The media in New Zealand has seen its advertising revenue shrink probably faster than in any other developed country in the world, according to insiders.
The latest move, to bring laws to force digital platforms to pay for the news they use, is a symptom of that sharp slide.
In response, Google has threatened to turn off news links, cutting off accompanying audience traffic, if New Zealand passes a law similar to Australia’s News Media Bargaining Code.
NZ’s Fair Digital News Bargaining Bill, introduced by the previous Labour government, would force Google and Meta, the owner of Facebook and Instagram, to pay for news.
The media in New Zealand is in a critical condition, more dire than in many other markets, according to Richard Thomson, co-founder and partner of Auckland-based media agency D3.
“Our rapid shift to digital advertising has profoundly impacted traditional news media revenue streams, necessitating immediate attention,” he said.
“Given Google's position on tax avoidance, calling this a 'link tax' is somewhat ironic. We're talking about fair compensation for the value of news content to digital platforms.
“Google's threat to remove news links is deeply concerning. It could significantly diminish the visibility and reach of quality journalism in New Zealand.
“As an industry leader, Google needs to take a more responsible stance on creating a thriving New Zealand media ecosystem. This isn't just about financial considerations. It's about preserving journalism’s critical role in our democracy and society.
“We need Google to take a collaborative approach that supports the sustainability of quality news production in the digital age.
“Ultimately, we're calling on Google to be a true partner in building a healthy media landscape in New Zealand. This could involve innovative partnerships, support for digital transformation, and fair revenue-sharing models. It's time for Google to step up and demonstrate real commitment to the markets it operates in.”
An example the weak advertising revenue in NZ is Newshub shutting its newsroom following a collapse in advertising revenue.
The local market in New Zealand is an exaggeration of global trends, with the switch to digital advertising happening faster, leaving news media with thinner advertising flows.
The advertising market fell 7.3% in 2023 from a record high the year before, according to media agency bookings analysed by Standard Media Index (SMI).
Linear TV ad spend fell 19% in NZ last year and the local market there has had a frenzied love affair with digital, which is now 44% of all agency ad spend. And programmatic at 39% has the largest share of digital ad spend of all markets in which SMI reports.
In Australia, search is the biggest category in digital ad spend but in NZ programmatic is twice that of search.
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