that it’s being done because it’s in the interests of the advertising agency to put it there, not necessarily the client. Now, I’m talking internationally here; I’m not talking about New Zealand. But we need to ensure that when advertising is placed anywhere, it’s for the benefit of the advertiser—in other words, for New Zealand business—and not for the benefit of somebody else. So I think that there’s a job for the media themselves to do. New Zealand media have not told their story well. What’s happening at the moment is a great story for them to tell about audience, and I think they need to now go on the offensive and say, “Look, don’t advertise on international platforms because we can get you a better bang for your buck.”

Lee Two very quick questions. Gavin, you’ve been in this business for a very long time. During your time in the media sector, in your opinion, has there been any other similar crunch point for the financial or editorial issues facing the media?

Ellis Yeah. I think it was the year 2000 or 2001, around the time of the digital bubble collapse, media found their cash flow dropped through the floor very quickly. In a matter of weeks, large amounts of advertising disappeared. It was a little bit, I think, the opposite to panic buying: they panicked out of the market. And we suffered huge cash flow problems at that stage, but we were in a far, far better financial position to weather it then—I’m talking, you know, 20 years ago—than media are now. They do not have the financial back-up to weather a storm; that’s gone. So cash flow is king.

Lee So 20 years down the track—just as a supplementary to my own question—there doesn’t seem to have been any lessons learnt in terms of how to cope with that whole digital space—the global competitors.

Ellis Look, it wasn’t caused by—that one wasn’t caused by the same issue. It was a different issue. It was more a business confidence issue than anything that digital media were doing. When I mentioned the dot-com collapse, that was a collapse of entrepreneur companies, not social media. So it really was a different ball game.

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Lee OK. So looking at some of the comments that were actually made, some of them have been actually really interesting. One thing that I found really interesting was how—I can’t remember who said it; I think it might have been Michael who said—instead of just looking for Government hand-outs, we need to help businesses, media businesses, actually help themselves. How do you go about doing that?

Ellis Well, I think there are a number of ways of doing that, not the least of which is taking that lead in where you put your money. The second one is, as I said, the media need to tell their own story better. They also need to, I think, ensure that they are—a bit like iwi radio—deeply connected with their audiences so that they’re meeting the audience’s need, rather than what might be perceived to be the audience’s need through analytics, clickbait. I think too much of our media is driven by audience analytics and not by what we used to call—the journalist’s belief of what the public needs rather than what the public wants.

Bridges Thank you. And final word to the member of Parliament for Epsom.

Seymour Thank you, Mr Chair, and thank you very much, Gavin. Look, I just want to challenge a little bit of what you’ve said. First of all, you start with this 5G idea that there are people accepting crazy theories. Now, I’m the only trained electrical engineer in Parliament and I can tell you that 5G is no different in terms of radiation from 4G or 3G. The theory is crazy.

Ellis I think I knew that.Seymour But the number of people who believe it is a tiny

minority, the same people who protested against the TPP, worried about vaccines—you know, they’re going to find a crazy cause whether there’s social media or not. The majority of New Zealanders are sensible people who just want faster internet. And so I don’t know that we need to be as paternalistic as you suggest because there’s some people with crazy theories.

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Related to that, we’ve now had at least three chief executives of major media organisations come and try to tell us that we don’t need to advertise on Facebook or Google to reach everybody. Well, if that’s true, why have their key account managers not made that case to people purchasing advertising already? And I just worry that, you know, there’s too much paternalism here. The fact is people can make up their own mind—they will choose—and, ultimately, we’re going to have to be competitive in our mind-set rather than just saying that the fact people choose to look at advertising and get information off social media platforms is a bad thing. So, it’s not really a question; more of a challenge. I think that—

Ellis Well, let me answer the challenge, because I think that you miss out one key ingredient. What other industry is allowed to steal the product of another industry’s endeavour and pay nothing for it and, at the same time, steal their livelihood through advertising? Because that’s what social media does. They pay absolutely nothing for the product that is the lifeblood of their operation—and that is the news content made and paid for by news media organisations. Now, I know of no other industry where you can steal something and not only get paid for it through advertising, but get the Government’s backing for it as well.

Seymour Well, I guess part of the difficulty—Bridges There’s—Seymour Mr Chair, this’ll be real quick, I promise.Bridges I don’t think you two are going to resolve this, somehow.Seymour I was just getting going.Ellis I’ll have to meet you in Newmarket.Bridges I was going to say put it on Facebook, but that doesn’t

feel appropriate. Gavin, I want to thank you so much for your time and your deep experience in this topic. It’s been a very, I think, significant discussion, and I hope it assists in the public discussion, the Government’s discussion, in finding some solutions for the media sector, which is—I think we all agree—so important in telling our stories. We’re now going to end this public hearing. I want to thank the media participants who are still online and say goodbye to you all. The members of Parliament will stay just very briefly to sort out one or two matters of process. Thanks so much.

conclusion of evidence

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Members - home page - New Zealand Parliament · Web view4/15/2020 · only way they get their little local community news is from their local community paper. LeeI know that your