If Newshub goes down the tube with Three, our news will suffer from further lack of competition.
At a guesstimate, TV3 loses its owner, Oaktree, about $15 million a year and, if a new owner can be found, it will be priced at perhaps $50 million. Why anyone would pay $50 million for a company that cannot make a profit isn’t clear and TV3’s management say they’ve reached bone in their bid to cut costs.
Also unattractive for any new owner is that it would assume liability for paying TV3’s staff. I think I detect here Oaktree’s lack of appetite for having to make redundancy payments if it simply closes the channel.
The chances of TV3 surviving are, I fear, minimal. A local buyer will be hard to find. NZME, owner of the New Zealand Herald and Newstalk ZB, among other radio stations, is heavily in debt and unlikely to take on a loss-making proposition. Stuff, publisher of papers such as the Dominion Post, has rapidly declining profits and is also unlikely to want the risk of acquiring TV3.
Perhaps one of the telcos might be interested if it could pick it up for next to nothing. But they already stream the equivalent of much of the channel’s entertainment content, so why bother owning it?
In fact, TV3 has a significant asset called Newshub, the excellent news service that provides bulletins and programmes for the television network and MediaWorks radio stations and produces Sky’s Prime News. The news operation could continue to supply Prime and the radio stations, but that wouldn’t be enough for its survival. But it would be a start.
If TV3 closes down and leaves Newshub without a channel to screen content on, the news operation’s best option could be to supply a 24/7 network such as CNN or Fox, which Sky could broadcast. Newshub could also go after an online audience with a streaming news channel, taking on the very services that are eating TV3’s lunch. Vodafone and Spark should take a look at Newshub and see how easily it could be incorporated into their offerings.
Radio New Zealand is secure because it gets Government funding. TVNZ should be fine because it can top up its losses from the Government coffers.
But the private media operators are at long-term risk as advertising and audiences shrink. Even if you never watch Newshub, its survival should matter to you because competition is what keeps news providers on their toes.
A 24/7 Newshub makes sense because if people of my ageing demographic are watching online and ignoring free-to-air television, then traditional media is in big trouble.
I don’t watch local TV news bulletins much but I do snoop about TVNZ and Newshub online and watch some of their offerings.
Similarly, I mostly look at newspaper stories on my computer. However, the market reality is that as more and more of us consume foreign content, that could spell doom for local news media.
This column was first published in the November 2, 2019 issue of the New Zealand Listener.