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The pending closure of Newshub. What does it mean for advertisers?

The news that Warner Bros. Discovery (WBD) were consulting with staff on a proposal to close Newshub rocked the media world and dominated news rounds last week. Much of the commentary has hinged on what the loss of one of the country’s largest newsrooms will mean for a functioning journalism sector and, more widely, the potential democratic consequences of the proposal.


This email is not intended to address the broader social and democratic impacts, but to help inform advertisers of the commercial consequences of the WBD announcement.


What is proposed for news?

In terms of news, the proposal includes the closure of all Newshub’s multiplatform news operations and output. The proposal would mean the end of Newshub’s flagship 6pm bulletin along with the AM Show, Newshub Late and other current affairs programmes such as Paddy Gower Has Issues and the yet to be launched 7pm show hosted by Ryan Bridge.

 

Newshub’s website would also cease to exist under this proposal, although that site could possibly be used for other purposes by WBD in the future.


What about entertainment programming?

Beyond news, it is proposed that the Three and ThreeNow offering would feature local programming produced in conjunction with funding partners, acquisitions across drama, comedy, sport, reality, and factual, and key titles from WBD’s library. Bravo, Eden, Rush and HGTV would continue in their current form with the same content slate.

 

The significant point here for local entertainment programming is that from 2025 on such programmes would be largely reliant on external funding (not self-funded by WBD), be it through the likes of NZ on Air, sponsorship and/or other external funding partners.


This is not expected to change programme content outside news in 2024, with contracts already in place for these programmes.


Is this the end of Three?

Three is not being closed down. Despite speculation otherwise, if the proposal goes through as it stands, it will mean Three remains, albeit under a new business direction for WBD in New Zealand. Three would remain as a major, local broadcast channel and we will likely see an acceleration of the digital-first strategy for ThreeNow.

 

Though the broadcast channel will look very different without the foundation news offering, Three will retain WBDs most popular entertainment shows in the remainder of 2024.

 

Do advertisers need to change short-term bookings?

Client concern is a completely normal reaction to this sort of announcement, but it is important to remember that WBD will not be changing their broadcast and digital offerings before the end of June.

 

What the impact will be on Three’s audiences between now and the end of June is unclear. Assuming the Newshub service is largely unchanged, it is unlikely that current linear audiences will be affected in the meantime, in fact there may even be a blip in support, as we saw when Campbell Live was axed under previous ownership.

 

ANZA’s immediate advice is to work closely with your media agency and/or WBD sales team to track channel and programme performance rather than make immediate reactive changes to advertising plans.

 

What happens in Q3?

If the proposal to end Newshub plays out, and it closes at the end of June, there will almost certainly be audience changes in the slots Newshub currently serves, and surrounding programmes. What the new audience looks like both in size and demographics will depend on what WBD intends to schedule in Newshub’s place, and how that content is promoted.

 

ANZA urges WBD to clarify for advertisers at the earliest opportunity what the Q3 schedule looks like (if indeed Newshub ceases to broadcast).

 

Have final decisions been made?

As with any consultation process, staff have the opportunity to propose alternative plans. It is understood that some Newshub staff intend to do so. While that consultation process may be relatively short it is possible that an alternative plan could be adopted.

 

The consultation process runs until mid-March. A final decision is expected early April once feedback has been carefully considered. As noted earlier, if this proposed model went ahead, the changes would not take effect until after 30 June 2024.

 

What about TVNZ?

In the same week WBD announced their proposal for Newshub, TVNZ reported a net loss of $16.8 million for the last six months of 2023, resulting from a sharp decline in revenue of 13.5%. A loss had been signaled for some time, and indeed TVNZ began a restructuring process last year. Announcing the result, incoming CEO Jodi O’Donnell commented “that TVNZ will have to cut costs further to navigate through this uncertainty.” 

 

Will the Government Intervene?

Media & Communication Minister, Melissa Lee is understood to be taking a paper on the future of media to cabinet this week.

 

Legislation is before Parliament for online tech companies to financially support news producers although the Minister was not supportive of this when the legislation was introduced by the previous Government.  Given criticism of the Public Interest Journalism Fund (PIJF) by some coalition parties it is unlikely this would be resurrected, unless highly targeted (for example justice reporting).

 

There have also been proposals to reduce terrestrial broadcast costs paid to Kordia by linear broadcasters and for Sunday morning advertising to be opened up on television, which would require a change to the Broadcasting Act.

 

Other sector Implications

Aside from the questions raised about journalism and democracy, the proposal may well have a ripple effect across the local production sector, unless funding agencies plug the gap on production costs of local shows currently funded by broadcasters.


Summary

None of the above mitigates the impact the proposal will have had on staff, not only those working directly on Newshub, but across the WBD business. The broadcasting underdog since it was formed almost thirty-five years ago, Three has been through multiple crisis, ownership changes and restructures. Staff are understandably devastated.


There is a great deal still to play out across both news and entertainment, for WBD and its staff. Final decisions are unlikely to be known until mid-April. In the meantime, it is important to remember that WBD will not be changing their broadcast and digital offerings before the end of June. In the immediate horizon your media agency and/or WBD sales team will work closely with you as this proposal progresses.


ANZA will keep you informed of further announcements. In the meantime, if you have any questions, please contact me at lindsay@anza.co.nz.

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