One of the country's top journalists is predicting we'll have fewer media outlets in six months' time, whether through failure or mergers.
But if the Government doesn't help soon, Newsroom co-editor Mark Jennings says New Zealand risks losing its journalists and seeing democracy "go to hell in a handbasket".
The COVID-19 pandemic has obliterated advertising revenue, which most media here rely on to pay the bills, and occasionally turn a profit.
"Advertising has dropped by at least 50 percent, which probably means $1 billion to $1.5 billion has gone out of the media right now," Jennings, who led MediaWorks' 3 News operation for several years, told The AM Show on Thursday.
"Some of the big companies like NZME... Stuff, MediaWorks, they are really in deep cashflow trouble at the moment."
Some have already slashed staffing numbers, while others - including Newshub owner MediaWorks - have asked staff to take voluntary pay cuts to increase the chances they'll survive what is widely expected to be the biggest economic downturn since the Great Depression of the 1930s.
"They want immediate cash help, and then they want, I guess, some help further down the track. That might mean some of them are allowed to merge or consolidate so that the market has got less players in it, but stronger ones."
The Epidemic Response Committee on Wednesday heard from Jennings and other media industry leaders and experts. Jennings said it's probably too late for Broadcasting Minister Kris Faafoi to save everyone.
"They actually wanted something to happen probably 18 months to 12 months ago, when they started meeting with minister Faafoi and explaining to him that he needed to do something back then. Now... it could be too late for some media companies."
The Commerce Commission blocked the merger of Stuff and NZME, the country's biggest newspaper publishers, saying it would "substantially lessen competition in advertising and reader markets" and any benefits for the two companies didn't outweigh the loss of competition.
Jennings said it's easy to call that a mistake in retrospect.
"A lot of people were against it and worried about the lack of diversification in the media, the lack of plurality - but of course now it's pretty obvious that some of those companies can't survive unless they're allowed to merge... but is it too late?"
The media's biggest problem in the past decade has been the loss of advertising revenue to global tech companies like Facebook and Google, who can use the immense amounts of data they've collected to target individuals with tailored messages. But they hold another distinct advantage over New Zealand media companies, Jennings says.
"Facebook and Google don't pay tax like MediaWorks does or NZME does, et cetera. So the media is not really dealing with an even playing field here. They can't compete with these huge American giants, particularly in New Zealand - we're a tiny little country. Facebook is [worth] more than our GDP probably."
He's not far off - Facebook's present market capitalisation is US$176 billion, and New Zealand's annual GDP is about $204 billion.
Facebook and Google don't produce any news content themselves, but are how many people get their news - supplied for free by media companies.
"A lot of the media have not properly adjusted or adapted to the environment. Also they've been giving their content away for free, which has been hugely beneficial for companies like Facebook and Google," said Jennings.
"Yes, we are the author of our own demise in some ways, but I don't think there's any point in saying that now. If we lose all the journalists in this country, then democracy in this country will go to hell in a handbasket."
Jennings says New Zealand "probably has too many TV stations, we probably have too many radio stations", and by the end of the pandemic, "we're going to have less players, that's for sure".
But he thinks some can be saved if the ownership structures are changed. At present, many - including MediaWorks - are owned by private equity companies. It was suggested at the Epidemic Response Committee on Wednesday a tax-free model would perhaps allow media companies performing a "socially beneficial purpose" to get by, or they could be owned by trusts with little profit motive, much like how the Guardian in the UK operates.
"The ownership of television companies and other media companies by private equity players that are loaded up with debt, highly leveraged, trying to eke every dollar out of these companies - that model doesn't work anymore. We have to change the ownership structure, we have to consolidate and we need a bit of help from the Government. But yes, of course we can [survive]."
