'NZ has got to get real': TVNZ CEO Kevin Kenrick says the network could merge with RNZ

Friday, 26 October 2018

Seven Sharp hosts Hilary Barry and Jeremy Wells. TVNZ CEO Kevin Kenrick says Government funding should be focused on 'news first and entertainment second'.

This story was originally published on Newsroom.co.nz and is republished with permission.

TVNZ chief executive Kevin Kenrick was in a difficult position. Former broadcasting minister Clare Curran had made it clear she was no fan of TVNZ.

When Curran announced that the Government was planning to put a heap of money into a new television channel called RNZ+, Kenrick's response was muted.

Speaking his mind would have destroyed his organisation's already weak relationship with a minister who was totally committed to the idea of a new channel.

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Things have changed. Curran is gone from Cabinet after a series of blunders. Kris Faafoi, a former TVNZ journalist, is the new minister. And Kenrick is speaking out.

'One thing is true, wherever I look there is consolidation. Comcast [US pay-TV giant] and SKY TV in Britain. ABC Disney and Fox in the US, and we are seeing change in Australia where Nine is merging with Fairfax.

'New Zealand can't be a standalone player defying gravity.

'New Zealand has got to get real.'

Communications Minister Kris Faafoi, a former TVNZ journalist, is likely to give his former boss a decent hearing.

Kenrick won't say it out loud but gives the impression that the two recent merger proposals turned down by the Commerce Commission - Sky-Vodafone and NZME-Stuff - should have been allowed to go ahead.

'It is hard to reconcile what I see happening around the world. I'm not a Commerce Commissioner, but I'm not convinced we are getting it right.

'The sustainability of local news is far more important than plurality.'

Kenrick thinks the Government needs to take stock of its own broadcasting assets.

Former broadcasting minister Clare Curran made it clear she was no fan of TVNZ.

In a clear reference to RNZ+ he says: 'I don't think we need more channels. It makes no sense to duplicate existing capacity.'

Pushed on the idea of a merger, Kenrick doesn't rule it out.

'We have TVNZ doing this, RNZ doing that and Māori TV over there. I don't think we should have any preconceived ideas about how we might operate in the future.'

The TVNZ boss clearly sees consolidation being important for news and current affairs.

'In this environment it makes no sense for a dozen people to turn up and cover the same story.

'We also have to realise that New Zealand is not just one city [Auckland] and that local news is at risk. I think you have to look beyond your own news team and your own interests.

'What we can't have is a whole lot of sub-scale players competing with each other; what we need are centres of excellence.'

Kenrick says he has spoken to Faafoi and is happy the Government appears to be placing importance on local content and how to sustain it. But he would like to see a change of emphasis when it comes to funding.

'I think it needs to be news first and entertainment second. I also think they need to be careful and don't go overweight funding public broadcasters.'

Here, Kenrick is referring to the private sector and he will know from looking at his own spreadsheets that his competitor MediaWorks will be hurting.

Newshub and 1 News are both being squeezed by rising costs and falling revenue.

Kenrick's empathy for his competitor disappears when asked about MediaWorks' campaign to have TVNZ 1 turned into a non-commercial public service channel.

MediaWorks has hired former Sky TV lobbyist Tony O'Brien to drum up support for the idea.

'Tony O'Brien did a great job convincing a previous government to let a pay-TV company [Sky] buy a free-to-air channel [Prime].

'That is unheard of anywhere else in the world.

'Now O'Brien is doubling down and trying to convince the Government that they should get rid of MediaWorks' major competitor. If he pulls that off they should give him a knighthood.'

Kenrick says the idea doesn't make financial sense for the Government.

'We have roughly $300 million of advertising revenue. Sixty per cent of that comes from TV1, so we forgo $180 million plus we would need to buy additional content to replace the hole left by taking the ads out and that would cost $40 to $60 million.

'This would also drive some of the economies of scale out of the business which would cost us an estimated $10 million.

'All up, the cost of turning TV1 non-commercial would be $250million. Who is going to pay for that?'

Faafoi has yet to comment in any detail about his plans for broadcasting but, unlike his predecessor Curran, he is sure to give his former boss a decent hearing.

This story was originally published on Newsroom.co.nz and is republished with permission.