MediaWorks remained in the red for the 2018 financial year, posting a loss of $5.5 million for the period ended 31 December 2018.
This was on par with the 2017 result when the company lost $5.7m and remained a significant improvement on 2016 when losses sat at $14.8 million.
"We're not happy to be in loss, but we're happy with the journey in eliminating that loss," says MediaWorks chief executive Michael Anderson.
"2018, it was a very difficult market that stopped us from being able to get there. Having said that, the market is part of the equation and our job is to mitigate whatever happens in the market. But understanding that our underlying performance is strong, the key to us is to continue to improve that."
MediaWorks, which owns a wide spread of television and radio properties, including TV station Three and popular radio brands The Edge and The Rock, makes most of its money through the sale of advertising.
Overall revenue for the business came in at $305m, up around $5m on the previous year. The lion's share of this came from the radio side of the business, which contributed $153.8m to TV's $133.7m.
The good news for MediaWorks here is that the TV arm of the business – long considered by analysts as the problem child – saw its revenue grow by over $4 million from the previous year. However, these gains were wiped out by a $5.5m slide in radio revenue.
"The improvement in TV has been critical because TV really was the business that was struggling enormously three years ago," says Anderson.
"That level of improvement is important because it comes at a time when the TV market is in decline and fragmented. And it comes against a competitor who's really the major player in the market place."
The latest annual report from the Advertising Standards Authority showed that overall TV ad revenue in New Zealand dropped $10 million to $566 million in 2018.
With media consumption habits continuing to shift toward online services, the challenges for the TV industry are only set to increase in the coming years.
Worryingly, the overall decline in traditional media channels is not being balanced by gains in digital revenue.
The MediaWorks result sheds light on the fact that digital growth remains slow for New Zealand media companies.
Between 2016 and 2018, digital revenue for MediaWorks only rose a measly $3.4m.
Anderson concedes that this is largely because the vast majority of digital revenue is going straight to Facebook and Google.
He says that mainstream media companies were caught out because while the overall pie in digital looks big, it's largely dominated by Google's search advertising.
"We have to recognise that the elephant in the room is Google."
Asked about last week's media reports on a shake-up in the newsroom at Newshub, Anderson confirmed changes were proposed but that there weren't many roles affected.
"It's not a cost-out exercise," Anderson says.
"We're stressing that internally and it stands true in all the facts."
He says the changes largely affect a few executive roles, including a proposal not to replace the position of head of broadcast news previously held by Richard Sutherland, who defected to RNZ.
Questioned on speculation regarding the position of long-time senior staffer Melanie Jones, who previously served as head of news and sport at RadioLive (now Magic Talk) and more recently as head of TV News, Anderson would not comment further.
At the end of last year, MediaWorks announced a merger with outdoor media company QMS, but it did not appear in this round of results.
"We expect the deal should be finalised in the next couple of months," Anderson says.
As part of that agreement, QMS will receive a A$35 million (NZ$36 million) payment, subject to final adjustments in their financing agreement, and 40 per cent of the merged entity.
Dubbed a quad-play in early media reports, the introduction of QMS will give MediaWorks an important fourth revenue generator.
"It creates a significant point of difference for us in the marketplace," Anderson says.
"It enables us to be part of pretty well every conversation going on when it comes to a brief for a marketing or advertising campaign. It means that if we're there, we have a chance to influence how that brief is satisfied."
The outdoor advertising industry has been one of the major winners in the digital age, growing rapidly as billboard and bus stop sites have been digitised. To put this into perspective, the money spent on outdoor advertising has inflated annually from $67m in 2012 to $143m in 2018.
The growth has slowed down in recent years, but outdoor advertising continues to have a bright future on account of the fact that it cannot be easily avoided.
On the topic of mergers, MediaWorks has also been mooted as a potential buyer for Stuff, which remains on the market.
Anderson was quick to snuff out this speculation, saying that MediaWorks was "not looking into those assets".
He said his focus is strictly on getting the QMS deal across the line and integrating the business into MediaWorks.
No paywall plans
With NZME launching a paywall and TVNZ mulling a paid subscription model for its on-demand offering, local media companies are looking to shore up their digital revenue by having users pay for their content.
Asked whether MediaWorks was eyeing a similar move, particularly in regard to its ThreeNow offering, Anderson said it wasn't part of his strategy at this point.
He did, however, leave the door slightly ajar, saying that they "will continue to look at everything" at that may help to boost the revenue of the business.