Tag Archive for: streamer

What’s the buzz, tell me what’s a-happening?

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NZ On Air’s Where Are the Audiences Survey 2023 confirmed what previous reports have been warning of—the death of linear television in New Zealand. (WATA research here.)

Three telling points were highlighted in the document that attest to this:

• All traditional media continue to show consistently declining audiences, with TV no longer attracting the biggest audiences during its traditional peak time of 6-10.30pm.
• For the first time the study is showing significant declines in traditional media use among 60+ year olds, and 40-59 year olds are now at the cross-over point where digital media audiences overtake traditional media.
• 2023 also represents the cross-over point when New Zealanders overall start to spend more time using digital media than traditional media.

I’m in one of those older demographics, and I can tell you that I spend more time watching YouTube than I do watching broadcast TV.

If you look at the most popular channels, sites and stations graph, you can see that I’m one of the people who has in 2023 made YouTube the biggest attractor of New Zealand audiences each day at 44%, with Netflix sitting just behind at 42%. TVNZ 1 has gone from 48% in 2014 to 34%, while TVNZ 2 doesn’t even do well enough to get on the graph, at 11%–a death rattle if ever I’ve heard one. TV3 is the bottom player on the graph, going from 34% in 2014 to 17% this year. The rising TikTok sits two percentage points above at 19%. No wonder NZ On Air is throwing money at TikTok in pursuit of the elusive yoof audience.

New Zealand’s bastion of commercial TV media, our public broadcaster TVNZ, after a post -COVID advertising recovery under the canny watch of former CEO Kevin Kenrick, is in throes of its own. With a projected loss of $15.6 million in the 2023/2024 year due to slumping advertising revenue, the belts there are being severely tightened. Head of Drama and Scripted Comedy Steve Barr got the push under a restructure, and now Chief Transformation Officer Kate Calver (Slater) has left to take up the CEO role at Great Southern TV. A positive for TVNZ is that TVNZ+ on the NZ on Air graph has seen its audience reach grow from 14% in 2016 to 32% in 2023, sitting just under TVNZ 1. I think some acknowledgement for this needs to go to former TVNZ CEO Rick Ellis and his digital strategist Simon Aimer, who drove TVNZ into the digital era with their “Inspiring on Every Screen” strategy. With an interim CEO still in place after the departure of Simon Powell following the collapse of the RNZ – TVNZ merger, and a new chair in current NZFC Chair Alastair Carruthers, there’s undoubtedly more transformation to come in that balliwick.

Back at the NZFC ranch, Dana Youngman has been appointed Change Manager by new NZFC CEO Annie Murray, to bring about transformation that the filmish screen industry has been baying for, for years. Change there is also driven by the recent budget cuts NZFC has suffered or will face in the near future. We shall find out what comes in this space in the not-to-distant future, but for the time being we’ll just have to wait… like we’ve been doing since Annabelle Sheehan departed in 2021.

Competition has seen Netflix and some other streamers on the advertising-driven bandwagon for some time now. Netflix has just introduced title sponsorships and binge ads to its advertising offerings. At the same time, its subscription prices for their ad-carrying service and their ad-free service have gone up in the US and will soon in the UK, France, and undoubtedly elsewhere. It’s ironic when you think about it: you used to get advertising for nothing on Free to Air TV. Now you have to pay for it on advertising-carrying subscriber services.

Consolidation is coming in the streamer world is the catch cry we hear more and more these days. We are also being told that peak TV is over, with streamer budgets and commissioning shrinking. Not only has NZ completely missed the Golden Age of Television Drama globally, but it’s become increasingly harder for us to play catch up with the same old or decreasing domestic budgets–we shall see if the New Zealand Screen Production Rebate changes this.

Exacerbating the uncertainty for the NZ screen industry is the ongoing SAG-AFTRA strike. I’ve heard international productions are backed up, wanting to get into NZ to shoot. Yes, the writers are writing but nothing can be done without actors. The actors’ down-tools has gone past the 100-day mark with no real end in sight. Both the guilds and the studios while still talking do seem to be at considerable loggerheads.

I guess the only thing to do at this point is to smile and sing a little tune:

Try not to get worried, try not to turn on to
Problems that upset you, oh
Don’t you know
Everything’s alright, yes, everything’s fine…

Tui Ruwhiu
Executive Director

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War of the SVODs World

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Well it’s happening. The SVOD wars have really kicked off.

Apple TV+ debuted in New Zealand on 1 November with 14 original shows. Very much a tortoise approach from Apple, and you don’t have to pay for it for a year if you’ve bought an Apple product recently. Otherwise you’re up for $8.99/month.

Disney+ meanwhile will be off like a hare at the starting gates, launching more than 600 movies and shows from Day 1, being 12 November (19 Nov. in NZ). Expect every household in the country with kids to at least consider adding a subscription at $9.99/month.

NBCUniversal’s Peacock will soft launch in April 2020 with 15,000 hours of programming, while HBO Max comes online in May with more than 10,000 hours of programming.

Netflix is already feeling the heat.

FilmTake reports that Netflix lost subscribers for the first time in the U.S. since they started in 2011. It has likely reached saturation in the market, and we can expect to see the massive international growth of Netflix to slow or halt, or worse for them, decline.

We all thought Netflix was shaking the screen industry to its core, and it has. But it was primarily Google and Facebook that was impacting on New Zealand’s Free-to-Air market, taking advertising dollars away from TV screens.

The initial streaming entities in NZ did contribute to a decline in Free-to-Air viewership, but our Free-to-Air market was still holding up with significant numbers of New Zealanders continuing to watch mainstream TV. But is that going to be the case now with Disney+ and Apple+ in the market, together with Netflix, Amazon Prime, Neon, and Lightbox and with others to come?

You have to imagine that Neon and Lightbox are fretting about their continued existence, unless Neon has done a deal to retain HBO content and possibly keep HBO Max out of the NZ market. Spark-owned Lightbox will most likely be the first casualty unless their strategy has sport and other offerings in the wings. Spark has the All Blacks and cricket afterall. Unlike Peacock, who is mooted to pursue sport, news and live programming, Spark doesn’t have the programming and financial resources of NBC and Unversal to draw upon. It’s rumoured though that Lightbox is for sale. You’d need big cojones to step into that space , or cash+ and programming+. Streamers who don’t have studio majors and/or their parents as backers are really at a disadvantage. With Netflix now paying a premium to license shows because they are losing the content owned by their competitors, you can’t imagine our locally-owned streamers having deep enough pockets to play in the big leagues. And how much longer will our broadcasters be able to access the best of international product?

At TVNZ, Kevin Kendrick is focusing on more NZ content to differentiate its Free-to-Air and OnDemand brands and help to avoid the price wars on the international scene for programming. This is an area they are likely to be able to call their own, as we can’t expect the international SVODs to commission much here unless they are forced to as the Australians are seriously contemplating making them do. With reality TV to undoubtedly feature highly in the offering, is TVNZ really going to be able to keep NZ viewers in good numbers?

What about Three? Only the woman upstairs knows what’s going to happen there. The gossip: it’s going to be bought by… someone.

Kris Faafoi’s decision about what to do with the soon-to-be loss-making TVNZ and with public broadcasting becomes even more critical now.

And just as this is all happening, NZ On Air CEO Jane Wrightson resigns to become the new Retirement Commissioner.

Jane has done a fantastic job navigating NZ On Air through the tumultuous changes that have impacted on broadcasting in the 12 years she’s been at the helm. But has she been prescient?

In this now constantly changing screen industry world, we’ll undoubtedly find out if NZ On Air gets retired before Jane runs her course in her new job. We’ll certainly learn whether or not Netflix will survive. If you are a producer on a multi-year pay down schedule for the content you sold them, you are going to be hoping somebody will buy Netflix out rather than it going under. As of 30 September, Netflix reported US$12.43 billion in debt and they are adding to it to keep the originals and higher-priced acquisitions coming. That US$292 Netflix share price is definitely going to take a hit sooner rather than later.

In the meantime, hunker down and get binge watching. There’s going to be more than enough for everyone with one, two or three SVOD subscriptions… for a very long time.

Tui Ruwhiu
Executive Director

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An Answer to NZ’s Broadcasting Industry Dilemma?

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As Minister of Broadcasting Kris Faafoi gets set to decide the New Zealand broadcasting industry’s future with hopefully sound advice that includes a note that the industry is more than just News and Current Affairs, I postulate further on possible answers to our dilemma to stimulate further debate and discussion.

Countries with strong public broadcasters are those with compulsory broadcast licence fees. In Denmark, with a population of just over five million, the licence fee of €332 (NZ$579) generates €4.4 billion (NZ$7,671,308,423). Danish public broadcaster DR operates six TV channels and eight radio channels with this revenue. Norway, which has a similar population to Denmark, has a licence fee of €315. Its public broadaster NRK runs three national TV channels and three national radio channels. Countries that still have licence fees include the U.K., Germany, France, Spain, Ireland, Switzerland, Japan, Italy, the Netherlands and South Korea.

A licence fee in New Zealand of just NZ$125 applied to the estimated 1,765,100 households in the country would generate nearly $220 million dollars annually. This would cover the costs to fund Radio NZ ($35 million) and Māori Television ($45 million), administer the licence fee (est. $20 million) and leave $120 million.

If the $120 million were combined with Radio NZ’s $35 mil., a newly created public broadcaster would have $155 million of muscle. This entity could deliver quality News and Current Affairs (est. $50 mil.) and would have $105 million—almost the same level of funding NZ On Air has after the ring-fenced Radio NZ funding is deducted—to create a Public Broadcaster Fund to make great factual and scripted programming for both domestic use and international sales. To help secure the independent production sector’s future, this broadcaster could be required to outsource for factual and scripted ideas and their production. Sales revenue could go back to the broadcaster and the independents to contribute towards their sustainability.

In an added approach, the Government could continue to fund NZ On Air the annual $115 million it now receives. This NZ On Air Fund could be contestable and exclusively for the commercial channels and platforms, both Free-to-Air and those with paywalls. Once again, independent producers could pitch on this contestable fund with a percentage, say 75%, being ring-fenced for the independent sector.

The commercial channels and platforms could be required to pay a commercially appropriate licence fee for this content that acknowledges the real value that local NZ content would bring to them. After all, they are commercial with the Free-to-Airs able to scoop up any advertising revenue going, while the SVODs would get the subscription revenues. Funding levels would be determined by the quality of the idea, the scale of the proposed production and the audience size.

A means to extract revenues from streamers and international serviced productions coming here would need to be found to decrease and hopefully eventually eliminate Government funding in the NZ On Air Fund.

The Public Broadcaster Fund and the NZ On Air Fund should allow for access to the New Zealand Screen Production Grant (NZSPG) so that producers can more easily pitch and finance shows that have truly global potential. The NZ On Air Fund should retain the current NZSPG requirements of 25% or more of non-NZ production funding and a minimum of 10% market money to ensure the shows have real international appeal. And while we are at it, the NZSPG’s Qualifying New Zealand Production Expenditure (QNZPE) minimum should be reduced from $2.5 million to $500k so that films with lower budgets can access NZSPG. Some thought may well have to be given to the QNZPE for TV as well.

The above could potentially solve a number of issues:

  1. Give us a well funded public broadcaster.
  2. Ensure that the independent production community would still exist and be able to make the most of opportunities both domestically and internationally.
  3. Allow the commercial broadcasters and platforms to live to fight another day with all the advertising revenue available while giving them valuable local content.
  4. Make the streamers and international productions contribute to the growth of local IP and production.

All that’s needed for this to occur would be for the NZ public to buy into the need to pay a licence fee.

I would.

Would you and everyone else?

Tui Ruwhiu
Executive Director

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