Death of Newshub Bad News for Marketers

In the wake of Newshub’s demise, the advertising sector is bracing for more storm clouds.

Newshub’s multiplatform news operations and output in New Zealand are to be closed in June according to a statement from Warner Bros. Discovery.

“We’ve been very clear about our intention to transition our business to a more digitally led model. The stark figure is that nearly $100M has left the advertising sector in New Zealand in the last 24 months and that trend is continuing into 2024,” Warner Bros. Discovery APAC president James Gibbons announced to staff.

“ThreeNow will be at the core of the future business, supported by the FTA linear channels. ThreeNow and Three’s programming will centre around three core pillars: Local programming opportunities in conjunction with funding partners, 3rd party acquisitions across key genres – including reality, comedy, sports, factual and drama, and access to the WBD catalogue where it makes sense.”

As a major player in the New Zealand media landscape, offering news across TV, online, and social media platforms, Newshubs’ closure means fewer choices for news consumers and potentially less competition, which could affect the quality and diversity of news coverage in the long run. Already there are questions about the quality of rival TVNZ’s news service.

The closure will unfortunately result in job losses for journalists, camera operators, producers, and other staff who work for Newshub. This has a significant impact on the livelihoods of these individuals and their families. While the announcement mentions "exploring options for some staff to transition to other Warner Bros. Discovery roles," the details and the number of positions available remain unclear, causing uncertainty for affected individuals.

With Newshub gone, viewers and readers will turn to other sources for news, potentially leading to a shift in news consumption habits in New Zealand. This could benefit existing media outlets or encourage the emergence of new ones.

The closure of Newshub might accelerate the shift to online media like The Platform. The shift towards online news consumption is already well underway in New Zealand and has been for some time, driven by factors like the increased internet access and mobile browsing. More and more people have access to the internet and use their smartphones for news consumption.

Online platforms like YouTube and X (Twitter) offer convenient access to news anytime, anywhere, and often allow users to personalise their news feed based on their interests. Social media platforms are increasingly becoming a source of news, although concerns exist about the accuracy and verifiability of information shared there.

While Newshub is closing its TV operations, it's important to remember that they are shifting their focus to digital and social platforms. This suggests they intend to remain competitive in the online news space, potentially attracting some of their existing audience there. However, the closure of Newshub might create an opportunity for other online news outlets to gain traction.

There will be an impact on local communities, where Newshub had a presence in various locations across New Zealand. Its closure could lead to a decrease in local news coverage, particularly in smaller communities that relied on Newshub for local news updates.

It's important to note that the full impact of the closure will likely unfold over time. However, the potential consequences highlight the importance of a diverse and thriving media landscape in a healthy democracy.

The sharp decline in adspend has seen a seven-figure annual loss for some of the major media companies operating in New Zealand. Factors contributing to the decline apart from the soft advertising market, which obviously affects revenue streams for media companies, has been a continued shift towards social media platforms, diverting ad spending away from traditional channels, and the rise of performance marketing strategies.

On top of this, the emergence of generative AI poses an existential threat to media companies, and the local sector faces challenges due to a more austere government, economic recession, and the end of support programmes like the Public Interest Journalism Fund (PIJF).

Senior executives express concern that more of the largest media companies could face catastrophic financial events in 2024, such as liquidation, bankruptcy, or forced sales. Rumours are circulating on X(Twitter) about a possible STUFF bankruptcy, but this is only rumour at this time.

New Zealand’s media industry is navigating a precarious path, with vulnerabilities that may be worse than ever before. The situation demands attention and support to ensure the survival of quality journalism and media outlets. Independent journalism plays a crucial role in informing the public and holding institutions accountable. However, financial pressures threaten the survival of quality journalism.

Meanwhile, the advertising sector is bracing for further storm clouds on the back of stubborn inflation and high interest rates. Businesses are likely to reduce marketing budgets in the near future, if they haven’t already done so. Clients are making short-term decisions, deferring long-term spending, and as a consequence, marketers must adapt to this environment by being agile and responsive.

While some companies may consider cutting marketing during economic downturns, this isn’t a desirable strategy for long-term gains. Brands that continue to advertise during difficult times emerge stronger and position themselves for growth. Marketers should view advertising as an investment, not merely a cost. Consistent advertising through challenges pays off in the long run.

Economic headwinds encourage businesses to reassess their product and service offerings, and marketers should collaborate with product teams to ensure alignment with market needs. Regardless of economic conditions, maintaining a brand presence is crucial. Consumers still need to be aware of your offerings.

Industry-specific disruptions can impact advertising. For instance, supply chain issues have affected the automotive industry, limiting product availability for promotion. Marketers must stay informed about trends specific to their sector and adapt their strategies accordingly.

In summary, marketers in New Zealand should navigate the changing landscape by being strategic, resilient, and adaptable. While challenges exist, maintaining brand visibility and investing wisely can lead to better outcomes in the long term.