Latest / Best of Business / Michael Boggs: NZME chief executive on the tough trading environment impacting the media sector

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Michael Boggs: NZME chief executive on the tough trading environment impacting the media sector · Best of Business

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  Speaker 1: You're listening to a podcast from Newstalks EDB. Follow this
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  Speaker 2: Media company ends at Me, which owns Newstalk ZB and
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  Speaker 2: The Herald, has reported today it's posted a small profit
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  Speaker 2: of one point nine million dollars for the first half
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  Speaker 2: of the year. That's down four point three on last year.
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  Speaker 2: Revenue is up. Advertising as holding steady, and that is
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  Speaker 2: despite the fact that the media sector has had a
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  Speaker 2: pretty tough year so far. We've had the shutting down
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  Speaker 2: of news Hub and TVNZ cutting a whole bunch of programs.
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  Speaker 2: Michael Boggs is the chief executive High bog Zen.
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  Speaker 3: Good afternoon.
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  Speaker 2: You must be pretty pleased with this result given what's
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  Speaker 2: going on in the media sector.
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  Speaker 3: You're absolutely right. It is a very tough environment, I
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  Speaker 3: think in every sector in New Zealand at the moment,
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  Speaker 3: but certainly as in media, and we're seeing that right
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  Speaker 3: around the market.
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  Speaker 2: How did you manage to hold onto the advertising dollar?
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  Speaker 2: I mean you've seen it completely evaporate from TV, So
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  Speaker 2: how did you guys keep it?
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  Speaker 3: I think the key thing is, and I'll take a
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  Speaker 3: station like this, you know, we just don't go to
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  Speaker 3: the market and talk about selling news talks, edb we
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  Speaker 3: sell the rest of the radio stations we have. We
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  Speaker 3: bundled out obviously with the New Zealand Herald, and we're
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  Speaker 3: seeing fantastic growth with one Roof, which is a real
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  Speaker 3: key product for us for the future.
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  Speaker 2: But so why are they putting their money into print
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  Speaker 2: and radio if they're not putting it into TV.
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  Speaker 3: Well, I think when we go and talk to a customer,
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  Speaker 3: we talk about what's the solution they're looking for? What
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  Speaker 3: are you trying to achieve. We don't just come and
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  Speaker 3: try and sell you a TV ad, And so when
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  Speaker 3: a customer wants to get to a particular audience set,
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  Speaker 3: we actually sell all of those platforms, which just gives
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  Speaker 3: them a much better reach and a much better outcome.
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  Speaker 2: I'm getting a bit of product, absolutely, Yeah, Okay, what
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  Speaker 2: do you think is going to happen in the second
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  Speaker 2: half though, because it sounds like it might get harder.
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  Speaker 3: Certainly is and we're seeing that already. So in the
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  Speaker 3: quarter one of this year, so that's January March or
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  Speaker 3: on a calendar year, we saw four percent growth year
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  Speaker 3: on year, two percent in quarter two, and what we're
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  Speaker 3: seeing in quarter three at the moment is about one
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  Speaker 3: percent growth. Now, we are seeing some signs of improvement
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  Speaker 3: though we're obviously seeing the OCR coming down. We're seeing
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  Speaker 3: business and consumer confidence start lifts. So you know, we'd
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  Speaker 3: love to see that actually flow through into people spending.
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  Speaker 2: One percent growth and what we're going through, which I
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  Speaker 2: mean some people in some parts the economy is saying
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  Speaker 2: this is the hardest thing they've ever been through. One
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  Speaker 2: percent growth is not bad.
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  Speaker 3: Well, the great news is one percent growth is against
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  Speaker 3: the market because the market is actually going backwards from
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  Speaker 3: an advertising perspective. So we're delighted to be taking share
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  Speaker 3: of course each of our platforms, and we want to
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  Speaker 3: continue doing that.
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  Speaker 2: Hey, but so you'll rise, right, we've seen the turning
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  Speaker 2: point where the OCR has now come down and a
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  Speaker 2: whole bunch of bank rates are coming down. Do you
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  Speaker 2: think it still gets hard as though, or does it
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  Speaker 2: get easier?
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  Speaker 3: I think people's heads are starting to lift now. It's
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  Speaker 3: certainly tough, and you know, your listeners wire no way
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  Speaker 3: better than I as they run their businesses, for example.
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  Speaker 3: But I think you know, I had an old boss
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  Speaker 3: that said hope isn't a strategy. But I think we're
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  Speaker 3: all hoping for better. We're actually talking about it getting better.
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  Speaker 3: We're saying business confidence is feeling better and that's all
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  Speaker 3: we need to get the country going again.
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  Speaker 2: Okay, I've hope it's not a strategy. Then you're going
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  Speaker 2: to have to still make plans for it potentially to
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  Speaker 2: be worse. So you're going to cut six million out
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  Speaker 2: yet in expendituip.
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  Speaker 3: We've already done that, So it's not something we're announcing
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  Speaker 3: today that hey we've got a whole lot of new
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  Speaker 3: cost cutting to do. That's happened. It's done through efficiencies
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  Speaker 3: across the business, and so we're pleased we've actually done
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  Speaker 3: that at the beginning of this half already and so
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  Speaker 3: that'll flow in to the second half of this year.
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  Speaker 2: How on earth am I right in thinking one roof
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  Speaker 2: turn to profit for the first time?
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  Speaker 3: It absolutely did.
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  Speaker 2: How did it do that? We're given what's going on
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  Speaker 2: in the housing market.
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  Speaker 3: Well, we're doing a great job. Firstly, we're growing the
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  Speaker 3: number of people that come to the site. We've closed
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  Speaker 3: the gap to the number one player to be just
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  Speaker 3: ten percent difference. Now we've got more and more, We've
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  Speaker 3: got more and more people upgrading their houses on the
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  Speaker 3: platform and it's a great product. So people are using
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  Speaker 3: it to inquire about houses, and people are using it
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  Speaker 3: to sell the houses.
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  Speaker 2: So is it kind of counterintuity when the market is
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  Speaker 2: actually doing really, really badly people are pumping a lot
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  Speaker 2: of money into the advertising for their houses.
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  Speaker 3: Funny enough, it's actually the opposite. So we're really pleased
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  Speaker 3: to have done well in a tough environment. Because if
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  Speaker 3: you don't think you're going to sell the hell your house,
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  Speaker 3: you're probably not going to advertise, even though you probably should.
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  Speaker 3: Like where if you think you are going to sell
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  Speaker 3: your house, you will spend some more on advertising because
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  Speaker 3: you want to get the best price. So that's what
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  Speaker 3: we're looking for in the second half of this year
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  Speaker 3: and into next year.
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  Speaker 2: Okay, so on what's going on with the media. Are
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  Speaker 2: you happy with what you've got from the government in
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  Speaker 2: terms of the Digital Marketing Bill and or Digital Bargain
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  Speaker 2: and Bill and all that stuff.
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  Speaker 3: Well, they're certainly making progress and we expect to see
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  Speaker 3: more of that in the coming weeks. All the noises
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  Speaker 3: and signals are appropriate and I look forward to seeing
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  Speaker 3: me it will.
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  Speaker 2: Come sure, Boggsy that it's the answer, because it hasn't
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  Speaker 2: worked in Canada.
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  Speaker 3: Well, it's not going to be the panacea. But we
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  Speaker 3: do know that all of the platforms, whether it be Google, Facebook,
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  Speaker 3: or whether it be all the new AAI organizations are
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  Speaker 3: taking our content and not paying it for us.
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  Speaker 2: This doesn't cover AI, does.
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  Speaker 3: It may do?
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  Speaker 2: What? What do you know that I don't know?
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  Speaker 3: Well, we'll see what the legislation says. We'll see.
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  Speaker 2: How are you guys still lobbying for the old AI
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  Speaker 2: to be covered?
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  Speaker 3: Well, why shouldn't it be? Does check GPT take all
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  Speaker 3: of our data?
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  Speaker 2: Well, I would argue with you that the AI should
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  Speaker 2: be covered, actually more so than anything else. Yeah, so
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  Speaker 2: it feels like it should be, but that doesn't mean
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  Speaker 2: that that the guys in the beehive necessarily see it
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  Speaker 2: that way.
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  Speaker 3: Well, if I ask chet GPT where it gets its
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  Speaker 3: content from last time I did it, it said between ten
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  Speaker 3: and fourteen percent of it came from the New Zealand Herald.
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  Speaker 2: Was it honest about it? Was it?
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  Speaker 3: That's what I said? Yeah?
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  Speaker 2: Okay, Well that's that's a slam dunk, isn't it.
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  Speaker 3: I think it is. And so that's where we're continuing
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  Speaker 3: to focus on. It should be included, and we should
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  Speaker 3: be paid for that content being used for these companies
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  Speaker 3: to earn income.
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  Speaker 2: Right, Boxy, what happened with the ad, the Hobson's Pledge ad.
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  Speaker 3: Hey, as you know, it was an ad. It's not
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  Speaker 3: something that the company stands up and takes a position on.
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  Speaker 3: We're absolutely reviewing guidelines. We're looking at what other companies
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  Speaker 3: around the world do, and so you know, and they're
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  Speaker 3: not too distant future, you'll see us come out and
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  Speaker 3: talk about whatever.
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  Speaker 2: Are you guys going to front foot and tell us
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  Speaker 2: if there's a change of position on this one.
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  Speaker 3: Absolutely, we're very clear on what we will do in
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  Speaker 3: the future and be clear on it.
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  Speaker 2: So what I didn't understand was it was kind of
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  Speaker 2: obvious that a position needed to be taken on it
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  Speaker 2: during the election campaign because you remember, you will remember
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  Speaker 2: the c to you the Union took out a personal
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  Speaker 2: attack on Chris Luxon, who's now obviously the Prime minister,
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  Speaker 2: and that made a lot of people really angry. So
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  Speaker 2: why at that point didn't you guys make a decision
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  Speaker 2: and say this kind of add because he doesn't happen
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  Speaker 2: on the front page.
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  Speaker 3: And so I think that's a really good point and
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  Speaker 3: something again that will review as part of these guidelines. Again,
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  Speaker 3: clearly they're not ads that we're saying. This is a
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  Speaker 3: position we take as an organized There's lots of arguments
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  Speaker 3: around freedom of speech, but there's also and a lot
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  Speaker 3: of other arguments around making sure that you know we're
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  Speaker 3: not offending people. I've had plenty of subscriber feedback. I've
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  Speaker 3: had plenty of advertiser feedback in both directions.
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  Speaker 2: Are really absolutely okay? Have you lost any subscribers over it?
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  Speaker 3: We absolutely have both.
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  Speaker 2: Both accounts, yep. And have you lost any advertisers over it?
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  Speaker 3: Absolutely? Really quite a lot, not significant, but people have
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  Speaker 3: sent us messages to let us know that they've got
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  Speaker 3: an opinion.
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  Speaker 2: And they're not happy, and so they've pulled out.
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  Speaker 3: That's right.
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  Speaker 2: How much damage does it cost you?
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  Speaker 3: It's not significant, but it's certainly something worth taking into account.
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  Speaker 3: We're a corporate organization. We've got to do what's right
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  Speaker 3: for this business.
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  Speaker 2: Okay, So when do you make a call, it won't
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  Speaker 2: be far away, all right, listen, Bogsy, thank you very
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  Speaker 2: much for being so frank with us. I really appreciates.
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  Speaker 2: Michael Bogg's the chief executive of Endzed.
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