Gavin Ellis: NZ democracy needs the media to survive Covid-19

Gavin Ellis: NZ democracy needs the media to survive Covid-19

For the sake of democracy New Zealand must emerge from the Covid-19 crisis with viable public and private sector media.

Indispensable public service broadcasting must be counterbalanced by equally vital independent media organisations. Together they can hold power to account but one must not be weaker than the other.

Public service media, by definition, are mandated to serve the public good and the public has been willing to see their taxes pay for its upkeep. The present government has ensured they entered the present crisis in reasonable financial shape.

Commercial media have been enterprises whose journalism must meet a need to build an audience for advertisers. The inroads of digital services and rapacious international social media platforms meant they went into the crisis with few financial reserves.

This week media executives appeared before the Epidemic Response Select Committee chaired by Opposition leader Simon Bridges. The commercial operators painted a picture of cashflow in freefall because advertising had dropped dramatically with the Level 4 lockdown.

I was asked by the select committee to present an opening overview of the media as a whole. I told them that for some this was an existential crisis.

I cautioned against Government shoring up state-owned media at the expense of the private sector. I did so not because I was the private sector’s standard-bearer (I have had a good working relationship with both sectors), but because both elements need to survive.

Ecosystems are about the maintenance of balance and the media ecosystem is no different. Strong state-owned organisations with government backing bring an assurance of continuity. However, the independence of these organisations is underpinned by fragile constitutional instruments – empowering legislation that could be overturned by a simple majority in Parliament, and a Bill of Rights Act that can be usurped by the cynical misuse of the test that it is “subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society”.

They are likely to be safe from harm at the hands of our present politicians, but the presidency of Donald Trump has taught us to no longer assume that politicians will always fit the mould.

For that reason, we need equally strong private sector media that are not subject to the same control. Equally strong means having the same overall audience reach as state-owned media… or better. The ability to hold power to account is a direct function of the number of citizens – in a democracy that means voters – to which you are able to hold that power accountable.

However, an ecosystem is not comprised of large creatures keeping each other at bay. It is comprised of a large number of organisms, all of which contribute to the maintenance of the whole. I called for the current dominance of Facebook and Google to be curtailed because they are as much a threat to the ecosystem as any pandemic.

My submission called for stabilising, repairing and rehabilitating all of the New Zealand media ecosystem, legacy platforms and new.

I suggested a three-stage process:

Immediate Assistance

The most urgent need is to help media organisations to replace lost cashflow. The quickest form of aid is the re-prioritising and re-purposing of Government advertising budgets –spend it now and spend all of it in New Zealand media. For broadcasters, suspension of regulatory and transmission levies are also obvious targets. Tax breaks being made available to small business should extend to news media regardless of size. Loans could be made available but the ability of some organisations to repay debt is already constrained. Grants should be made available to media but should not be in the form of NZ on Air programme/subject-specific spending. The need is for across-the-board funding to maintain operations. Put bluntly, do not expect media to be able to trade their way out of Covid-19 unaided. In addition to potential financial assistance, magazines (and those community newspapers not given concessions) need the simplest form of aid: Let them publish instead of placing them outside the ‘essential’ media classification.

Post-lockdown facilitation

Facilitate and fast-track restructuring that will buy media time to find longer-term solutions. Plans to create a new entity from TVNZ and RNZ should proceed. In the private sector, Bauer has shown the catastrophic effect of withdrawal from the market and the owners of both Stuff and MediaWorks have indicated a desire to sell New Zealand assets. Financial conditions in their other markets could induce them to ‘cut their losses’ in this country and follow the Bauer example. Cities and towns without newspapers and a single television news source are unacceptable outcomes. Every effort must be made to preserve, within alternative structures, the functions that these companies fulfil. In this phase Government should introduce special tax categories for news media similar to the L3C model now being offered to some media operations in the United States (low-profit enterprises deemed tax free in recognition of public service objectives). Government must also address the corrosive and financially debilitating effect on local media of foreign search engine and social media platforms. The European Union and Australia’s ACCC intend offer credible approaches to the problem.

Post Covid-19 reconstruction

Redefine the media ecosystem and replace outmoded ownership structures with more sustainable models. Convene a ‘Bretton Woods’ conference to set new parameters and policy settings from which a sustainable mixed-model media sector can emerge.

I had suggested a ‘Bretton Woods’ Conference a week earlier in another forum. The Bretton Woods Conference in 1944 reset world financial systems for the post-war era. I said that ‘Bretton Woods 2’ would be needed to resurrect our media sector, which will emerge from the Covid-19 crisis looking like London after the Blitz or, worse, the destroyed cities of Germany and Japan.

All other efforts should be to get us to that third stage, but it should not be simply a gathering of media companies. When I first mooted ‘Bretton Woods 2’, I stated that it required far wider representation and inputs. It would, after all, be tasked with refashioning a fundamental element of a democratic society. New Zealand society has too big a stake in the outcome for it to be limited to industry participants.

It is an opportunity to apply new thinking to the structures and governance of private sector media well as a binary relationship with state-owned media.

The post Covid-19 era may yet prove fatal for the profit-based investor model that has been the basis of most media for more than 200 years. This may be a cathartic moment, out of which could ultimately flow a more sustainable and enduring media system. The unwholesome alternative would be a sector that becomes increasingly debilitated as participants weaken and die.

My submission to the select committee suggesting other ownership models singled out the L3C structure applied to local news media by some American states. The low-profit limited liability company (L3C) is a social enterprise that is allowed to trade in goods and services so long as its primary purpose is a social one. It can return a small profit to its owners, but profit cannot be its primary purpose. In return it receives a special tax status (which could be tax-free). I think it has real possibilities if Government is prepared to create a new tax category. However, there are other models: We see them already in the differing approaches to ownership and finance taken by digital journalism start-ups The Spinoff, Newsroom, Businessdesk and Politik each have a different approach.

‘Bretton Woods 2’ would be full of promise. It must not, however, be allowed to buy into the ‘supremacy’ of social media. That may be a way for politicians to connect directly with the electorate but, in the absence of a robust media scrutinising those messages, it is open to abuse: Imagine Trump’s tweets unchallenged. Social media is part of the ecosystem but, left to dominate, it will destroy it.


Dr Gavin Ellis is a media consultant and researcher. His submission can be found on his website


Photo: Archives New Zealand from New Zealand / CC BY-SA