NZ paywalls coming - new media report

A new report has warned about challenges facing pay TV operators around the world and forecast the rise of paywalls for NZ news websites. Photo /  Dean Purcell
A new report has warned about challenges facing pay TV operators around the world and forecast the rise of paywalls for NZ news websites. Photo / Dean Purcell

The New Zealand outlook in a global study of the media and entertainment industry has forecast the rise of the paywall and paying for online news content will become the new norm.

The PwC 2013 Global Media and Entertainment outlook issued today says newspaper publishers are following global trends seen in mature markets by building digital paywalls.

PwC Partner and Technology industry specialist Paul Brabin said today the online space was starting to be a profitable channel, and would become the second biggest medium for advertising - after TV - by 2015.

The report predicts total newspaper publishing revenues will decline at an average annual rate of 5 per cent with digital advertising revenues rising 3.8 per cent.

Print media are at the coal-face of the consumer move to digital media.

But PwC has warned about change facing pay television globally, a sector dominated in this country by Sky TV, which is facing new competition from the advent of ultrafast broadband.

More viewers were shifting from "linear pay TV services" to taking content from the internet at a lower cost.

Brabin said New Zealand's entertainment and media businesses were figuring out how to further engage their audiences online.

The outlook predicts the total entertainment and media industry in New Zealand will grow a respectable average annual rate of 3.5 per cent until 2017, increasing from $5.7 billion in 2012 to a predicted $6.8 billion in 2017.

Winners include the internet advertising industry and providers along with the TV and video game markets. Our magazine, film, radio and music industries are holding ground, while the newspaper industry was showing signs of better understanding how to monetise digital content, said Brabin.

Consumers were moving to creating their own media entertainment packages.

The move to 'my media' can be seen in 'cord-cutting' where consumers abandon pay TV subscriptions and instead get content via cheaper, internet-based services,the PWC report found.

TV subscriptions were tipped to rise by an average of 7.2 per cent over the five years from 2013 to 2017 from $722 million to $934 million, but it was likely the revenue will be spread wider.

Up to now Sky TV has been largely unaffected by the shift to online entertainment, which has been slow to develop in New Zealand.

Media reports suggest a Commerce Commission probe into Sky's contracts with potential online competitors has found problems with restrictions on content buyers from buying content from companies other than Sky.

But Sky chief executive John Fellet rejected a suggestion that it had been renegotiating contracts with the expectation that the Commission would reject the way its contracts affect competition.

The New Zealand media landscape:

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