Last week, the boss of a major Australian media company floated a bold idea that could change the face of television in New Zealand.
Speaking to his staff, recently appointed Seven West Media chief executive James Warburton made off-the-cuff comments suggesting the company could start running some of its content on this side of the ditch through a deal with a local free-to-air TV company.
A source who attended the staff meeting told the Herald the comments related to New Zealand were only a small part of a much bigger speech intended to inspire staff to look beyond cost-cutting and think of more innovative ways to grow revenue.
The source said the idea would essentially involve plugging shows already owned in the Australian market into New Zealand.
When the news first trickled across to the Herald newsroom, it was thought this implied Seven West was planning to launch a TV channel in this market – which seemed a strange move given the struggles facing free-to-air TV.
The Herald now understands, however, that the hypothetical move could instead involve Seven striking a deal with an organisation like MediaWorks to run shows already owned in the Australian market on this side of the ditch.
According to the source, the media boss said the programmes now running in New Zealand could be replaced by Seven-owned shows over a number of years, but with a local news programme in the evenings.
The Herald approached Seven for comment, but the company would not elaborate further on the comments made by the chief executive. And similarly, MediaWorks did not want to comment on the speculation.
The Herald understands the idea is still very much in an embryonic stage and that Seven has not yet crunched the numbers on whether it would work.
Exclusive: Can this man make Kiwis love Facebook again?
Damien Venuto: Should every Kiwi ad agency employ a psychologist?
Another major question hanging over a move like this is whether local audience numbers could be maintained at high enough levels to keep advertisers interested.
Somewhat ironically, the best argument in favour of this idea working comes from the very thing that poses the biggest threat to the local TV market: international streaming giants.
The widespread adoption of services like Netflix shows New Zealanders aren't averse to watching international content – as long as it's good, they're willing to give it a shot.
There could certainly be some strong commercial incentives for the media companies to at least investigate employing this approach. It would allow MediaWorks to remove many of the operational and managerial costs on this side, while Seven would gain incremental revenue from content that already exists.
The flip side is that it could lead to the loss of the local programming that gives New Zealand media a distinctly local voice. This content might be important, but it's also expensive to make – and because it's often original, it comes with the risk that no one will watch it.
A loss of this nature would be particularly felt on the comedy side, where MediaWorks has done a sterling job of giving young New Zealand talent a platform to be heard. The same could also be said of light-hearted current affairs show The Project. Seeing this slowly squeezed out for commercial reasons would be hard for New Zealanders to stomach, but the television market isn't getting any easier for media companies.
It is, of course, possible that nothing will ever come of the comments made by the Australian television boss, but perhaps this type of speculation is the exact incentive the Government needs to reconsider the way it invests in local media. It's a reminder that New Zealand's media companies no longer have the luxury of time when it comes to making big decisions.
MediaWorks boss Michael Anderson has been warning since July last year that if media policies in New Zealand did not change, the company might have to pull out of broadcast TV.
In a three-page letter sent to a Ministerial Advisory Group last year, Anderson warned that the structural anomalies in the local media market could lead to the Government, through TVNZ, becoming the only broadcaster in New Zealand.
These concerns were reiterated this year in more colourful language by MediaWorks news boss Hal Crawford.
In a strongly worded op-ed, Crawford stressed how difficult it was for a commercial television company to compete with TVNZ.
"They can do whatever they like to not make a buck. They will never fold, because they are 100 per cent state-owned," Crawford wrote.
"Being one of their competitors, I'm angry about this. I'm angry that the market for television advertising in New Zealand is distorted by this bizarre, anti-competitive set up."
Last month, Prime Minister Jacinda Ardern told Newstalk ZB she was worried about the state of media and the Government would announce something this term. She did not, however, provide any details on what this might entail.
There has been speculation about TVNZ – or at least one of its channels - being de-commercialised and committed to telling local stories. This would be in line with the approach used in the UK through the BBC and Australia through the ABC.
Ardern has openly expressed her view that New Zealand still has a role for public broadcasting, particularly at a time when local TV companies face shrinking resources. The question is whether the Government is willing to fork out the extra money to finance it as it once did – and whether it would be willing to do it sooner rather than later.
Media bosses coy on Stuff-NZME merger revival
Michael Boggs, chief executive of Herald publisher NZME, would not comment on whether the media company would revive its interest in merging with competitor Stuff.
A report from investment house Jarden this week suggested that Stuff's steeply falling profit and the failure of its new Australian owner to find a buyer for its New Zealand assets strengthened the case for reviving a merger with NZME - an idea that has been rejected by the Commerce Commission.
Asked whether NZME was considering giving it another a shot, a spokesman said it was against company policy to comment on speculation of this nature.
The Herald also sought comment from Stuff boss Sinead Boucher.
While the media bosses wouldn't respond to the speculation directly, Boggs did touch on the topic of consolidation in an address to the Telecommunication Users Association last month.
"No one really knows exactly what the media landscape will look like in the future, but I think there are some absolute certainties: there will be consolidation in our market," he said.
"The size of the advertising is simply not growing, it's just being sliced in more and more ways. NZME will keep innovating and creating new and better ways for advertisers to reach their audiences but there will be consolidation."