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Will a new bill save the New Zealand news media from extinction?

Ximena Smith, Communications Lead and Senior Consultant

The crisis we are currently seeing in the news media was on full display yesterday morning during the oral submissions to a parliamentary select committee for the Fair Digital News Bargaining Bill

“It is a real fight for survival for us”, TVNZ’s executive editor Phil O’Sullivan said. Sinead Boucher, owner of Stuff, warned that the news media’s ability to help keep New Zealand “free of corruption and our societies healthy” is currently in “great peril”. 

Some of the figures raised by submitters helped expose the dire reality of this crisis: NZ Geographic publisher James Frankham said magazine advertising revenue had fallen from $210m to $117m since 2012, and chair of the Radio Broadcasters Association Jana Rangooni predicted that, unless some intervention happens, all commercial media would go extinct in the next decade.  

While a range of perspectives were aired yesterday on what should be done to rectify the situation, there was little disagreement about why the news media is in this position: in essence, the digital age has disrupted the business models of news media, and now, they are struggling to compete with global tech platforms like Google and Meta for digital ad revenue. 

It’s this competitive relationship between news media and big tech that the Fair Digital News Bargaining Bill targets. Simply put, the bill would compel digital platforms to negotiate commercial deals with news companies, in order to try to balance the scales financially and to ensure the future viability of the New Zealand news media.

“People should have to pay for using content”

A key premise of the bill is the argument that tech giants use news media content from kiwi outlets for their own commercial benefit without paying for it. 

For example, a number of news company submitters complained about the impact of ‘zero click searches’, where search engines like Google scrape and summarise information from webpages – like news sites – to answer users’ search queries without having to click away from the search engine. Another example that came up in submissions was the use of news content to train generative AI models, with no compensation paid to news outlets. 

Michael Boggs, Chief Executive of NZME, likened this to radio stations playing music on air: if they want to play a song, then they have to pay a licence fee. “You have to pay royalties, it’s a no-brainer. People should have to pay for using content.”

Stuff’s Sinead Boucher put it more bluntly, describing generative AI products as “no more than modern day succubi”.

However, this logic can go both ways. Digital platforms like Facebook and Google unquestionably provide news outlets with free referral traffic. While some media executives downplayed the importance of this traffic during their submission, the fact of the matter is that news outlets do have the option to opt-out from having snippets of their content displayed on digital platforms – and yet, they have chosen not to do so. 

The reason for this comes down to another point raised by several submitters, which is the huge amount of control that big global tech platforms have over New Zealand’s digital infrastructure. At the end of the day, the news media needs big tech more than the other way around.

New Zealand media isn’t alone in this power imbalance with digital platforms – for example, we’re currently seeing the same dynamic play out in Canada, where a similar bill has recently gone into effect. Rather than coming to the bargaining table, Meta has dug its heels in and blocked news links from appearing on its platform for Canadian users, insisting that it doesn’t need this content in order to be commercially successful.   

The Copyright Act

Former District Court Judge David Harvey suggested in his submission that news outlets already do have a tool at their disposal for dealing with tech giants using New Zealand news content: the Copyright Act.  

However, some newsroom executives dismissed this as an option. In her submission as President of the News Publishers’ Association, Sinead Boucher said the Copyright Act was not a viable option for New Zealand newsrooms dealing with this issue, as it “plunged people into endless litigation with the biggest media companies in the world."

Another reason for newsrooms’ hesitancy to pursue this in the courts is probably because it’s unclear whether a case would actually succeed.

For example, newsrooms will be closely watching the current copyright lawsuits against OpenAI in the US. Just this week, a court partially dismissed two lawsuits brought by authors against the artificial intelligence company for copyright infringement, with the judge saying that the authors had not sufficiently demonstrated that there was “substantial similarity” between ChatGPT’s output and their copyrighted works.

While commentators have noted the New York Times’ case against OpenAI appears to be strong, as they have clear evidence of ChatGPT outputs regurgitating some of their stories verbatim, a judgement could still conceivably go either way. 

It’s understandable, then, that New Zealand newsrooms are backing the Fair News Digital Bargaining Bill instead of potentially expensive litigation, as the Bill could provide them with a more certain method of revenue sharing with digital platforms.

However, the problem is that this bill wouldn’t do anything to address the aforementioned reliance that New Zealand media has on digital platforms – in fact, it would make them even more reliant on these platforms, as it would firmly establish the platforms as a critical source of funding.

Another way?

Ultimately, the weakness of this bill is that it tries to bring a copyright-based argument to a markets and competition problem. Instead, a stronger approach would treat these issues as separate, and would address the root cause of the underlying power imbalance without making media dependent on the platforms for income. 

For example, one alternative could be a bill that breaks-up the dominance digital platforms have in the online advertising market.  This strategy is already being tested in other jurisdictions; for example, The Competition and Transparency in Digital Advertising Act in the US could be a useful blueprint for New Zealand lawmakers keen to bring greater transparency and competition to New Zealand’s digital advertising market, and to level the playing field between the global tech titans and local media players.

Of course, breaking up concentration in digital advertising would not be a silver bullet to the woes of the New Zealand media industry. Other options also need to be considered – for example, despite some of the negative optics of the Public Interest Journalism Fund, the government shouldn’t completely dismiss ways in which public funds can be distributed at-arms-length towards public-interest media, in ways that build public trust. 

Right now, it’s indisputable that the media is at a crisis point, and there will be dire consequences for democracy if local media outlets were to collapse. But as policymakers now deliberate upon solutions, their focus must pivot towards fostering a resilient, competitive, and autonomous news ecosystem – one that steers clear of overreliance on major tech platforms for sustenance.

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