NZ MEDIA FUND REVIEW NOVEMBER 2020 HAL CRAWFORD NZ Media Fund Review About the author Hal Crawford is an Asia-Pacific-based media consultant with experience in online, radio, television, and print media. Crawford has worked as Chief News Officer at Mediaworks in Auckland and Editor-in-chief at ninemsn in Sydney. He co-founded the Sharewars project which collected and analysed sharing data of news on social networks and is the co-author of All Your Friends Like This: How Social Networks Took Over News, 2015. Crawford Media Consulting [email protected] +61 407145499 1 NZ Media Fund Review Contents INTRODUCTION 6 EXECUTIVE SUMMARY 7 SECTION 1: THE BIG PICTURE 9 AUDIENCE BEHAVIOURS 9 NEW ZEALAND IDENTITY 12 THE FORGOTTEN CITY 14 FINANCIAL ENVIRONMENT 15 THE NZ SCREEN PRODUCTION GRANT 18 IN SUMMARY… 18 SECTION 2: THE BIG CHANGE 20 A BURST OF APPROVALS 22 METHOD OF COMPARISON 23 SHIFT FROM THE TOP TO THE TAIL 24 IMPACT OF THE RNZ JOINT INNOVATION FUND 26 PROLIFERATION OF VOICES 26 THE BROADCASTER LENS 26 SECONDARY PLATFORMS 29 CHANNELS 29 THE PRODUCTION LENS 29 AGENCY WORKLOAD 30 PRODUCTION AND COST OF VIDEO 32 THE PLATFORM CONTRIBUTION 35 A NOTE ON MUSIC 36 A NOTE ON PLATFORMS 37 DIGITAL-FIRST VS TV-FIRST CONTENT 38 SECTION 3: HOW IT LANDED 40 SIMPLICITY AND FLEXIBILITY 41 INNOVATION 42 DIVERSITY 44 DIVERSITY REPORTING 44 CURRENT HOT TOPICS 45 RAUTAKI MĀORI 46 CHILDREN’S AND OTHER TARGETED CONTENT 48 DISCOVERABILITY AND QUALITY 49 DIFFICULTY IN STANDARDISING METRICS 50 2 NZ Media Fund Review FEAR OF “DECISIONS BY NUMBERS” 51 CAPACITY AND PRIORITISATION 52 WHAT ABOUT QUALITY? 52 DISCOVERABILITY 53 FUNDING FOR MARKETING 54 PERCEPTIONS OF THE AGENCY 54 PERCEPTIONS OF THE FUND 55 SECTION 4: CONCLUSIONS AND RECOMMENDATIONS 59 FIRST CONCLUSION: THE NZMF IS WORKING 61 SECOND CONCLUSION: THIS IS ONLY A WARM-UP 61 THIRD CONCLUSION: PLATFORMS ARE NEEDED 62 RECOMMENDATIONS 63 COLLECT AND UNIFY AUDIENCE DATA 63 IMPROVE DIVERSITY PROCESS 63 ACCEPT HIGHER AGENCY OVERHEADS 63 FUND MARKETING 63 IMPROVE THE VISIBILITY OF NZ ON AIR 64 FURTHER CONSIDERATIONS 64 REVIEW DIGITAL FUNDING CAP 64 REQUIRE INDUSTRY ATTACHMENTS 64 FUND SOME PROJECTS OVER MULTIPLE YEARS 65 BUILD A COMPREHENSIVE CONTENT ARCHIVE 65 A FINAL WORD 66 APPENDIX 1: INTERVIEWS 67 QUOTES FROM THE INTERVIEWS 68 ANNIE MURRAY 68 PHIL SMITH 69 HANELLE HARRIS 69 BAILEY MACKEY 70 RACHEL ANTONY 71 MARK MCNEIL 71 PHILLY DE LACEY 72 JANINE MORRELL-GUNN 73 LISA CHATFIELD 74 ANDREW SZUSTERMAN 75 KELLY MARTIN 75 CATE SLATER 76 NEVAK ROGERS 77 SUE WOODFIELD 77 HINUREWA POUTU 78 CALLIE SCHAUMKEL 78 PAUL THOMPSON 79 MARK JENNINGS 79 DUNCAN GREIVE 80 CAROL HIRSCHFELD 81 BEN FORMAN 81 3 NZ Media Fund Review BRENDA LEEUWENBERG 82 DR MATT MOLLGAARD 83 RUSSELL BROWN 83 JANE WRIGHTSON 84 APPENDIX 2: NZOA VALUES/POLICIES 86 APPENDIX 3: FURTHER DATA 89 FUNDING APPROVALS BY CHANNEL 89 FUNDING APPROVALS BY BROADCASTER 91 TOP 50 VIDEO PROJECTS BY TOTAL FUNDING 93 FIGURES FIGURE 1: MOST POPULAR CHANNELS/STATIONS 2020 10 FIGURE 2: PEOPLE USING TELEVISION DURING PEAK 11 FIGURE 3: NZ ON AIR TOTAL FUNDING 1989-2019 16 FIGURE 4: TOTAL FUNDING, INFLATION ADJUSTED 17 FIGURE 5: FUNDING PER CAPITA, INFLATION ADJUSTED 17 FIGURE 6: NUMBER OF PROJECTS FUNDED, AVERAGE FUNDING/PROJECT 22 FIGURE 7: FUNDING COMPARISON P1/P2 24 FIGURE 8: BROADCASTER/PLATFORM FUNDING 2017-2019 (P2) 28 FIGURE 9: TOTAL APPLICATIONS, P1/P2 31 FIGURE 10: TOTAL VIDEO MINUTES FUNDED 33 FIGURE 11: DIGITAL-FIRST VERSUS TV-FIRST CONTENT P1/P2 39 FIGURE 12: "DO YOU KNOW THAT THERE IS AN ORGANISATION CALLED NZ ON AIR?" 55 TABLES TABLE 1: NZ ETHNICITY, 2013-2018 12 TABLE 2: MAJOR SPECIFIC ETHNICITIES, 2018 13 TABLE 3: REGIONAL POPULATIONS AND GROWTH, 2013-2018 (‘000) 14 TABLE 4: PUBLIC MEDIA FUNDING 2019, AUSTRALIA/NZ 15 TABLE 5: STREAM DESCRIPTION AND FUNDING PERCENTAGE 21 TABLE 6: PROJECT NUMBERS AND AVERAGE FUNDING AMOUNTS, P1/P2 25 TABLE 7: BANDING ANALYSIS, P1/P2 25 TABLE 8: PROJECT NUMBERS WITHIN THE TAIL, P1/P2 25 TABLE 9: TOP 10 FUNDED PLATFORMS, P2 27 TABLE 10: TOP 10 FUNDED PLATFORMS, P1 27 TABLE 11: PRODUCERS BY FUNDING BAND, P1/P2 30 TABLE 12: TOP 10 PRODUCERS P2 30 4 NZ Media Fund Review TABLE 13: AVERAGE COST/MINUTE 2014-2019 34 TABLE 14: TOP 10 FUNDED COST/MINUTE 2017-2019 35 TABLE 15: TOP 10 TOTAL COST/MINUTE 2017-2019 35 TABLE 16: AVERAGE NON-NZMF FUNDING, P1/P2 36 TABLE 17: MUSIC FUNDING 2014-2019 37 TABLE 18: DIGITAL/TV FUNDING P1/P2 39 TABLE 19: RAUTAKI MĀORI PROJECTS P1/P2 46 TABLE 20: CHILDREN’S CONTENT P1/P2 48 TABLE 21: HEIHEI FUNDING 2017-2019 48 TABLE 22: STAKEHOLDER VIEWS OF THE NZMF, 2020 56 TABLE 23: NZ DAILY MEDIA CONSUMPTION 59 TABLE 24: TV VS DIGITAL FUNDING 2017-2019 60 TABLE 25: NZ DAILY MEDIA CONSUMPTION #2 60 5 NZ Media Fund Review Introduction Many people in the New Zealand media industry are unaware of the existence of a thing called the NZ Media Fund (NZMF), even some who have received sustenance from it. But everyone knows NZ On Air. If the NZMF is the pot, NZ On Air holds the ladle. This review was commissioned by NZ On Air as an investigation of the NZMF in its first three years of operation, mid-2017 to 2020, but soon expanded into matters that concern the agency itself. That was unavoidable given that almost everything NZ On Air does touches the fund one way or the other. Within the text of the review, the first-person plural has been used in order to avoid the worst excesses of opinion, or at least, to appear to avoid them. The key data sources have been spreadsheets of project and funding details received from NZ On Air in September and October 2020. These sheets have been manually corrected where necessary, so that some data used in this review will no longer exactly match data in the possession of NZ On Air. Other sources are provided by Stats NZ, The Reserve Bank, Nielsen, Glasshouse Consulting and Colmar Brunton. I am grateful to Sharon Daly at Mediaworks for her assistance in accessing data, and Steven Gannaway at NZ On Air for providing the funding data. I also am very thankful to the interviewees who gave their time to discuss the fund, and who to a person went on the record. Hal Crawford November 2020 6 NZ Media Fund Review Executive summary • The NZMF was launched in response to changes in New Zealand audience behaviours and demography. Many of these changes have been driven by digital technologies, others by migration and still others by cultural shifts. • The aims of the NZMF at launch were to improve simplicity, flexibility and innovation, and to achieve goals of quality, diversity and discoverability. • Total funding overseen by NZ On Air has kept pace with inflation from 1989, with recent increases taking the form of one-off and contingent funding. Real funding per capita has declined steadily over the past decade. New Zealand’s overall public media spend per capita is relatively low. • Within the contestable funding pool, the number of approved projects has increased greatly (58% in the first three years of the fund, compared to the three previous years, not including Music projects) and the average funded amount has reduced (-38%). There are a lot more, smaller projects. Digital-first content now receives 19% of contestable funding, compared to 4% previously. The number of broadcasters/platforms, channels, and producers have all increased. Funding has been redistributed from “Premium” and “Top” bands (>$1m) to the “Tail” (<$500k). • Despite the changes, the overwhelming majority of funding is concentrated around a handful of broadcasters. Significant funding concentration is also seen within producers. • Agency workload has increased, with total applications doubling. • Audience data capacity within NZ On Air has been limited, and engagement metrics are currently not stored with project data, leading to difficulty in assessing important aspects of the NZMF. • Industry opinion is starkly divided on key issues. Nevertheless overall appreciation for NZ On Air staff and the funding model is high. • The review’s three conclusions are: o The fund is working . Despite failing to achieve one of the stated aims at launch (reducing complexity) the NZMF represents the right direction in terms of what the agency wanted to achieve and what behavioural and demographic changes demand. 7 NZ Media Fund Review o This is only a warm-up . The NZMF has not been a radical change, but rather lays the groundwork for future significant change. Digital projects remain underrepresented in funding. This is a natural consequence of history and platform capacity. Systematically assessing engagement cross-platform will allow more confidence in shifting funding to better align with audience behaviour. o Platforms are needed . Local platforms with the ability to commission and deliver content to audiences are currently a “choke point” in the system. NZ On Air must either work with industry to improve local platform capacity or review aspects of its funding model. • The review’s five recommendations are: o Collect and unify audience data o Improve diversity process o Accept higher agency overheads o Fund marketing o Improve the visibility of NZ On Air • Further considerations include: o Reviewing the digital funding cap o Requiring industry attachments on productions o Funding some productions over multiple years o Building a comprehensive content archive 8 NZ Media Fund Review Section 1: The Big Picture The NZMF was proposed in 2016 in response to significant behavioural, demographic and cultural shifts in the New Zealand population.