Media bosses challenge Government to recognise damage of social media advertising

New Zealand's most powerful media bosses have laid the industry crisis bare for MPs appearing before the Epidemic Response Committee, challenging the Government to recognise the damage it's done by advertising so much on social media.

The importance of trustworthy media outlets was underlined to the committee on Wednesday with the example of a conspiracy theory from the Netherlands linking 5G networks to the spread of COVID-19, which has prompted damage to some cell towers.

Prime Minister Jacinda Ardern and Director-General of Health Dr Ashley Bloomfield have both strongly rejected the theory. But despite it being simply untrue, the fake news is taking off on social media.

Broadcasting Minister Kris Faafoi highlighted the "dangers of misinformation that is being spread on social media", making reference to the conspiracy theory. 

Faafoi submitted before the country's news bosses - the heads of the media industry in New Zealand - who had a warning for the Government in return.

"The spread of that kind of news - fake news - is being enabled and funded by the institutions and businesses that advertise on those platforms and the Government [is] included there," Stuff CEO Sinead Boucher said.

The Government does advertise on local media, as you may have seen throughout the COVID-19 crisis, buit is increasingly spending more on social media ads including on platforms like Facebook and Google. 

"When you have a choice between local and global it should absolutely go to local," Michael Anderson, CEO of Newshub owner MediaWorks, told the committee.

TVNZ CEO Kevin Kenrick had a similar take: "Every dollar that the Government spends on advertising with Facebook and Google is a dollar that's not spent supporting local media - buy New Zealand."

The New Zealand Herald's advertising fell by 50 percent in April and on Tuesday it was forced to lay off 200 staff. The newspaper's editor Shayne Currie is blaming social media.

"They have taken a large, large, large chunk of our advertising revenue and that's really impacted on our ability to make sure our newsrooms are still humming," he told the committee.

Not only does social media scoop up a share of advertising cash, but it shares scoops, spreading journalism for free.

"I know of no other industry where you can steal something and not only get paid for it through advertising but get the Government's backing for it as well," media commentator and former New Zealand Herald editor Gavin Ellis said.

The Government says it needs its ads to reach as many people as possible.

"We do need to be present where people are," the Prime Minister said. "We can't stem the tide of people's new behaviour. What we can do is ensure journalism survives in spite of that."

The International Monetary Fund issued a dire forecast on Wednesday: the world is facing its worst downturn since the Great Depression.

News ratings and readership are the highest they have been in years and the world is hungry for reliable information - it's a cruel irony.

"The media sector's undergoing enormous distress at the moment and it's increasingly fragile," RNZ CEO Paul Thompson told the committee.

The Government is due to announce a support package for the media this week.