As New Zealand considers the future of its news and broadcasting industries, global streamers and tech platforms are set to face enhanced statutory obligations in the United Kingdom.

These steps by the UK Parliament come at a time when governments across the world are considering how – but also whether – to intervene as traditional media heavyweights struggle in the wake of declining viewership and advertising revenue as well as other market forces.

In New Zealand, these issues came to the forefront as a result of the proposed (and then cancelled) TVNZ/RNZ merger. The debate over the future of the media has recently been reinvigorated by Warner Bros. Discovery’s announced shutdown of Newshub’s operations, and continues as TVNZ reports financial losses and announces its own programming changes. A recent briefing to the Minister responsible for news and broadcasting indicates that legislative change is being considered, although the form of such change is still up for debate.

In this insight we summarise the new laws in the UK, look at what is happening across the globe, and provide an update on the current state of play in New Zealand.

God save… the BBC?

The UK’s pre-election wash-up period saw the passing of a number of new laws to avoid the ‘pass it or lose it’ effect of the upcoming general election – all bills not passed before the dissolution of Parliament are now abandoned and the next Parliament will need to start from square one. As a result of this flurry of legislative activity, two new laws have come into effect which could have a significant impact on the UK media landscape.

The Media Act 2024 (‘Media Act’) amends the Communications Act 2003 to reshape the obligations of public service broadcasters (‘PSBs’) and video-on-demand (‘VoD’) providers alike. Key changes include:

• The conditions that must be met by PSBs in order to fulfil their public service remit and maintain their broadcast licences have been amended to give PSBs more flexibility as to how they meet their licence conditions in light of the new broadcasting landscape, including the rise of VoD content.
• VoD providers that are not headquartered in the UK will now be subject to similar obligations (and Ofcom enforcement) to those imposed on local VoD providers and broadcasters. Designated ‘Tier 1’ non-UK VoD providers will be required to comply with rules relating to harmful material, advertising, sponsorship and product placement in VoD content. Ofcom has also been directed to produce new standards codes for Tier 1 VoD providers, which will contain further rules regulating the content and accessibility of these services.
• The Media Act also enables existing Ofcom fee regimes to be extended to non-UK VoD providers and Ofcom has signalled that changes will be proposed in due course.

The Digital Markets, Competition and Consumers Act 2024 (‘DMCCA’), which reflects similar legislation in the EU, targets digital activities that are deemed to have “substantial and entrenched market power” and “a position of strategic significance”. Designated service provider undertakings may now be regulated by the Digital Markets Unit (‘DMU’), a subset of the Competition and Markets Authority.

Under the DMCCA, the DMU has the power to require designated undertakings to trade on fair and reasonable terms, have effective complaint/dispute resolution processes, notify users of changes to their services, and ensure users are able to make informed decisions about the services they use. The DMU can also prevent designated undertakings from engaging in discriminatory behaviour, misusing market power, treating their products more favourably than those of other providers, and using user data unfairly, and can issue ‘pro-competition intervention’ orders against these undertakings.

As a final backstop, the DMU may intervene in negotiations over payment terms between designated undertakings and third party companies. If an undertaking breaches its DMCCA obligation to trade on fair and reasonable terms and fails to comply with DMU enforcement orders, the DMU may facilitate a ‘final offer’ process and order an undertaking to contract on terms determined by the DMU. Some industry groups have interpreted this final offer mechanism as empowering the DMU to require big tech companies to pay local news providers for the use of news content on their platforms, in a similar manner to the regimes operating in Australia and Canada, although the DMCCA does not appear to address this issue explicitly.

Collectively, the Media Act and DMCCA strengthen regulatory oversight of global streaming giants and big tech providers and subject them to some of the requirements currently imposed on UK operators. This appears to be an attempt to address the competitive disadvantage traditional broadcasters and media organisations claim to be facing due to the comparative lack of regulation of ‘new media’ in the UK. It will be interesting to see what impact (if any) these regulatory changes have on the financial outlook of the UK media industry, and interested parties will no doubt be keeping a close eye on how Ofcom and the DMU enforce their new powers in practice.

Global developments

A range of different initiatives have been implemented throughout North America and Europe to preserve local news, broadcasting and film industries, such as:

• requirements for digital platforms to pay news providers for the use of local news content that appears on their platforms;
• obligations to display minimum quotas of local content on streaming platforms;
• obligations to inject a minimum level of financial investment into local content;
• government levies charged to streaming companies, with revenue to be invested back into local industry; and
• in the EU in particular, legislation aimed at promoting competition in digital markets and regulating the content of digital services.

Closer to home, the Australian Government has issued the News Media and Digital Platforms Mandatory Bargaining Code, which requires designated digital platforms to enter into commercial negotiations with registered news providers for the payment for news content that is made available on their services. No providers have been designated to date, although some have voluntarily entered into agreements with Australian news organisations.

The Australian Government has also promised to enforce a local content quota against non-Australian VoD providers by 1 July 2024, although the details of any quota, including the quantum, have not yet been announced.

The state of play in New Zealand

New Zealand doesn’t currently have any legislation mirroring the Australian news bargaining code, the UK’s Media Act and DMCCA, or any of the other initiatives described above. However, there are a number of New Zealand laws that may impact the services provided by VoD and big tech providers in New Zealand. While global providers may not be subject to the same requirements as their local counterparts, it also isn’t accurate to claim they’re operating entirely in a regulatory vacuum.

In the broadcasting context, certain global VoD providers are required to comply with classification and labelling requirements for content made available to New Zealand users through their VoD services, following 2020 amendments to the Films, Videos, and Publications Classification Act 1993 (‘FVPCA’). These amendments clarified the previously uncertain application of the FVPCA’s labelling regime to local and global VoD platforms alike. Post-2020, provisions relating to objectionable and age-restricted content are also expressly stated to apply to VoD content.

The Broadcasting Act 1989 and related Broadcasting Standards regime do not apply to VoD services, other than VoD content that has been previously broadcast through conventional TV or radio by a captured broadcaster. Global VoD providers are also exempt from the annual levy payable by New Zealand broadcasters. However, providers captured by the FVPCA are required to pay an annual levy to the Classification Office under that Act.

Should any global providers be attached to projects benefitting from funding or rebates offered by NZ On Air or the New Zealand Film Commission, they may also need to engage with conditions relating to the promotion of Aotearoa New Zealand culture and investment in local industry.

Up next: Is change on the way?

The New Zealand media sector has been grappling with the rise of streaming, social media and big tech for a number of years, although things came to a head earlier this year when Warner Bros. Discovery announced its intention to close Newshub’s operations from July 2024. TVNZ has followed suit in announcing cuts to programming in the wake of financial losses, and other media outlets are signalling difficult times ahead for both news and entertainment broadcasting.

The news industry is currently in the spotlight as Parliament considers next steps for the Fair Digital News Bargaining Bill (‘FDNB Bill’), following a select committee recommendation to not pass the proposed law. The bill in its failed form proposed a mandatory bargaining process and final offer mechanism to facilitate the payment by digital platforms for local news content that appears on their platforms.

The wider broadcasting industry has received less attention to date, although a recently released briefing for the incoming minister (‘BIM’), from the Ministry for Arts, Culture and Heritage to (new) new Minister Paul Goldsmith, provides some insight into the path the Government may take. The BIM reports that Cabinet has requested the Minister to report back in June 2024 on whether the FDNB Bill should proceed to its second reading. A decision on the “priorities and process for a work programme to modernise regulation and support a thriving and sustainable media sector” was also required in May 2024, and we assume this work is still ongoing.

Notably, the BIM reports that the Government’s legislative programme for this year includes a Media and Content Modernisation Bill aimed at “replacing the out-of-date Broadcasting Act 1989 and installing a futureproofed and streamlined regulatory framework for our media”. The content of this bill is still being worked through, but the BIM indicates that options currently on the table include:

• Revising or replacing the broadcasting standards regime to “level the playing field”, including removing the broadcasting levy charged to local broadcasters and removing advertising restrictions on Sundays and public holidays.
• Considering “opportunities for more formal alignment and collaboration between [NZ On Air and the NZFC], including options for possible structural change”.
• Supporting the prominence of local channels and platforms (such as TVNZ+ and ThreeNow) on TVs and connected devices, as well as the prominence and discoverability of local content on streaming platforms.
• Encouraging investment by streaming platforms in local content, including through levies or quotas.
• Relief for broadcasters from transmission fees in the short to medium term, and a transition away from digital terrestrial television broadcasting in the long term.

We are yet to hear the Minister’s thoughts on the issues raised in that briefing. We expect that similar issues and proposals may be captured in a Cabinet paper submitted by the former Minister responsible for news and broadcasting, although the outcome of that paper is also not yet known.

Given the long list of issues competing for the new Government’s attention, as well as the complexity of the ‘media problem’, it’s unlikely that change will be swift or simple. In the meantime, parties on all sides of the debate can look across the ditch or further afield for examples of what might be proposed, and what has (or hasn’t) been successful in addressing the impacts of globalisation, the rise of new technology, and changes in consumer behaviour.

Start a conversation

Our technology and media experts Hayley Miller, Campbell Featherstone, Ashleigh Ooi and Güneş Haksever are on hand to answer your questions about New Zealand’s broadcasting, telecommunications, advertising, and content laws. In addition to advising local providers on legal compliance matters, they are experienced in advising global platforms and VoD providers on the application of New Zealand laws, including broader consumer and privacy laws, to their services.

Reach out if you’d like to know more about your obligations under New Zealand law, or if you’re wanting to engage with proposals for regulatory reform.

This article was written by Ashleigh Ooi, Senior Associate, in our commercial, technology and privacy team with research assistance from Owen Zheng, Graduate, in our corporate and commercial team.