Trust in NZ Media Plummets

Kiwi trust in news now well below global average - report reveals

The public's trust in New Zealand's news media has fallen sharply over the past year and is now well below the global average, a recent report suggests.

New Zealanders also lead the world in active avoidance of the news due to the perception the news is of poor quality, negative, or biased.

According to the latest report, trust in the media has been declining all over the world. But in New Zealand that decline is much steeper. New Zealanders’ trust in news fell nine percentage points from 42% last year to 33% this year, "well below" the international average of 40%.

Report: New Zealanders Don’t Trust the Media

The annual report, Trust in news in Aotearoa New Zealand 2024, has confirmed what most of us probably knew already: Kiwis don’t trust the mainstream media, and the trust that is there is plummeting.

General trust in news in New Zealand is now at the same level as the UK and very close to the rock bottom levels of the United States, the survey results suggest.

Surveying for the report was carried out online by Horizon Research and weighted by age, gender, educational qualifications, income, ethnicity and region.

AUT lecturer and report co-author Greg Treadwell said: "Trust in news and news outlets keeps declining and journalists and media companies need urgently to form relationships with their audiences and with communities to rebuild that trust."

In the survey data, all the major New Zealand news brands suffered declines in trust. The survey asked the public to rate the trustworthiness of the 16 main news media outlets, none of which managed to score more than an average of five out of 10.

What’s the Problem with the Result?

Don’t get us wrong:

• An open and unbiased media is an excellent feature of the free world, and
• Freedom of speech is one of the cornerstones of democracy. This includes the freedom of some people to pen opinions that we may not agree with!

But… frequent visitors to this website may have already identified the frustration that most investment professionals (including us) experience with the media. More specifically the impact many media reports can have on some people’s financial decision making – such as changing investment strategies based on fearful news reporting. Consider the following international headlines, from reputable sources, about the most well-tracked investment index in the world, the largest 500 companies listed in the US Stock market (“S&P 500”). All headlines are predictions made in December about the year to come, though this sort of sentiment can be found year-round:

• Market Watch, December 2013: Market could be hitting a dangerous triple top‍
• Money Morning, December 2014: Stock Market Crash 2015: 7 Charts You Can't Afford to Ignore‍
• The Fifth Person, December 2015: 4 Warning Signs the S&P 500 Might Have Run Out of Steam‍
• Yahoo Finance, December 2016: Stocks have only been this expensive during the crash of 1929, the tech bubble, and the financial crisis‍
• Forbes, December 2017: 4 Reasons You Should Run Away From… S&P 500 ETFs‍
• Business Insider, December 2018: A crash could wipe 60% from stocks‍
• Business Insider, December 2019: A plunge is on the horizon‍
• Business Insider, December 2020: ‘Overextended’ S&P 500 will suffer a 70% crash‍
• Medium, December 2021: Should You Sell Everything Now to Avoid a Stock Market Crash?‍
• Market Insider, December 2022: From Bank of America to Morgan Stanley, Wall Street giants are expecting stocks to crash more than 20% next year‍
• Business Insider, December 2023: Prepare for the S&P 500 to plunge 23% by mid-2024 (it was up by 15% mid-year)

And how did the S&P 500 perform over that period, you may wonder? It’s up about 200%, which tells you all you need to know about market predictions and the scaremongering headlines. Sure, there were pandemics, wars, market crashes, and so on during this timeframe, but if you simply invested $10,000 when reading the first headline, back in 2013, then ignored every headline since, now you’d have around $30,000.

Background – Mainstream Media Falters

Especially over the last decade or two, technology has disrupted many long-established businesses. The media is no exception.

Just a few short years ago, traditional news outlets including newspapers, magazines, and the evening news was big business, mainly because the funding required to pay for printing presses or television studios, including expensive cameras and journalists, broadcasting licences, satellite time to transmit live broadcasts from journalists in far-flung locations was all so difficult for a newcomer to obtain. The same funding barriers prevented anyone from obtaining, then passing on, simple information to the masses, such as the weather forecast. This is called a competitive moat, just like a castle of the middle ages had a moat to prevent roving armies from seriously challenging it, the cost of funding a decent news operation prevented newcomers from challenging established media outlets.

The Tables Have Turned

Nowadays, anybody with a smartphone and a social media account can have the same reach as a journalist. You can even have your own website for a few hundred dollars. News is continuously delivered via smartphone app or social media. If we need to know the weather forecast, rather than tune into a radio station or wait patiently for the six o’clock news (as everyone needed to just a decade ago), a smartphone app will tell us instantly. In the face of such technology and innovation, mainstream media remain burdened with their expensive studios and monstrous newsreader salaries.

Several other matters have also had an impact:

• Journalism is the least trusted profession.
• Polls, analysis, and general reporting from mainstream media outlets have made consistently incorrect predictions. This is true in New Zealand and overseas, and has been going for years, consider: the outcome of the UK’s Brexit referendum or the election of Donald Trump. Some have suggested such predictions represent a disconnect between mainstream media and the silent majority – an unspecified large group of any nation’s population who keep their opinions to themselves. Others have suggested the media’s political bias is to blame. At the very least, many might fairly question the methods mainstream media outlets use to collect data, such as opinion polls, and the degree of journalistic rigour applied to any raw data collected.
• The modern world is filled with any number of things competing for our attention on a minute-to-minute basis. This means it takes even more sensational or outright fake headlines and news stories to get us to notice. This trend may be pushing even the most professional and experienced journalists away from ‘proper’ investigative journalism and towards more sensational stories.
• The independence of New Zealand and global mainstream media outlets has been called into question. In particular, New Zealand’s so-called $55 million Public Interest Journalism Fund has drawn ire. During pandemic lockdowns, many mainstream New Zealand media outlets received part of a $55 million government bailout, in addition to wage subsidies, plus the New Zealand on Air funding media outlets already received. One of the recent study’s co-authors, AUT senior lecturer Dr Merja Myllylahti said a major reason for the decline in trust, and even for an increase of incidences of attacks on journalists, was “… funding of the news by the government, so a lot of people perceive that the media is in the government’s pocket,” she said.

For better or worse, the points above have all accelerated the development of non-mainstream media and sources of information. They’re also leading us to collectively turn off the news.

What Makes News Get Our Attention?

Biologically, we’re hard-wired to pay close attention to negative things, so we can avoid them. This is an evolution throwback, as our cave-based ancestors needed to carefully remember things that might cause them fatal harm: such as poisonous berries, or the regions where predators roamed. Our modern brains still have this programming, which means we pay a lot more attention to negative information than positive information.

The media have built their industry on this.

We never see a journalist saying to the camera, “I’m reporting live from a country where a war has not broken out” or “…reporting live from a city that has not been ravished by a hurricane”. If bad things have not vanished from the face of the earth, there will always be plenty of incidents and accidents to fill the news, especially when billions of smartphones have turned most of the world’s population into live crime reporters and war correspondents.

Crisis is a word much-loved by journalists, though it has become so overused it’s starting to lose all meaning. The term crisis is now used to describe nearly any newsworthy situation, which might include the climate, health, poverty, inequality, housing, and has extended as a descriptor for the topic of this entire webpage, the New Zealand media crisis! Paying close attention to such anxiety-inducing headlines bemoaning the latest crisis might not only have a negative impact on your overall wellbeing, but could also give you a distorted or pessimistic view of the world…

Are Things That Bad?

The negative nature of news (not just fake news) is that we might all think the world or country is steadily getting worse. In fact, the opposite is true. Consider these facts, which may run contrary to some popularly held beliefs, and certainly which run counter to most media headlines:

1. Globally, the number of people living in extreme poverty fell by more than one billion from 1990 to 2015. Even better, since 2018, more than half of the world’s population is considered middle class or wealthier.
2. Since 1900 the average global life expectancy at birth has more than doubled. In the last 20 years alone, the global average life expectancy has risen from 66.3 years to 72.6 years. (New Zealand’s is now 82.3 years).
3. Since the mid-1950’s, the world has become steadily more peaceful. The number and severity of armed conflicts, and number of people killed, has declined.
4. The world is becoming more equal – global income inequality has been falling since 2008, and for 20 years before that it had plateaued. New Zealand’s level of income inequality remains better than many countries including the United States and United Kingdom.

Try telling anyone who’s reading too many news headlines that humankind is getting healthier, wealthier, less conflicted, and more equal!

What Can You Do?

As always, it’s best to focus on what is within your control.

1. Stay calm. Nobody benefits from media-induced hysteria (think back to the panic buying of toilet paper!), let alone changing life or financial plans based on fearmongering news reports.
2. Keep perspective. Remember, despite whatever bad news the media is peddling today, by nearly all measures the quality of life of humankind is steadily improving. We’re collectively getting healthier, wealthier, and becoming more equal.
3. Fact check. A quick google search might be enough to verify most information. At the very least, check any author’s sources for accuracy.
4. Is it a joke? Sometimes intentionally fake news might just be well-disguised comedy.
5. Switch off. New Zealanders reportedly lead the world in avoiding the news, if you’re not already one of the Kiwis taking this approach, maybe it’s time to start.

Follow the tips above and not only will your finances thank you; you’ll probably be a lot happier too.