2016: The year of disruption for media

Another year is over in the media revolution. A new one begins today.

Change for media companies reached breakneck pace in 2015 and it will likely speed up, not slow down.

Mobile phones are taking over as the biggest way to access the internet, linear free to air television is under pressure.

Mega-companies like Google, Facebook with unique access to consumer databases are morphing into media firms that operate on a global scale and that eat into local advertising markets.

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I am predicting that 2016 will be an even bigger year for corporates as they adjust to the new ways in which people consume media.

NZME's big move

NZME chief executive Jane Hastings has led a convergence of the media company - including the NZ Herald and The Radio Network - into a single newsroom encompassing print, radio and digital operations. Signifying the new digital future is the creation of a new online video arm, called WatchMe.co.nz.

The new video website, which includes content from the Late Night Big Breakfast comedy team - were given taxpayer funding from NZ On Air.

TVNZ's meets demand

TVNZ chief executive Kevin Kenrick can take pride in TVNZ's well honed and efficient on-demand service. In my opinion it is the future for TVNZ and free-to-air television as viewers move away from linear TV, but it badly needs to draw more advertising revenue.

Kenrick has taken what was in my opinion a formerly dysfunctional and conflict ridden company out of the headlines while growing its share of the TV advertising market.

In my view the downside is that TV One and TV2 have become somewhat dull and risk averse in their programming. One could argue that financial sustainability balances out any loss of profile. But I think it's a risky strategy as new international players start producing online video content for the New Zealand market. But there is another factor to TVNZ's success in 2015, and its prospects for 2016. It is partly due to TV3's failures last year.

TV3's retreat

TV3 has played a big cultural role, which in my opinion has now diminished.

Guided by the television production expertise of Julie Christie, chief executive Mark Weldon and the MediaWorks board made a valid judgment to boost profits by dropping expensive US shows, and focusing on local content, especially reality shows.

Some have delivered enough viewers. But there were too many ratings slides last year. 3News, the 6pm news show, needs work.

I believe it would be wrong to say TV3 was in bad shape when new owners took over in 2014. TV3 suffered from a lack of development for its digital arm, and that has improved.
In my opinion the biggest failure has been in abandoning its likeable brand, alienating loyal staff and losing key business talent.

In my opinion the board was over-confident about its place in the industry, and its right to taxpayer funding, highlighted by the failure to win $5 million of annual funding for a new soap opera.

TV3 faces big challenges to reassert its place in prime time TV.

The radio arm continues to be a financial saviour, with the morning RadioLive/TV3 Paul Henry show slowly becoming established and commercial, and Dom Harvey of The Edge has taken on the role of shock jock.

Sky's darkened outlook

Sky TV's John Fellet has been a favourite of sharemarket analysts, partly for his straight shooter style, but also because he maintained market dominance, profits and dividends and was wary of spending up on new technologies.

Back in October last year, a guidance for a 11 per cent profit fall in 2016 led to the company's share price falling 12 per cent in one fell swoop to $4.68. The stock closed at $4.59 yesterday.

Board chairman Peter Macourt said in October that the company had delivered new digital media before it had a critical mass of subscribers.

The company's offerings include its subscriber video on demand service Neon.

Furthermore in 2016 new hire prices for Sanzar Rugby rights and higher programming costs would kick in, due to the arrival of new competitors.

So in my view it looks like a tough road ahead.

Did Sky TV wait too long to deal to new competition from Netflix?

And can the technology conscious board move fast enough to undermine the likes of Netflix and Spark's Lightbox.

I like aspects of the Sky TV service - which is provided to me free by Sky to balance out SVOD services Netflix and Lightbox. But in my opinion with Netflix and Lightbox charging less than $15, a premium offering should cost $40 a month, not $90 and more.

Radio NZ's digital push

Radio New Zealand chief executive Paul Thompson has trumpeted dramatic growth in the audience for its digital services, but in my opinion it must not undermine traditional live radio audience.

Change has come in the form of the new head of content Carol Hirschfield, and her hiring John Campbell to take over Checkpoint.

Another high profile Maori TV broadcaster, Mihi Forbes, has also joined RNZ National.
But insiders told me there were tensions between the emptying Wellington office and the growing Auckland studio.

Back in August when Campbell was appointed, I worried his larger than life personality would eclipse the rest of the worthy output of RNZ news and current affairs, and that it would become all about him. But Thompson says that will not be the case.