On a sunny Friday afternoon in early October, Google dropped a bombshell on the New Zealand media industry. It warned that if the Fair Digital News Bargaining Bill passed, imposing a “link tax” on news articles shared on Google, the platform would respond by dropping New Zealand news content from Google’s products – including search. It would also discontinue its commercial agreements with local media companies.
2024 started with The New Yorker magazine running an article which asked: “Is the media prepared for an extinction-level event?” Accompanying art showed media-branded dinosaurs in the path of a flaming meteor. It argued the advertising revenue that sustained the industry was vanishing, social media traffic that drove clicks and subscriptions was falling away and reader trust was declining.
This proved a grim prophecy across much of New Zealand’s media landscape. Ad revenue collapsed; there were rolling mauls of redundancies. In April, TVNZ and Warner Bros Discovery announced mass layoffs across their news divisions. NewsHub was axed, replaced with Three News, a pared-back collaboration between TV3 and Stuff. TVNZ cancelled Fair Go, its noon and late-night news shows, and Sunday, the country’s last remaining investigative current affairs show.
In August, state-owned TVNZ posted an $85 million loss and $39m drop in advertising earnings. Whakaata Māori (Māori TV), also state-funded, is shedding 27 jobs after a budget reduction of $10m over two years. NZME, owner of the NZ Herald and a stable of radio stations, plans to close up to 14 community newspapers, and long-running current affairs magazine North & South has ceased publishing while it attempts to develop its digital presence.
The shutdowns and layoffs follow years of steady decline. The Spinoff writer Madeleine Holden recently looked at census data and surveyed newsrooms to estimate there were 4000 journalism jobs in the country in 2006; today, there are fewer than 1600.
We’re living through the twilight of New Zealand journalism as we know it. The Fair Digital News Bargaining Bill was supposed to be the last-gasp chance to keep the industry alive. In November, the bill was set to have its second reading in Parliament, but it was quietly taken off the order sheet. Media and Communications Minister Paul Goldsmith confirmed the bill was “on pause”, telling NewstalkZB, “The broader issue of how you corral one of the biggest companies in the world and have a conversation around how that works – it’s not straightforward.”
The same week the NewsHub and TVNZ closures were announced, AUT released its annual “Trust in News in Aotearoa New Zealand” survey, which showed that over the past four years, the public’s trust in New Zealand media had fallen fastest among 46 countries surveyed (it’s part of a global survey backed by the Reuters Institute). There’s some criticism within the industry about the study’s methodology, but in September, StatsNZ released data from its 2023 general studies survey showing a steady decline in media trust over the past decade. Brutally, the public trusts the media even less than Parliament.
The rise of FAANG
What’s gone wrong? Go into a library and look through newspapers from the 1950s to early 2000s and you’ll find the news was accompanied by dozens of pages of classified ads: people advertising everything from jobs to houses, furniture and sex. You’d also find an abundance of ads for local businesses: restaurants, theatres, clothing stores, car yards, jewellers – nearly everything that could be sold. Newspapers hoovered up much of the advertising within their circulation area and used the revenue to fund journalism.
If you turned on the television at 6pm in 1984, you watched the news on TV One because there was nothing else to watch, except endless reruns of M*A*S*H. There was no other way to view video footage of what happened that day. It was another advertising monopoly that charged customers a premium and paid journalists with the profits.
Monopolies are generally frowned upon in free-market economies, but governments around the world made an exception for news media, because journalism is widely seen as a public good. It informs the public, exposes corruption, and holds powerful interests to account. At least in theory.
The digital revolution of the early-21st century brought the near annihilation of those monopolies. Classified ads migrated to online companies such as TradeMe and eBay. Business advertising headed to Facebook and Google.
Who do you want advertising your pizza business: your local newspaper or Google Ads, which can serve the advertisement directly to the person who just googled “fast food”, is standing down the road from your store and who they know – from years of intense surveillance – loves pizza?
At the same time, local media outlets moving into the digital world found themselves competing for attention with global news brands such as The Guardian and The New York Times and a multitude of other distractions: video games, podcasts and fighting with strangers on social media.
NZ on Air’s annual surveys of media consumption habits, “Where Are the Audiences?”, have become a gloomy obsession for the industry. They show the mass migration of audiences away from traditional media consumption – newspapers, radio and broadcast television – to digital platforms Facebook, TikTok, YouTube, Netflix, Neon, Amazon Prime and Apple TV and Spotify. More people now watch YouTube or TikTok than broadcast TV; music streaming is more popular than radio. Younger viewers and listeners are more attractive to advertisers, much of the money chases them. And most of it has flowed from domestic media companies employing journalists to the cabal known as Faang: Facebook, Apple, Amazon, Netflix, Google. For every dollar spent on advertising in New Zealand, 90 cents goes to them.
Who do you trust?
If journalism is a public good, why can’t it simply be funded by the taxpayer, like the health or education systems? Partly it is. RNZ receives $68m a year, Whakaata Māori $47m. NZ On Air invests about $150m in contestable funding, a small portion of which supports local journalism. But direct public funding of private sector journalism is a delicate thing, and New Zealand’s last attempts are widely seen to have scorched the earth for future funding policies.
During Covid, many media outlets faced bankruptcy due to the sudden collapse in advertising. In response, the government announced a $55m ringfenced fund, the Public Interest Journalism Fund (PIJF). Though successful in its own terms, it became deeply controversial, criticised by right-leaning organisations such as the New Zealand Initiative and the Taxpayer’s Union. NZ First’s Winston Peters, Act’s David Seymour and National’s Judith Collins all raised concerns, with Peters and Collins questioning the impartiality of media coverage by organisations receiving state funding. Peters referred to it as “$55 million of bribery”.
A Taxpayer’s Union poll found 59% agreed government funding for private companies undermined media independence; 44% opposed the PJIF versus 24% in support. (A former Labour staffer, who didn’t want to be named, said, “The irony is that when we went into 2023, the media we allegedly bribed spent the entire year tearing us to pieces.”)
The scheme was closed in June 2023, but discussion flared up again last April when AUT released its Trust in News survey (which covers the big news providers and smaller entities such interest.co.nz. The Listener is not included). It found only 33% of New Zealanders strongly agreed with the statement that they “trust the news most of the time” – the percentages had fallen from 53% in 2020. 75% of respondents actively avoided the news – one of the highest rates of the countries surveyed.
For every dollar spent on advertising in NZ, 90 cents goes to Big Tech.
The report stated, “Those who say they don’t trust and/or avoid the news are most concerned about the negativity of news, including its impact on their mental health, and what they perceive as political bias and opinion masquerading as news.”
In May, University of Auckland think tank Koi Tū published a paper titled “If not journalists then who?” written by Gavin Ellis, a former editor of the Herald and media studies lecturer. It identified multiple problems, many at government level: the 16 separate acts of Parliament affecting media are woefully outdated; multiple regulatory bodies have different roles and standards.
But the primary problem Ellis identified was declining trust. “The mixing of fact and opinion in news stories is identified as a cause of the public’s low level of trust, and online analytics were found to have aberrated news judgment previously driven by journalistic values.”
Ellis told the Listener, “The most shocking thing about the industry’s response to the Trust in News survey is that there wasn’t one. Everything just carried on as before.”
Who pays?
If the business model has collapsed and the government can’t bail out the industry, where does the money come from? Prime Minister Christopher Luxon keeps urging domestic media to innovate but has little concrete advice on how firms are supposed to outcompete Faang, especially when those companies don’t have to pay tax and seem to evade any form of government regulation.
The most popular solution among traditional media firms is that Big Tech funds them directly. This is the premise of the Fair Digital News Bargaining Bill.
The bill is based on a scheme introduced in Australia in 2020 and imitated in Canada. The logic behind it is that giants such as Google and Facebook have used the distribution of news they did not create to build advertising near-monopolies. These are bankrupting the industry that created the content and eroding the public good delivered by journalism, replacing it with technologies that seem to be causing considerable social harm.
The proposed bill would compel platforms that benefit from New Zealand news content to enter negotiations with news publishers and reimburse them for the content. If they can’t reach an agreement, the legislation sets up a bargaining process with a final offer arbitration system.
Facebook owner Meta responded to the Canadian legislation by simply blocking links to Canadian news outlets across Facebook and Instagram. The ban resulted in substantial declines in traffic to Canadian news outlets.
Meta tried the same tactic in Australia, relenting when the Australian government threatened to stop advertising on the platform.
Australia is now looking at a levy-based system, in which platforms are taxed and the revenues fund public interest journalism.
New Zealand’s bill was initiated by Labour and taken up by National when Paul Goldsmith took over as Broadcasting Minister. Eric Crampton, chief economist at the New Zealand Initiative, is a ferocious critic.
“The bill tries to recreate a funding model that was outpaced by technology,” says Crampton. “It’s like saying Ford should have had to pay a levy on every Model T sold to compensate the manufacturers of horse-drawn carriages.”
But the bill seemed set to pass anyway: the News Publishers Association lobbied hard for it and Labour and National were enthusiastic about a solution to the industry’s decline that didn’t cost the government anything.
Then Google dropped its bombshell. Its New Zealand director, Caroline Rainsford, warned that if it passed, “we’d be forced to stop linking to news content on Google Search, Google News, or Discover surfaces in New Zealand and discontinue our current commercial agreements and ecosystem support with New Zealand news publishers”.
How would that work? If something newsworthy happened and you searched for it on Google, you simply wouldn’t see any results from any of our domestic media outlets. It would be very hard for most digital news organisations to survive the subsequent collapse in traffic.
With the bill now on hold, Goldsmith’s office will only say: “The minister will make announcements when he’s ready.”
Documenting collapse
The Spinoff began in 2014 as a TV blog and gradually expanded into current affairs and political and social commentary. Its editorial stance is staunchly progressive; the site is beloved on the left, resented and despised across much of the right.
For the past few years, founder Duncan Greive has also hosted a podcast called The Fold, which has documented the collapse of the media industry. The Fair News Bargaining Bill has been an ongoing topic.
“There’s not a consensus that the current form of the bill is optimal,” says Greive. “You’ve got the News Publishers Association, which wants [the government] to pass it and believes Google is bluffing, essentially, and thinks it is our last-best chance to achieve a bargain with big technology.”
But Greive and a number of other online platforms – all of whom are far more vulnerable to the tech industry – are on the other side of that position. “I’ve got a lot of sympathy for the minister. We have the biggest employees of journalists very keen for it to pass, but there’s still a significant preponderance saying this is a very dangerous thing at the worst possible time.”
For Greive, the other important factor here is the state of Australia’s legal framework. Our bill was supposed to be in line with it, but a recent joint select committee report in Australia found the code was “broken” and recommended a switch to a levy-based system, in which the platforms are taxed and the revenues fund public interest journalism. It would be more palatable to the platforms, but it reopens the problems of government agencies deciding which journalism to fund.
Greive suggests a pause in New Zealand’s policy response makes sense. “If Australia’s about to change tack, maybe it’s about taking a breath until that becomes clear.”
The problem with that is that New Zealand’s industry is collapsing now. A few days after we spoke, The Spinoff announced it was laying off staff and began a membership drive to save the site.
Zero clicks
Every year, Google holds an “I/O conference” where it announces major developments across its platforms. At the 2024 event, the big news was Google AI OverViews. Previously, if you searched for information on Google – a recipe, a celebrity’s marital status, a news story – the results would link you through to the information you wanted, serving you ads and harvesting your data along the way. But the AI Overviews product uses a large-language model to generate the response right there on the page, requiring zero clicks to access the information. The slogan: “Google will do the googling for you.”
The announcement was met with dread by online news outlets: terms like “catastrophic” and “death blow” were common – although these were swiftly followed by articles mocking some of the results delivered by the service. It told users to put glue on their pizza to make the cheese stick and recommended that humans eat one rock a day for their health. Google advised it was still fine-tuning the service.
Tech research firm Gartner had already estimated a 25% fall in Google search traffic by 2026 due to generative AI. For many media companies already on the brink, Google’s AI Overviews response may signal the end.
Alternatives struggling
It was 9am on a Friday morning, mid-March, and Sean Plunket was interviewing Graham Linehan, comic writer and creator of Father Ted, co-creator of Black Books and the IT Crowd.
Linehan came to New Zealand on a book tour, speaking to sell-out crowds at signings, but there was heavy security due to his many controversial statements about transgender rights. Linehan is deeply, bitterly opposed to the notion that men can identify as women or use women’s toilets or changing rooms. It’s an obsession he admits has ended his marriage and cost him work – although now he has a new vocation as a global champion of trans-exclusionary activism.
It’s also a topic of interest to Plunket, who challenged then PM Chris Hipkins at a 2023 press conference to “define a woman”. The clip of Hipkins struggling to reply went viral.
Plunket is a broadcaster who won many awards in a long career with traditional media outlets, most notably as co-host of RNZ’s Morning Report. But he interviewed Linehan on The Platform, the digital talkback station he founded in 2022. It’s 75% owned by rich-listers the Wright family as a venue offering alternative viewpoints to the media. Plunket himself owns the other 25%; he and Wayne Wright regard our traditional media as conformist, censorious, left-leaning and presenting ideology as objective reporting.
Plunket rejects the suggestion that The Platform is right-wing media – “We’re new media”. He notes no traditional media interviewed the controversial Linehan on his visit; he believes this is part of the reason it is going bankrupt.
The Platform’s launch roughly coincided with the emergence of three rival digital news ventures, all presenting themselves as alternatives to traditional media. Reality Check Radio was launched in March 2023 by activist group Voices for Freedom, which formed around protests against the government’s Covid lockdown and vaccine mandate laws. The digital platform described itself as “an oasis of rational thought in an age of cancel-culture, censorship and false narratives”. Last April, it announced it was going off air due to financial problems. Hosts Rodney Hyde, the former Act leader, and veteran broadcaster Peter Williams presented a 14-minute video calling for the listeners to donate to keep the station on air.
Plunket – who is hostile to the anti-vax cause and calls Reality Check Radio “rabbit-hole radio” – suggested it might have been a fundraising stunt. Williams responded that Plunket was jealous. In June, the Advertising Standards Authority ruled one of the station’s ads made claims about Covid-19 vaccines that breached the standards of the advertising code. The station is still online.
ZB Plus was another right-leaning, subscriber-only digital platform promising “a new voice in New Zealand journalism”. The NZME entity was helmed by Philip Crump, a lawyer who spent much of his career in London before returning to New Zealand and building an online following for his pseudonymous identity, Thomas Cranmer.
Writing as Cranmer, Crump broke a number of significant stories based on close readings of Labour’s Three Waters legislation and information unearthed via the Official Information Act. He also broke the story that Green MP Golriz Ghahraman had been arrested for shoplifting, and exposed some of the alleged misuse of census data involving Te Pāti Māori and Manurewa Marae, which prompted a Public Service Commission inquiry and police investigation.
But by June, ZB Plus had closed. In October, Crump was appointed by Paul Goldsmith to the NZ On Air board.