Crumbling advertising market piles on the pressure

A crumbling advertising market has accelerated a sense of uncertainty for many media organisations, with dwindling revenue and increased competition from technology giants forcing some difficult decisions at both public and private broadcasters.

In the past few weeks alone, the loss of advertising revenue has been blamed for hundreds of job losses in the United States, Canada, Europe, Britain and New Zealand, among several others.

The difficulties brought about by haemorrhaging advertising revenue are largely viewed as a problem for private media, where it is seen as an existential threat. But outside of a few countries, many public service broadcasters also rely on commercial revenue for their operations, which is forcing difficult decisions.

It is also forcing conversations about how public media should be funded – whether it should be entirely by the state or some kind of levy – and also what shape public media should take in the digital age. In Europe, private media lobby groups are trying to limit public broadcasters’ digital offerings as they try and bolster their revenue.

Job cuts

In New Zealand, the state-owned TVNZ, which is entirely commercially funded, announced recently it was planning to shed about 9 percent of its workforce, many of those roles in news and current affairs. In announcing the decision, TVNZ said the decision was driven by a NZ$16 million half-year loss, largely driven by plummeting advertising revenue, which had fallen 14 percent.  

But among private media, TVNZ has long been seen as holding a privileged position. In 2020, TVNZ stopped returning a dividend to the New Zealand government so it could instead invest millions of dollars into its digital products.   

That angered many in the private sector, including TV3, which was also making losses (last month, it announced its Newshub brand would close, resulting in the loss of hundreds of jobs).  

Such strong resistance from big tech has led to some alternative ideas about how tech giants might be compelled to pay, such as through a levy on all digital advertising revenue, put forward by New Zealand academic, Peter Thompson. 

For public service media, digital platforms are increasingly the dominant news platforms for all broadcasters. While they seek to compete with their global counterparts, they are also facing an increased kickback from domestic private media companies  against their digital transformation plans, as is being seen in many European countries.   

In Germany, the association of newspaper publishers has filed a complaint against the ARD and the public broadcaster’s online content, arguing it’s too similar to what they produce, thus threatening their commercial viability. ARD, like other German public broadcasters, is financed by a household levy.  

ARD, for its part, said it was interested in cooperating with news publishers. “If we want to maintain the diversity and journalistic strength of the German media landscape, then we face challenges in an increasingly monopolised media world that we can only overcome together,” a spokesperson said.  

Such scrutiny from the private media sector in Europe has already led to legislation such as the Yle law in Finland which means all news-based content the public broadcaster puts online must be accompanied by audiovisual content. Austria’s public service media, ORF, also has a certain number of text-only articles it is allowed to publish on its homepage.  

With a precarious financial future, private media are pointing to public service media as a more viable target for government action, rather than multinational tech firms. In Canada, for example, lobbying from private media saw CBC/Radio-Canada’s share of Google’s funds capped, with the majority of it going to private media.  

While there are protections and funding for public broadcasters that do help buffer against the global headwinds tearing through the global media industry, public service broadcasters are by no means immune to them.   

But with extra mandates to fulfil and uphold, as well as concerted lobbying efforts, there is a risk of public service media being undermined or left behind as part of the shift to the new media landscape.