No plan B to save The Spinoff

The Spinoff founder Duncan Greive says there's "no plan b" to save the website if an attempt to dramatically increase the number of paying supporters is not successful.

He and The Spinoff's chief executive Amber Easby and editor Madeleine Chapman issued an open letter on Thursday, outlining the financial predicament of the platform.

It comes after it was revealed earlier in the week that three full-time roles had been disestablished and one part-time.

The open letter said The Spinoff's revenue would normally come from three main sources: Advertising and commercial partnerships, audience contribution and funding from NZ on Air.

"Two of those buckets have been leaking hard lately. The steep decline in advertising for local media has been well documented. We're no different - we've just seen the worst monthly decline since the business was founded. We sincerely appreciate all of The Spinoff's clients and partners who remain committed to working with us, both now and in the future.

"While the current economic cycle may change, conservative estimates suggest 70 percent of advertising spend now goes to large, unregulated overseas technology companies. The government, the largest advertising spender in the market, continues to favour these technology platforms over local media.

"Again, this is its choice - but it's not without devastating consequences for local organisations like ours."

The Spinoff also discovered on Friday that all of its proposals had been declined in another round of NZ on Air funding, for the second time in a row.

"Meanwhile, our Creative NZ funding has been halved this year, and the Public Interest Journalism Fund, which currently supports two roles within our small team of 31, is due to finish next year. While the state is under no obligation to fund our work, it's hard to watch as other platforms continue to be heavily backed while your own funding stops dead."

They said as a result, as well as reducing staff count, The Spinoff had frozen virtually all external editorial commission and put newsletters on hiatus. It had also paused publication of The Friday Poem.

The letter said that while the site had a monthly unique audience of 412,000 it only had 9080 regularly donating members.

"Today we are announcing a big, audacious goal - to double the number of members who support us with monthly or annual payments. It's the only way we can fill the hole created by the depressed advertising market and a rapid decline in public funding for our journalism. We know this won't happen by tomorrow, but it's what must be done.

"This is us saying that it's time for The Spinoff's audience to be the most reliable indicator of our value - and source of financial support."

Greive said a similar call for help as Covid hit had resulted in a large increase in supporters.

"We shot a flare up into the sky and tripled our membership in the space of two weeks… we are asking again and we'll see."

He said some of the Covid supporters were still there.

"If everyone had stuck around we wouldn't be needing to do this. There's a natural month-on-month churn. What we've seen over the last five years is a very slow decline. At our absolute peak we had a bit over 10,000 members. Today we have a bit over 9000… most months you lose a double-digit amount more than you gain.

"That's the result of the cost of living crisis… but when all your costs are going up and your revenue is declining even slightly it's a bit of a boiling frog situation."

Greive said there had been a three-year plan to double audience revenue but that was predicated on a situation of "normal bad".

"The advertising market being difficult, we weren't banking on any new money from big tech. We thought the baseline level of support from the likes of NZ on Air and CNZ would more or less continue.

"We weren't trying to do anything crazy we were just assuming that would roll along. It feels like the blink of an eye - the ad market kind of exploded and the NZ on Air thing was the unexpected part. We would have been in trouble with the ad market but a manageable level of trouble. The NZ on Air thing was so unexpected… our audience is as strong as it has ever been so it's not like we were failing on that front."

He said, when the media industry as a whole was suffering in a "brutal way," to have NZ on Air single out one platform was "quite extraordinary".

He said rather than have an "extinction event" the decision had been made to ask for help. "Things are pretty bad but it's manageable if the audience can come to the party."

Greive said the initial response had been overwhelming. "We are pleased by the early stage. Doubling is a big ask, we don't expect it to happen today. But we like to think we can achieve it over a three- to six-month span.

"You get an early read on whether it's possible and the early read is that it could be. It will be a massive amount of work and persuasion and making the case. We won't be able to let up on this thing. We've got out of the blocks well but there's a bunch of laps to go."

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