One source told the Herald: “The digital team are very distressed … given the wording of ‘content and websites that aren’t profitable’.”
It is likely TVNZ’s two news websites, 1news.co.nz and renews.co.nz are in the spotlight, especially if the state broadcaster decides to focus its digital news endeavours on its increasingly popular streaming platform TVNZ+, the key plank in its five-year digital-first strategy.
O’Donnell’s email outlines “the type of things we’re reviewing to potentially change” including:
- Consolidating teams based on capabilities and aligned goals “to enable better collaboration and to streamline leadership”;
- Outsourcing some activities to save costs, including “content workflows and delivery of our technology”;
- Content and websites “that aren’t profitable”;
- Pooling resources including reviewing and considering roster patterns;
- Possible new partnerships and collaboration;
- Possible investment in new tools to drive efficiency and enable business and revenue growth;
- New revenue opportunities that could be enabled by new technologies such as self-service and AI tools;
- Reviewing support function resources.
O’Donnell’s email reiterates that the state broadcaster has made no decisions yet as to what it will propose.
It says the state broadcaster will outline a range of proposed strategic changes in the week beginning Monday, October 7. After feedback and consideration of that feedback, a second stage of proposed structural changes “to achieve efficiencies” would be presented.
“Our intent is to work through both stages in a consultative and open way to ensure you have the opportunity to understand and consider what’s being proposed and to provide feedback. My aim is to complete both stages before the end of the year to give you certainty.”
Websites under scrutiny
Aside from its TVNZ+ streaming platform, the state broadcaster operates two news websites – 1news.co.nz and youth-focused renews.co.nz.
The two sites are likely to be in the spotlight, although their bottom-line contributions are not known.
Right now – in terms of monthly audience numbers – 1news.co.nz (913,000) is a considerable distance behind Stuff (2.2m), the NZ Herald (2.1m) and RNZ (1.6m).
TVNZ has been ramping up the presence and prominence of its news and current affairs content on TVNZ+ and the state broadcaster might well see that as a more effective, efficient and profitable form of news delivery, given people’s love of video.
Earlier last week, TVNZ had been advertising for a news editor for TVNZ+ but this job has since been removed from the Seek website.
A TVNZ spokeswoman said the role was advertised for a week. “Given the volume of applicants early on we didn’t look to extend this.”
TVNZ’s finances and ‘resilient’ staff
Three weeks ago, TVNZ announced an after-tax loss of $85 million for its latest financial year, to June 30 – including a non-cash impairment of $62.1m and an EBIT (operational earnings) loss of $28.5m
It expects a similar operating loss this financial year, although it has been working with staff on ideas to either raise revenue and/or cut more costs to close a $30m gap.
After a small net profit of $1.7m in 2022/23, TVNZ has been harshly hit by poor economic conditions over the past 12 months, with a big drop in advertising revenue.
Its overall revenue dropped almost 12% to $288.9m, from $327.6m the previous year. Advertising revenue was $272.7m, compared with $309m in the previous 12 months.
O’Donnell’s internal email to staff is careful in its wording, reiterating that the company has “made no decisions about what to propose, so please continue sharing your ideas and thoughts with your executive team member and leaders”.
The state-owned enterprise will be very careful to avoid another messy and expensive legal battle with the likes of the E tū union over employment processes.
As well as the areas outlined in O’Donnell’s email, a source said E tū was working with TVNZ on a parallel piece of work to find efficiencies and other revenue-raising ideas, as part of the state broadcaster’s requirements under its collective contract.
The source said the process was thorough, and well supported by TVNZ management and E tū members.
The source described TVNZ staff as “resilient” and “courageous”, especially with a “Sword of Damocles” hanging over their heads.
Workers were trying to save jobs, the source said, while also striving to “maintain the essential character and integrity of TVNZ as an organisation in terms of fulfilling its mission statement and its strategic objectives under the TVNZ Act”.
TVNZ responds
The Herald put a list of questions to TVNZ on Friday in light of O’Donnell’s email.
“We’re still working through what changes are needed to deliver on our strategy,” said a spokeswoman.
“No decisions about what will be proposed have been made yet, and so there is no further information to share at this stage.”
The company was “committed to sharing and working through proposed strategic changes with our people – they will be informed of any proposals as and when they are ready to share”.
“We’ve been open about our need to identify $30m in annualised earnings (through revenue generation and cost reduction) to ensure TVNZ is a sustainable digital media business going forward. We’re assessing options against our strategy and we’ll work through this with our people over the coming months.
“We will ensure our people are supported, with a range of confidential professional counselling and career support services available.”
Editor-at-Large Shayne Currie is one of New Zealand’s most experienced senior journalists and media leaders. He has held executive and senior editorial roles at NZME including Managing Editor, NZ Herald Editor and Herald on Sunday Editor and has a small shareholding in NZME.
