Covid 19 coronavirus: Government unveils $50m support package for media

Broadcasting minister Kris Faafoi has announced a suite of initiatives aimed at helping media. Photo / Mark Mitchell.

The Government has unveiled a $50 million package to help the media industry which has seen advertising revenues plummet due to the coronavirus pandemic.

The package includes $21.1m to completely cut the cost of transmission fees for the next six months as well as $16.5m to cut the contribution to NZ on Air screen content by 80 per cent and a $1.3m allocation for government departments to purchase news subscriptions.

Broadcasting minister Kris Faafoi said the package was about freeing up cash in the short term to help the industry get through the immediate crisis.

At a press conference, Faafoi said without Government intervention, there was a risk of losing the plurality of voices in the media that were so important at times like these.

He said the package was for immediate relief, and that was why it appeared weighted towards broadcast media rather than the print and digital media industry.

He said any perception that the Government was happy to support TVNZ and RNZ but not other media companies was "wrong".

There was an urgency to help all media platforms, he said, and part of a $11.1m targeted assistance package could go towards print and digital media.

He would not comment on a potential NZME-Stuff merger.

Asked if the Government seemed prepared to let media companies fail, Faafoi said he would not be drawn into hypotheticals, but the short-term aim was about cash injections to ensure the plurality of voices in order to buy time to prepare for a second tranche.

The TVNZ-RNZ merger was now "on ice", he said.

"It doesn't necessarily mean it's dead. There are wider issues for us to contend with at the moment."

Issues of long-term viability already existed in the industry before the Covid crisis, he said, but they had been exacerbated by the loss in advertising due to the global pandemic.

The decision of some companies to cut jobs to stay afloat were out of the Government's hands, Faafoi said.

He said today's announcement was the first tranche, worth $50m, and there would be a second tranche looking at longer term viability.

He said the Government's second tranche will also consider the model in Australia, where Google and Facebook will have to pay for the news content on their platforms.

"We're trying to do as much as we can in the short-term to give us some time to have the wider discussions."

Details of how media can access today's support package were being worked out, Faafoi said.

He said the second tranche of work would look at whether Government advertising should be moved from global giants like Google and Facebook to local media.

He could not say if that would happen, saying only it would be part of the second tranche discussion.

Moving that advertising spending away from Google and Facebook was a frequent wish from media companies who appeared before the Epidemic Response Committee last week.

He said moving Government advertising spend from Google and Facebook to local media companies took time, and those conversations were still yet to begin.

He said Government advertising spend is about $110m for the 2018/19 year, and about 30 per cent of that was to online platforms, with the rest going to television, radio and print.

That meant roughly $33m a year of the Government's advertising spend was going to the likes of Google and Facebook.

He said every media company was in a different position, and some of the $11.1m fund could be used to bring forward future spending from Government advertising.

The media landscape in the future will be different, he said, and how it would look depended on each company's business models.

Faafoi, a former press gallery journalist, said journalism was an important part of democracy.

"The function of journalism in this country is extremely important. We are a small country. We might think we're doing a great job, but being asked questions about what we're doing is extremely important."

He said the bosses of media companies welcomed the package this morning, but the industry was clearly facing ongoing challenges.

NZME CEO Michael Boggs welcomed the Government's announcement, saying the package would help support and sustain journalism and broadcasting in New Zealand.

NZME would work through the details with Government officials in coming days.

"We are grateful the Government has recognised the importance of the media industry," Boggs said.

"Our role has never been more critical in providing New Zealanders with accurate, trustworthy and up-to-date news and information.

"That's highlighted by the millions of Kiwis turning to the NZ Herald, Newstalk ZB and our other news platforms and newspapers every day.

"The revenue challenges we currently face have been well documented - we're looking forward to working with the Government on the package announced today, as well as longer term initiatives to ensure the New Zealand media industry is healthy and vibrant."

In a press statement, Faafoi said the proposals in the package were generated by the industry themselves in a recent series of workshops to identify means of delivering immediate support to the sector.

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

"By cancelling transmission fees we are freeing up cash the media companies can use to help them in the short term. This is in addition to the wage subsidy and other tax measures."

Faafoi said the initiatives were the first stage of support for the sector which was only the third to receive a specific pool of funding alongside primary health care and aviation.

Last week MPs were told the government needed to step in immediately to help the sector which was facing an "existential crisis."

Academic and former Herald editor Gavin Ellis told the Epidemic Response Committee the advertising revenue for media companies was estimated to drop between 50 and 75 per cent, and there was concern that it would not return even after the Covid crisis was over.

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"No medium is exempt from that," he told the committee.

"I'm fearful 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."

MediaWorks earlier this month asked its staff to take a 15 per cent pay cut, while Radio Sport and all Bauer's New Zealand magazine titles - including The Listener and North and South - have closed.

Bauer's closure also meant the loss of more than 200 jobs - though Ardern has noted that Bauer had refused to take the Government's wage subsidy.

Last week NZME, which owns the Herald and Newstalk ZB, announced it was making 200 positions redundant and asking higher-paid staff to take a 15 per cent pay cut for 12 weeks.

Today Faafoi said the support package reflected the essential role media play at this time in delivering access to reliable and up to date news coverage and keeping New Zealanders connected while in lockdown.

"There is evidence New Zealanders are turning to trusted news sources in record numbers at this time so it is critical the media is supported to keep doing the great job they have been doing.

"We will continue to work with media organisations to make sure assistance is targeted and appropriate.

The second package of support was being developed and would be submitted for the Covid-19 budget discussions in May, Faafoi said.