Damien Venuto: RNZ-TVNZ merger and the problem with Willie Jackson's comments

Broadcasting Minister Willie Jackson has never been one to veer away from confrontation. Photo / NZME

OPINION:

Broadcasting Minister Willie Jackson is falling into the trap that so often derails merger attempts.

This week, he didn't mince his words, telling a select committee that TVNZ rather than RNZ would need to change amid the proposed merger.

"This is going to require a change of culture, particularly from TVNZ, not so much RNZ because I think they get the model," he said.

"We've had a couple of meeting with them [TVNZ], and I think they want the best of both worlds at the moment. We need them to change their attitude. We need them to understand what we want, which is a cultural change."

The problem with this language is that it creates a hero-villain dichotomy. You have RNZ placed on a pedestal as the role model while TVNZ management is publicly chastised for not being in line with what the Government wants.

That message would have been heard loud and clear not only by TVNZ management but also by the staff working hard within that organisation.

These comments have laid bare what, in my view, is tension between TVNZ management and the Government.

We already saw hints of this in recent weeks when TVNZ chief executive Simon Power criticised the Government's merger legislation as poorly drafted.

Labour supporters might be quick to point out that this criticism isn't all that surprising given it comes from a former National MP.

But this merger isn't going to be helped by feuds between Government ministers and the boss of New Zealand's state-funded television broadcaster.

It also won't be helped by further entrenching the divisions that already look like the local media embodiment of Ryan Gosling and Steve Carrell walking alongside each other.

RNZ and TVNZ walking into the future together. Photo / Twitter

If anything, this all plays into the same mistakes that so often derail company merger attempts.

The Harvard Business Review puts the failure rate of mergers somewhere between 70 per cent and 90 per cent. Those are the odds we are staking the future of media in the country on.

Yes, you could argue that this merger is different in that it doesn't involve a company acquisition and instead requires the amalgamation of two entities already owned by the state.

But this overlooks one of the critical reasons that mergers often fail.

The RNZ-TVNZ merger remains contentious. Photo / NZME

A 2003 research paper titled 'Cultural Conflict and Merger Failure: An Experimental Approach' published in Management Science found that cultural conflict is a major contributing factor when it comes to mergers failing.

The researchers said that organisational memory persists after the merger has been completed, leading to a culture of blaming between staff members from the previously disparate entities.

"Employees of the acquired firm blamed the new employee, and new employees blamed the managers, for poor postmerger performance," the researchers said in their conclusion.

The researchers found that performance actually decreased once the two entities were merged together and that people end up blaming each other for the drop in performance.

The point here is that the differences between the two firms and creating a right-wrong culture defined by what one organisation did will only exacerbate the risk of cultural conflict.

As the researchers say in their paper: "Perhaps the only players who are uniformly happy are investment bankers, who get paid for putting deals together and get paid again for undoing them. Curiously, widespread merger failure is at odds with the public and media perception that mergers are grand things that are almost sure to create enormous business synergies that are good for employees, stockholders, and consumers."

Of course, there are no investment bankers involved in this case, but the consultants will not be complaining about their role in advising the Government on bringing this merger into fruition.

The major encumbrance to this merger at this stage is that no one from the Government has yet explained how this new model will work to rectify the steady decline of engagement with New Zealand-owned media – particularly among younger New Zealanders.

The NZ On Air 'Where are the Audiences' report from last year showed that TV and radio now reach only one-third of 15- to 39-year-olds on an average day – down from more than 60 per cent in only five years.

To put this into further context, in a 2020 study conducted by Colmar Brunton, YouTube reached 51 per cent of children under 14 while TVNZ 1 only hit 16 per cent.

Off the back of this report, the Broadcasting Standards Authority expressed concern that this shift in media consumption directly impacted the sense of identity and belonging of Kiwi kids - a trend reflected in the fact that nearly two-thirds of children don't have a favourite NZ-made show.

The challenge here is fragmentation. It's the question of how New Zealand content can compete and co-exist in a world dominated by the likes of Netflix, Hulu and Disney.

The days of New Zealand media being protected by the shelter of limited broadcast are well and truly over – and will never return.

At the Mood of the Boardroom event on Friday, Finance Minister Grant Robertson defended the merger, saying that in the age of disinformation we need a strong and independent public broadcaster.

That statement is true, but you also need people to engage with it for it to serve its purpose.

And no Government Minister has convincingly explained how merging together two legacy media entities is going to stop the exodus of viewers to international content.

Investing more money in worthy content that better reflects the New Zealand identity is only part of the challenge. The bigger challenge by far is ensuring that viewers watch those local shows instead of Stranger Things or the latest viral dance on TikTok.

If something as entrenched as Shortland Street is battling to hold on to an audience, then you know this is no easy task.

The challenge for Minister Jackson in the coming months will be explaining to a sceptical New Zealand public – and the staff at RNZ and TVNZ – that this merger will do anything to bring audiences back to local content.

Jackson is in for a bumpy ride. And wagging his finger at one of the passengers forced to tag along for the ride won't help get him to his destination. He needs to keep his eyes on the road and tell the rest of us where he thinks he's going.