Duncan Greive analyses three months’ worth of ratings data to get a sense of whether Stuff and Three’s big bet is paying off.
When Three shocked the country by announcing it was shutting Newshub earlier this year, as many as 10 groups are thought to have canvassed the idea of taking over making the bulletin. Stuff looked an outsider – lacking any background in live broadcasting, and despite its digital strength, remaining culturally the newspaper group that is its origin story.
Yet Stuff beat out rivals NZME (owners of the NZ Herald and Newstalk ZB) and won the right to deliver a 6pm news hour through the week, along with a shorter half hour on weekends. Called ThreeNews, Stuff took on the boldest bet in our news media, and had 80 days to figure it out.
It hired a clutch of former Newshub staff, both front-of-camera stars like Sam Hayes, Laura Tupou, Jenna Lynch and Lloyd Burr, along with production-side veterans. The deal gave Three the news programme, but Stuff the news segments – the strategy sought to transform Stuff into a true multimedia news platform, and to unlock valuable audiences and inventory across both video and text.
Initial reviews for the production were mixed, with The Spinoff’s Tara Ward praising “a longer, more complex story than you’d expect in a traditional half-hour news round-up”, while former 3 News boss Mark Jennings called it “passable at best” at Newsroom. Ratings for its first month were up and down, complicated by the Olympics playing out within days of ThreeNews’ debut. Since then Stuff has ironed out many kinks, but is still learning – it has occasional issues with graphics, and cycles through a number of different weekday presenters, much more than is common at TVNZ.
It’s now more than four months since Stuff’s brave leap into the unknown, so we have a substantial series of ratings to test its performance. Additionally, I’ve approached Stuff, Three’s owners WBD and TVNZ for comment and a sense of how the various digital products are performing too. The data below is supplied by Nielsen* unless otherwise specified.
5+ audiences dropped swiftly, then steadied
I’ve included the last week of Newshub at 6pm as a kind of baseline. Some viewers were watching to observe its end – the final episode had an audience about 25% larger than is typical, with almost 270,000 tuning in – but its last week was broadly in line with where it had been for some time.
What the ratings show is that the 5+ audience for ThreeNews dropped fairly sharply. Thankfully for Three, a new baseline was established at 160,000-180,000 viewers. While that represents a 20%-25% decline on the previous 5+ viewership for Newshub at 6pm, due to the massive cost savings associated with ending Newshub, it’s likely that through this lens the decision looks like a success.
This is because from Three’s owners’ point of view, some loss of viewership was inevitable. What it needed to do was lose less from reduced audiences than it saved by not paying for a full newsroom. It’s a brutal calculation, and of no comfort to former Newshub staff, nor the many people who loved its product – but the aim of the legacy media game is currently survival. Interestingly, market leader TVNZ’s ratings have been a lot more volatile through this period. They sent a comparatively huge team to the Olympics, and reaped the rewards, but since then ratings have been choppier, and trending down.
25-54 shows the most significant decline
In 2017, MediaWorks owned Three, along with a bunch of radio stations. It held an event at Auckland’s venerable Northern Club, featuring Paul Henry as host, to announce to advertisers it was now “the 25-54 company”. It was a brilliantly simple piece of branding, making sure the assembled clients and agencies understood one big thing about its audiences – that they were the very high-spending household shoppers they all sought to reach.
A lot has changed since then, most obviously that MediaWorks sold Three, along with all its TV assets, to Warner Bros Discovery (WBD). Three no longer markets itself that way – but 25-54 has not relinquished its status as the most important demographic to advertisers, who rightly reason that the cohort both has money and can be persuaded to spend it somewhere new. Within television, people love the 5+ audience because it’s the biggest number they have, but everyone knows its name is somewhat euphemistic, because very few under 25s watch linear television. If you subtract the 25-54 from the 5+ number, the vast bulk of those who remain are, in fact, over 55, with many considerably older again. Super Gold Card holders are not undesirable – we have a UBI for pensioners, and they’re the wealthiest group in the country, on average. But advertisers have historically paid less attention to them.
The story here for ThreeNews is less positive. It started with roughly half as many 25-54 viewers as 1News, broadly in line with long-term trends in that demographic. But as soon as the Olympics started, TVNZ saw a massive boost, while ThreeNews fell away. TVNZ didn’t have the rights, but sent more than a dozen staff over and had chunky visuals and coverage right through, while ThreeNews was much more constrained. Despite TVNZ dealing with a $30m budget hole, it committed far more resource than Stuff could afford to, and reaped the benefits.
While ratings declined after the Olympics surge, it seemed to bake in an advantage for TVNZ, and despite it narrowing slightly in September, that remained. What is also clear from this chart is that younger linear audiences are still declining. The most recent figures seen by The Spinoff show 1News at 122,600 linear viewers in the 25-54 demographic, while ThreeNews is at 46,200.
Aside from the news, no other linear show drew more than 90,000 viewers. Because news sets up the night’s viewing – most shows that follow have smaller audiences – it means that the core advertiser demographic for Three has lost between a quarter and a third of its viewers in a few months. That is a commercial headache for Three – but again, because it has saved so much in costs, it might still be profitable.
Digital is a bright spot. Is it bright enough?
The thinking behind this move was financial and strategic for both parties. For Three’s owners WBD it allowed them to retain news in the vital 6pm slot, without carrying the heavy cost of Newshub’s exceptional journalists. This allowed it to build a bridge to a post-linear future with ThreeNow as the core of its offering, and to be able to run its company on a much-reduced headcount. For Stuff, it was a step change to its video capacity, and an injection of some of the charismatic broadcast stars which it has lacked against the radio and TV giants for which it competes with for advertising.
Stuff’s managing director of digital Nadia Tolich told The Spinoff that its “video views have quadrupled on site since mid-year, a result of not only our investment into new talent and technology for both stuff.co.nz and ThreeNews, but also product developments, placements and innovations on site”. She also cited its “The Fucking News” show with Paddy Gower and free-to-air sports (like the recent America’s Cup) as helping drive that increase. She says in general “we are all very happy with the product and the ratings share has been very stable and at times much higher than expected”.
A spokesperson for WBD provided a statement to The Spinoff suggesting that ThreeNow’s weekly reach is up 34% year on year, and that ThreeNews drives around 350,000 views per month on ThreeNow. An impressive number, but also illustrative of some of the challenges that New Zealand media faces in a digital context. It’s a little more than 10,000 views per day – a long way from linear viewership. TVNZ’s equivalent was 2.26m live or delayed streams. Far more substantial – but also roughly the equivalent of four days’ linear viewership in 5+.
To be fair to all networks, the improving weather of spring typically erodes audiences – but the trends are not positive, and help explain the cataclysmic events we’ve seen in media this year. It also suggests they’re not yet done. Chillingly, there is also what those in TV sales call the “lag effect” to contend with. Because of the way TV ad bookings are made, they tend to look back at the previous quarter when valuing the next. So Three’s loss of 25-54 audience won’t hurt its bottom line yet – but it will next year.
At that point, it might also impact the fee it pays Stuff to make ThreeNews (neither would confirm this, citing commercial sensitivity). Then Stuff will have to hope that is offset by increased video views driving higher ad revenues – though having seen off both its CEO and head of commercial in recent months, it’s not clear whether it has been successful in turning higher audiences into revenues. (Stuff is a private company, thus does not release financials.)
It’s worth noting that we are suffering through what is widely considered the worst ad market in recent memory. News has never been more discussed – the US just went through “podcast election”, after all – but many people no longer habitually watch the 6pm bulletin the way they once did, or even actively consume the core product. It’s possible, even common, to discuss news, consume commentary and rely on news, without ever touching a news product.
It ultimately only serves to illustrate just how much pressure is on media minister Paul Goldsmith as he contemplates the Fair Digital News Bargaining Bill. It’s been a year of huge job losses in TV news. All the signals suggest that painful process is far from over.
*A note on data: Nielsen did not distribute ratings for the week commencing August 18. ThreeNews did not make the top 20 for 25-54 – I have asked for data but have not received it due to the strict terms under which it is supplied to networks.