Dealing with State Owned Media

Steven Maharey Proposes one solution - I suggest another

Throughout the recent turmoil surrounding news media difficulties the Minister for Broadcasting has been silent. She has been criticised for this approach. In my view she should be applauded. Without any State intervention a solution for the problems surrounding Newshub was found – by the industry and the market. That is as it should be. There has been far too much State interference with the media. The Public Interest Journalism fund – more on that later – provides an example.

But there are other solutions. A former Minister of Broadcasting (along with a number of other portfolios) Steven Maharey wrote a piece in the Herald for 20 April 2024 entitled “It is Possible to Save the Media.”

Steven Maharey is a New Zealand academic and former Labour Party politician. Elected to Parliament for the first time in 1990 , he was Minister of Social Development and Employment from 1999 to 2005 and Minister of Education from 2005 to 2007. He retired from Parliament at the 2008 general election to become the Vice-Chancellor at Massey University (2008 – 2016)

In August 2018, Mr. Maharey became the chair of the Board of Pharmac. During this period Pharmac underwent a period of change following a critical review. In April 2021, he became Chair of the Accident Compensation Corporation (ACC).

In March 2023, Mr. Maharey attracted media attention after the Public Service Commissioner Peter Hughes ruled that two of his op-ed columns published in the Sunday Star Times breached public servants' rules for impartiality.

Since Mr. Maharey's actions were deemed to be at the "lower end of the spectrum," Prime Minister Chris Hipkins ruled that he would retain his positions as the Chair of Pharmac, ACC, and Education New Zealand.

Mr. Maharey resigned from Pharmac and ACC on 1 December 2023 after the formation of a National-led coalition government following the 2023 New Zealand general election.

I don’t intend to analyse Mr. Maharey’s article paragraph by paragraph. The full piece can be found on the Herald website although it is “pay-per-view”.

In the article Mr. Maharey addresses the pressing issues facing the media landscape in New Zealand. ​ He highlights the disruptive challenges posed by digital advertising, new media, and changing audience preferences.

Significantly and unsurprisingly Mr Maharey emphasizes the need for government intervention and support to ensure the survival and innovation of the media industry although he offers no real rationale or justification for such intervention.

The solution offered by Mr. Maharey is the sale of Television New Zealand (TVNZ) and the expansion of Radio New Zealand (RNZ) into a 21st-century media organization. ​ He advocates for an independent and well-funded media entity that covers broadcasting, social media, and print, while also supporting Māori media as a reflection of the country's commitment to the Treaty of Waitangi. ​ The article calls for a reimagining of the media landscape in New Zealand, emphasizing the importance of a diverse media that informs, educates, and entertains, contributing to the nation's future. ​

Having offered that overview I shall now delve a little deeper into the piece.

The first theme that is clear relates to the challenges faced by the media. The article suggests that these are as follows:

1. Digital Advertising: The rise of digital advertising has significantly impacted traditional media outlets. Advertisers are shifting their focus and budgets towards digital platforms, leading to a decline in revenue for traditional media. ​

2. New Media: The emergence of new media platforms, such as social media and online streaming services, has changed the way audiences consume content. These platforms offer alternative sources of news and entertainment, diverting attention and viewership from traditional media channels.

3. Changing Audience Preferences: The Mr. Maharey observes that audience preferences are evolving, and their consumption habits are shifting. This change in preferences includes a shift towards online content consumption and a decline in traditional media consumption, such as television and print.

4. Global Nature of the Problem: The challenges faced by the media industry in New Zealand are not unique to the country. ​ Mr. Maharey points to governments in other countries, such as Finland, Ireland, and Singapore, which have taken action to support their media industries, while the New Zealand government considers the problem to be "global" and feels limited in its ability to assist. ​

These challenges collectively contribute to the disruption and decline of the media industry in New Zealand, and, according to Mr. Maharey but without any justification, necessitating the need for government intervention and support.

Rather, suggests Mr. Maharey, the government is ideologically opposed to spending money on the media because the problem is "global", making it difficult to assist. Yet the assumption seems to be that the government should assist. Why it should do so is a mystery.

The State has long had an interest in broadcasting from the early days of radio when the assets of the Radio Broadcasting Company were acquired by the government, which established the New Zealand Broadcasting Board (NZBB).

This would later be replaced by the New Zealand National Broadcasting Service (NBS) and the National Commercial Broadcasting Service (NCBS). In the 1950s, these merged to become the New Zealand Broadcasting Service (NZBS), a government department.

In 1962, this gave way to the New Zealand Broadcasting Corporation (NZBC), an independent public body modelled on the BBC in the UK. However, there was no room for private radio.

Print media has also been subject to State intervention. In the 1960’s there was a tussle between Rupert Murdoch and Canadian Lord Thomson over the ownership of the Dominion newspaper. This led to the National Party, led by Prime Minister Keith Holyoake to enact the News Media Ownership Bill of 1965, which would limit future overseas ownership of news operations to 20%. Mr Holyoake played a more prominent and passionate role in the debate in parliament on this bill than on almost any other piece of legislation during his long career. Its intention, Mr. Holyoake told parliament, was to protect homegrown journalism against the fickle or malign self-interest of foreign press barons.

Counterintuitively, the Labour Party opposed the enactment of the Bill. The government’s real concern, Labour Party leader Norman Kirk suggested, was maintaining the sympathetic press coverage it enjoyed under the status quo. “This is not a News Media Ownership Bill but a National Government Protection Bill,” said Mr. Kirk. “It is a first step towards removing the independence of the press.” Mr. Kirk’s Labour Government repealed the News Media Ownership Act 1965 in 1973.

There can be no doubt that the New Media Ownership Act of 1965 was an example of Government intervention in the way in which news media did business. It was clearly protectionist in nature in the same way that the Fair Digital News Bargaining Bill proposes to provide a financial support structure for struggling mainstream media entities.

Television broadcasting reached New Zealand in 1960, later than many parts of the world. It was an expensive medium for a small country, and geographical features made it difficult to get a clear signal to some areas.

At first there were four regional stations which shared programmes. They were combined as one national network in 1969. When Neil Armstrong walked on the moon that year, an estimated 1.5 million New Zealanders watched the event on television, in a delayed broadcast.

Colour arrived in time for the 1974 Commonwealth Games. That was the year a second channel — TV2, known for a while as South Pacific Television – was created.

That all changed in 1989 when the Government deregulated the broadcasting market and the number of private stations grew exponentially as a result. Most were locally owned and operated, but eventually became part of the Mediaworks group of stations.

Politicians love to argue about television, and they have restructured the system many times. Control of the two channels changed from the NZBS (1960) to the NZBC (1962), to TV One and TV2 (1975), to the BCNZ in 1976, and finally to TVNZ (1980). TVNZ was restructured as a State-Owned Enterprise in 1988, then as a Crown-Owned Company in 2001.

As matters stand the State exercises control over broadcasting primarily by the issue of broadcasting licenses. To broadcast on radio or TV in New Zealand requires a broadcasting licence. The categories of broadcasting licence are:

• A commercial FM sound broadcasting licence so that the licensee can own and operate a commercial FM radio station.

• A commercial AM sound broadcasting licence enabling the licensee to operate a commercial AM radio station.

• A Television broadcasting licence which has some specific requirements.

• A non-commercial AM or FM sound broadcasting Licence allowing the licensee to own and operate a non-commercial AM or FM radio station to promote regional and community information.

• Finally there is a Māori reserved sound broadcasting licence so that the licensee can own and operate an AM or FM radio station for promoting Māori language and culture.

If a person obtains a license and becomes a broadcaster as defined under the Broadcasting Act 1989, there are obligations under the broadcasting standards regime, which is overseen by the Broadcasting Standards Authority (BSA).

So the extent of State involvement in broadcasting is to manage spectrum by the issue of licenses and provide a form of “quality control” via the complaints system to the Broadcasting Standards Authority.

Internet based streaming content systems such as The Platform or Reality Check Radio are not broadcasters within the meaning of the Broadcasting Act and are not subject to the supervision of the Broadcasting Standards Authority.

It is clear from recent developments that arguments and proposals for political involvement and interference continue.

So given a history of Government involvement and interference in media, the methodology ofMr. Maharey’s proposal - State involvement - should come as no surprise.

The starting point is the purpose of the media - to inform, educate, and entertain the public. ​ Mr. Maharey’s view is that the media plays a crucial role in providing news, information, and analysis on various topics, including current events, politics, science, culture, and more. ​

It serves as a platform for journalists and reporters to investigate and report on important issues, holding those in power accountable.

Media also acts as a medium for sharing diverse perspectives, promoting dialogue, and fostering a well-informed society. ​ Additionally, media serves as a source of entertainment, offering a wide range of content such as movies, TV shows, music, and sports coverage.

I entirely agree. But what Mr Maharey omits is that media organizations are private businesses and subject to market forces. Other than citing the examples of Finland and Sweden where governments provide assistance to media, the business reality of a media company appears to have gone under the radar.

However, Mr. Maharey’s description of the purpose of the media provides a rationale for State interest in the media. The good of the public – what was described in the Seventeenth Century as “the common weal” – is served by a healthy functioning media. Thus, the State interest is to ensure that the public interest is served by the provision of information and education as well as entertainment – a form of intellectual “bread and circuses”. The provision of a platform for differing and often divergent views fosters a healthy democracy – again a public interest or public good rationale.

Within this theory the justification for a public broadcasting model becomes obvious – a state supported media organisation or channels. This is what we have at the moment with Radio New Zealand and TVNZ. Radio NZ is funded. TVNZ operates on a commercial model.

What Mr. Maharey proposes (and I apologise that it has taken so long to get to this point) is selling Television New Zealand (TVNZ) and using the funds to expand Radio New Zealand (RNZ) into a 21st-century media organization.

The new media organization should be independent of the government and not take advertising, while commercial media should undergo a major restructure and have more access to advertising dollars.

Mr. Maharey puts it this way:

“Meanwhile, back at the new RNZ, the focus should be on being a public media organisation.

In a nutshell, public media are given money to make programmes while commercial media make programmes to make money. The market, advertisers specifically, decide if commercial media are doing its job. Public media are judged on whether they make a contribution to the health of the society and culture. I should stress this does not make public media better than commercial media, just different.”

But although the focus is on the State-owned media, a further element is proposed. The government should consider regulating social media platforms within its borders and ensure a level playing field for media based in Aotearoa New Zealand.

Thus Mr. Maharey is suggesting that the Fair Digital News Bargaining Bill should be enacted.

The proposals advanced see the government or the State as the solution to the problems confronting media. This is entirely consistent with Mr. Maharey’s ideological antecedents. The Left sees the State as the solution.

My view is that the State should have nothing to do with broadcasting. The recent optics surrounding the Public Interest Journalism Fund which has given rise to the perception – I emphasise perception – that media were promoting Government messaging has done enormous damage to the media as an institution. It is best that the State cuts its ties with broadcasting in the interests of broadcasters and indeed its own interests.

The State has been involved in media and especially broadcasting for far too long. It has had an interest in control of media organisations in one way or another. The regulatory ties were loosened to a degree in 1989 although the same constraints that were imposed on radio in the 1930’s and that continued thereafter until private radio demonstrated its utility have been imposed on television and continue through to today.

The problems facing Ms Lee as Broadcasting Minister are that given the development of digital systems and the Internet, streaming services that fulfil the same function as Mr. Maharey sees for MSM are currently unregulated. Should they be drawn into the regulatory net? The answer to that should be no.

In fact there is an alternative – albeit radical – to that proposed by Mr. Maharey.

1.   The interest of the State in broadcasting and online services should be restricted to the allocation of broadcasting spectrum – the present licensing scheme. If it were decided to retain the Broadcasting Standards Authority (which I discuss briefly below) complains system a condition of the grant of a license would be submission to the jurisdiction of the BSA

2.   The bureaucratic support that is spread across a number of Ministries would no longer be required and should be concluded.

3.   TVNZ and RadioNZ should be sold. The funds realised from such sale should be placed into a specific trust which would be tasked with establishing a Public Broadcasting system not unlike the PBS in the United States. Any further funding required by such an entity should be derived from public subscription rather than taxpayer funding. Such an organisation would be completely independent of State control.

4.   There would be no need for the continuation of organisations such as New Zealand On Air or similar entities which should be disbanded.

I am undecided about the role of the Broadcasting Standards Authority. My inclination is to say that the control of content should be governed by the objectionable standards of the Films Videos and Publications Classification Act.

Beyond that the complaints process for the BSA based on broadcasting standards would no longer be required. If viewers or listeners do not like what they see or hear, the off switch provides a remedy and given that a commercial entity, subject to market forces, would be providing radio or TV, too many off switches would result in a decline in advertising revenue.

To continue with the BSA standards model with the associated complaints regime would give rise to a consideration of what to do about regulating online services. At the moment the Films Videos and Publications Classification Act applies, as do provisions of the Harmful Digital Communications Act. Further State involvement in the online space is unnecessary although the Department of Internal Affairs was trying to push for regulation of online content with its Safer Online Services and Media Platforms proposals. Under the model proposed the DIA proposals would represent an unacceptable level of State overreach.

Admittedly this leaves the New Zealand Media Council in an anomalous position. The NZMC is a voluntary regulator for print media and was put in place by the media itself in the face of likely regulation in the 1970’s by the same Labour Government that repealed the News Media Ownership Act. If the involvement of the State in broadcasting were eliminated (subject to licensing arrangements) the original raison d’etre for the NZMC would no longer exist.

The Broadcasting Minister’s much criticised inaction actually forced Newshub and MSM to seek solutions for their problems themselves. Despite protestations from individuals that Government assistance was not on the radar, it was and the constant pressure on Ms. Lee would suggest otherwise. As I have suggested, the outcome revealed the wisdom of her position.

Perhaps if she is looking for solutions, those involving the downsizing of State involvement in broadcasting and digital communications would be a worthwhile start. In that way the State could be seen as providing a solution rather than continuing the problem.