Daily deals site Cudo may shut up shop in NZ

Carly Flynn (above) fronted Cudo New Zealand, a joint venture between MediaWorks, Microsoft and the Australian firm NineMSN. Photo / Norrie Montgomery

Adland is in flux with MediaWorks looking at pulling the plug on its daily deal website Cudo as TVNZ considers turning TVNZ7 into an advertising agency's shopping channel.

Nine months after Cudo New Zealand's launch, MediaWorks and its partners in the transtasman joint venture say the market is more competitive than they thought and have let most of the staff go.

Cudo New Zealand was fronted by Carly Flynn, who previously co-hosted the discontinued TV3 breakfast show Sunrise.

MediaWorks interactive general manager Siobhan McKenna would not rule out closure and said she was keeping a watching brief on the market.

Some services are being provided by Cudo out of Australia. Daily deal websites buy in bulk and sell on special deals with large discounts. Globally they have been a marketing phenomenon for media companies in turbulent times.

McKenna said there was some "consolidation in the market".

Asked if there were plans for Cudo to shut up shop in New Zealand, she said: "I would not say there are no plans - anything is possible. It is here today and will be tomorrow.

"It's in a place where we accept it is a much more competitive market than we would have hoped.

"We planned on being the second entrant into the market behind GrabOne but four sites launched within a couple of weeks."

Merchants selling on the website had been able to secure better deals.

Cudo in New Zealand is a joint venture between MediaWorks, Microsoft and the Australian firm NineMSN, which runs the successful Cudo site across the Tasman.

The daily deal market here is dominated by GrabOne, 75 per cent owned by Herald publisher APN News & Media and 25 per cent by entrepreneur Shane Bradley.

GrabOne has around 70 per cent market share, with Trade Me's Treat Me about 12 per cent.

Meanwhile, TVNZ is closing public service channel TVNZ7 next June and looking at proposals from ad agency Ogilvy to lease the frequency for a shopping channel.

TVNZ7 has government funding until June next year, but Ogilvy has talked to TVNZ about taking it over.

Ogilvy has a base of retailer clients and its own professional TV studios where it films the Briscoes TV commercials.

Placement on the shopping channel would be sold to several retailers, not just Ogilvy clients.

TVNZ is refusing to discuss its plans for TVNZ7 apart from saying it "intends" for it to be used for free TV.

It is understood one of the issues facing TVNZ after the end of taxpayer funding is whether it would earn more leasing it out.

Alternatively, the TVNZ7 frequency could be used for a pay TV channel on the new Igloo digital terrestrial network, a joint venture between TVNZ and Sky TV.

Under the terms of the deal with the Ministry of Economic Development, the frequency is free to lease until after the switch-off for analogue signals from 2012-2014.

After that TVNZ will have to pay a market rate.