Stream dream: TV boss on the future of television, axed news shows and turning around a $35m loss

Newshub this week announced the end of two news shows. As Shayne Currie reports, the company’s top executive is focused on a major digital overhaul.

Glen Kyne is in his office at 9.30am, drinking coffee,
and admitting he’s not normally around at this time of day. He carries the strangest, least sociable hours of any of the New Zealand media chief executives, with the need to be on regular, middle-of-the-night business calls to colleagues in Japan, US, UK and Australia.

As boss of Warner Bros Discovery in New Zealand – owner of Three and Newshub – he has a unique juggle on his hands, with his executive duties also stretching to Japan and Australia. That sees him on a mission to Tokyo every five to six weeks.

Alongside the gruelling hours and travel schedule, Kyne also has a deep existential question on his mind that plays straight to the heart of his business.

“What is the future of free-to-air [terrestrial] television? What does that look like into the future? That’s taking a lot of my time, a huge amount of my time, right now,” says Kyne.

It’s a question that comes into stark reality if you consider Warner Bros Discovery’s financial performance in New Zealand – on the face of it, the company is swamped in a sea of red ink, with a $35 million post-tax loss last year.

That’s not quite the full story, however, as there are operational and technology costs on the New Zealand balance sheet that apply to the wider APAC business. The Kiwis are, in effect, taking one for a bigger team.

Nevertheless, it’s not a pretty picture and it’s the backdrop to some major strategic thinking about the future shape and direction of the business, highlighted this week by the axing of two more Newshub shows, AM Early and the 11.30am weekday news bulletin. (Its 8pm bulletin on the Eden channel was also quietly dropped earlier this year).

The two shows were launched about three years ago, Kyne says, in a “broadcast world”.

“We’ve seen continuously, post-Covid, the shift in behaviour where people are more moving into this digital environment.

“That’s for us a big focus for where we need the newsroom to be stronger, in the digital and social space. We continue to work on plans with the newsroom into that space.”

I ask Kyne the biggest question of all in regard to terrestrial television – if there’s a timeframe for its sunset.

“No, we don’t know exactly when that pivot point is – that will be consumer-led, but the trends are evident, right?

“The trends aren’t changing; we see just this continual decline in what we call traditional linear audiences.”

He’s quick to point out that that’s balanced by huge growth, digitally.

“Everything we see about the streaming world gives us a lot of buoyancy and optimism for the future. That’s where our energy and attention is going.”

That energy, locally, is centred on Three Now. While it has been enjoying double- and triple-digit growth for some shows, the platform is in dire need of an overhaul to combat the jumpstart TVNZ has had with TVNZ+.

Kyne reveals Three Now will have a new interface before Christmas, and possibly as early as October.

“I wouldn’t say it’s world-class [right now]; what we’re trying to create is world-class. That’s what the consumer expects and that’s what they’re going to get with the new UX.”

As well as a better experience for consumers, there would be an expanded menu of content into 2024, thanks to the extensive international library offered by Warner Bros Discovery.

The company’s digital transformation has been slightly hampered by the ownership changes of the past three years. Discovery bought the television arm of MediaWorks in 2020, and Warner Bros came on board when it and Discovery merged in the US in April 2022.

“TVNZ have done a phenomenal job [with TVNZ+]” says Kyne. “They have invested for a longer period of time than we did. The investment for us in digital stalled during the sale transaction for a couple of years. We lost ground.

“We’ve been trying to make up ground. I’m not going to say these are the final steps because there’s a lot more we want to do but there is going to be a step change in terms of the quality of the [Three Now] product.”

Kyne’s official title is Warner Bros Discovery senior vice-president and head of networks for Japan, Australia, New Zealand and the Pacific Islands.

“I run a really strange day. It’s never the same. This is quite unusual for me to be in the office at this time,” he says.

Kyne is learning Japanese – with the guidance of his teenagers he’s been using the Duolingo app, and he has an interpreter in Japan for important business meetings.

He’s uniquely placed to measure New Zealand’s economy, and the state of media, against Australia and Japan.

“The industry and the sector are challenged right now, probably more so than it was during Covid.

“[With Covid] within three to four months, we were seeing recovery. This is an elongated challenge.

“In the broadcast ad market, just talking television, that’s somewhere between $50-100 million that’s not going to be in the market this year. That’s for everyone – that’s a big number.”

In Australia, there has been a lag but “the downturn is really starting to bite now”. There were similar issues in the advertising market across Japan, the US and UK.

“I would say the problem is more manifest in traditional broadcast, it gets less impacted in the digital world.”

We talk about when we might expect some green shoots in the New Zealand economy. He’s as keen as anyone to see them but hesitant to predict – he thinks most people are only guessing.

“Usually when you see these downturns, they are three to six months, and you see very clear green shoots. That hasn’t happened this time, we’re 12 months [in] and likely to be at least 18 months.”

It means, like every other media business, Warner Bros Discovery is being “incredibly prudent” with its cost base. In the case of Newshub and the wider company, it’s meant a sinking lid policy – non-replacement of roles, while at the same time making decisions such as the ditching of the terrestrial news shows this week to focus on a digital future.

Kyne says there are no plans to change AM, Newshub Live at 6pm or The Project. Newsreaders Sam Hayes and Mike McRoberts are “iconic” at 6pm and there are no plans to follow TVNZ and have just one newsreader for the evening bulletin.

TV3′s former news boss Mark Jennings recently wrote of the importance to Three of Paddy Gower’s new show Paddy Gower Has Issues and the Paul Henry-hosted The Traitors.

A Warner Bros Discovery spokeswoman says they are “incredibly pleased” with the performance of the two shows.

Gower has just completed his first season of 10 episodes – it will be returning for a second, shortly – and garnered a total terrestrial audience reach of 1.134 million (Nielsen 5+). In its first four shows, The Traitors has attracted a total audience reach of 730,000 (Nielsen 5+).

The company says it does not release specific Three Now streaming numbers, but will be reviewing this policy in the future.

Kyne rubbishes the suggestion the business would be relying on just two talent – as big as they are – for the future of the company.

“We’re not reliant on two people but we’re very happy with the formats; there’s a reason we chose those formats. We believe in them. We certainly want to continue on. If you look at our entertainment portfolio, it’s pretty vast.”

Another pair of new shows, Far North and House Rules, are just starting although The Block is on a “hiatus”. It may come back next year; there has been no decision yet.

The refreshed digital focus for Warner Bros Discovery extends into the news division – aside from the announcement this week about the dropped shows, it’s clear the newsroom is facing a reshaping.

Kyne is pleased with newshub.co.nz’s digital performance – the website has traditionally been in third place behind Stuff and NZ Herald, although both TVNZ and RNZ pipped it in July, according to Nielsen’s latest monthly report.

Newshub has traditionally enjoyed a relatively high percentage of social referral traffic – audiences coming from Facebook, especially. But as Facebook’s owner Meta continually adjusts its algorithm, demoting referrals to news sites, Newshub has lost some ground here.

Nevertheless, its digital audience is big enough, hovering around a unique audience of one million each month, and the opportunity really lies in improving the engagement and value of those existing readers and viewers.

A big focus for Kyne and news boss Sarah Bristow will be the delivery of more digital news video.

“The core of what we do very well is video,” says Kyne. “It’s things like permission to show up a bit differently in a digital environment.”

An internal challenge will undoubtedly be transforming the newsroom’s focus to better reflect audience demand. And that means an operation no longer built around a 6pm nightly news bulletin.

“We’ve got an incredible team. Look at the stories that Michael Morrah breaks – they’re just phenomenal but they don’t always have to break at 6pm, right?” says Kyne.

“That’s the point – how do we capture that audience in a digital way? I’m not telling you anything you don’t know here, but consumers are not necessarily just sitting to wait for 6pm to hear the story, they want to know what’s going on, they want to know now.

“Our ability is to be able to break the story and then enrich that story through longform at 6pm.

“There’s a lot of thought going into that at the moment, that will be an ongoing core tenet of how we think about news.”

He believes the media sector can work together better and with the government to ensure a sustainable future, including the question of the shape of RNZ and TVNZ as public broadcasters.

Kyne has met with Broadcasting Minister Willie Jackson recently, according to Newsroom, to seek financial assistance.

In an internal staff email, released to the Herald, Kyne said: “To be clear, our request to the Minister was not for money as was initially and incorrectly reported. We are however, seeking change for the benefit of the entire New Zealand sector via relief from the significant Kordia fees that all broadcast media organisations pay to a state-owned company for broadcast infrastructure.

“We have been very clear regarding our strategic transition to a digitally-led operating model in a timely, efficient and effective way. In this future model, the broadcast infrastructure would not be required. The proposed Kordia relief benefits multiple players, including state-owned TVNZ, and will enable us to heavily invest into our digital transition.”

Kyne told the Herald a strong public media objective was important for the country.

“I think if you’re going to be commercially focused, you need to be able to play by the same rules as commercial companies and that doesn’t happen, they [TVNZ] are given dividend relief, they are given benefits that others don’t get.

“So that’s the distortion. If you’re going to be public-focused then that is, of course, a less commercial model.

“The challenge for the government is how do they get that mix right?

“Because in today’s environment, taxpayer funding of a broadcaster to transition from [a commercial model is] probably not going to win votes anytime soon.”

Kyne was very pleased to sign a new deal with Sky several weeks ago that sees Warner Bros Discovery’s HBO content remain on Sky’s Neon channel.

Sky will be pleased as well – some believed Warner Bros Discovery might bring its new streaming service Max to New Zealand immediately, meaning Sky lost the HBO content (eg, Yellowstone, Succession) as well as Warner Bros Discovery channels.

Max will come to New Zealand at some point but for now, Sky has that content for a couple more years at least.

Kyne believes we’ll see more New Zealand media businesses partnering up for the likes of distribution.

“We are lucky – we are an incredibly innovative, vibrant sector,” he says, praising NZ Herald owner NZME for its own work in creating a successful diversified business.

“We all have the opportunity to do that. I think everyone’s trying to do that and bring in innovation.

“I do have a view around the world and a lot of things that happen here in New Zealand are cutting edge. We are ahead of the world on multiple fronts.”