Short-term $50 million COVID-19 media support package announced to help with ad revenue drop

A short-term $50 million support package has been announced by the Government to help media companies survive the economic impact of COVID-19 as advertising revenue drops off. 

It includes $21.1 million to cut transmission fees for six months, $16.5 million to cut NZ On Air contributions by 80 percent until 2022, and $1.3 million for Government departments to purchase news subscriptions. 

The Government has set aside $11.1 million for specific targeted assistance to media companies. It will also continue its local democracy reporting pilot which has so far funded eight reporters based in regional newsrooms. 

Broadcasting Minister Kris Faafoi said the package aims to free up cash in the short-term to assist media companies in getting through the "dramatic drop" in ad revenue seen since the start of the alert level 4 lockdown. 

He said the package was designed with feedback from the industry through recent workshops where media companies were invited to identify the best ways to help them through the economic fallout, alongside the wage subsidy scheme. 

Media is only the third sector, after primary health care and aviation, to receive a specific pool of funding over and above the wage subsidy to help it get through the COVID-19 crisis.

Media companies will still have to prove they are eligible for the support by applying to Jacinda Ardern's Ministry for Culture and Heritage with evidence of the steps taken by the company to ensure viability through the COVID-19 response period. 

"This support reflects the essential role media play at this time in delivering access to reliable and up to date news coverage and keeping New Zealanders connected while in lockdown," Faafoi said. 

"There is evidence New Zealanders are turning to trusted news sources in record numbers at this time so it is critical the media is supported to keep doing the great job they have been doing."

Faafoi admitted the package alone will "not be sufficient to see the sector through a prolonged period of restrictions and reduced advertising". 

He said the second, more long-term package, is being developed and will be submitted for the COVID-19-focused Budget 2020 in May. 

New Zealand's most powerful media bosses laid the industry crisis bare for MPs earlier this month, challenging the Government to recognise the damage it's done by advertising so much on social media.

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

Faafoi said during a press conference on Thursday that the next support package will address the issue, but he could not go into further detail becuase discussions are ongoing, however he said it could be a matter of weeks away. 

MediaWorks asked all staff to take a 15 percent pay cut amid the ad revenue drop, while the New Zealand Herald's owner NZME announced plans to axe 200 jobs, and Stuff says its revenue has more than halved. 

A major shock to the media landscape came earlier this month when magazine distributor Bauer Media folded, prompting backlash at the Government's decision not to allow magazines and newspapers to be distributed during the lockdown. 

Faafoi said Bauer's owners in Germany rejected the Government's wage subsidy scheme offer, and said while he felt for the staff and titles, the owners "made up their mind".  

The Government ended up allowing the distribution of physical media material that served non-English speaking communities or rural areas where connectivity is limited.