Big call coming on whether to merge TVNZ, RNZ and make TV One commercial-free
Friday, 16 August 2019
OPINION: The Government appears to be getting closer to making a decision on whether to merge TVNZ and RNZ and turn TV One into a commercial-free channel.
One of the best barometers of whether something significant may be about to go down in the industry is the degree to which television channel three owner MediaWorks happens to be screaming blue murder.
And by that measure, at least, there seems to be a clear expectation that we are on the verge of something big.
MediaWorks boss Michael Anderson last year warned a ministerial advisory committee that it might need to pull out of television if government policy settings didn't change.
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It has been reviving memories of that threat over the past day or two.
MediaWorks' Newshub news chief Hal Crawford published a column saying television in New Zealand was 'broken' and that could have a big impact on 'news' in the country.
'I'll be damned if I lay off one more person or say 'no' to one more important assignment without expressing it.'
He doubled-down in an interview on Magic Talk, saying the situation was grim and that MediaWorks needed to 'sound the alarm'.
The trigger for the latest angst has been TVNZ's announcement that it expects to run a deficit of $17 million during the financial year ending in June next year, and will be excused from paying dividends to the Government for the foreseeable future.
MediaWorks sees the dividend policy as putting TVNZ at an unfair advantage.
We may have to wait until the end of August, when TVNZ reports its results for the year just gone to see how much the broadcaster may have been impacted by a decline in advertising.
It is just six months since TVNZ chief executive Kevin Kenrick was telling a select committee the company had more 'fiscal headroom' and 'more confidence about our ability to have a more stable business and therefore to place some bigger bets'.
Regardless, the new dividend policy signals the Government is giving the green light to some sort of fresh investment in public broadcasting, which could be either negative or highly positive for MediaWorks and other media companies, depending on the details.
What probably shouldn't be overlooked, is that Kenrick and Broadcasting Minister Kris Faafoi appear in agreement that public service broadcasters need to step up their game in the online news market.
In February, Kenrick went as far as saying online local news reporting 'had to be key' to its future plans.
'We have got the market-leading TV news. But we haven't translated that into a leadership position in digital news and so we need to find some solutions around that. News is so critical to us that we have to accept that what we have done so far has not been enough,' he said.
An acquisition of Stuff's website by TVNZ might have been a solution, but now that it appears that Stuff's Australian owner Nine will be hanging on to Stuff for at least a while longer, that seems off the table.
Speaking to RNZ last week, Faafoi said the Government had told TVNZ there were things it needed to invest in internally 'so if there is a profit pump it back into that'.
'Every media entity is wanting to make sure it is strong in digital platforms,' he added.
In the same podcast, Faafoi stonewalled when asked whether he would rule out a merger of TVNZ and RNZ and said he was having a good look at public broadcasting to make sure it is fit 'not just for now but for the next 25 to 30 years'.
That's an incredibly long time horizon in the media industry right now, but Faafoi isn't a politician who is prone to hyperbole or blather, so it would suggest the Government is looking at pulling a colony of rabbits out of the hat.
One challenge for Faafoi is how to allow public media to invest in new online initiatives without sending what remains of independent journalism packing.
MediaWorks' television business hasn't been haemorrhaging money of late, but nevertheless appears incapable of turning a profit unless some change occurs in the industry.
Its threat last year to pull of out of television entirely can't be lightly dismissed as a bluff.
MediaWorks has made it clear it would love TVNZ and RNZ to merge and for TV One to go non-commercial. It would enable MediaWorks to grab a larger share of television advertising.
Could that be the sensible 'quid pro quo' for TVNZ getting the green light for a new investment in the digital sphere?
And would Kenrick, who is regarded very much as a commerially-oriented chief executive, stay on in such a scenario or move to new turf?
More problematically perhaps, what impact would a deeper push by TVNZ and RNZ into digital mean for NZME and Stuff, and how could they be at all assuaged, given they don't sell television advertising?
Faafoi revealed last year that the Government had attempted to estimate the cost of making TV One 'non-commercial'.
He said the numbers were 'hard' and the briefings and advice the Government had received suggested it would be 'very challenging in a fiscal sense to achieve'.
It would deliver on Labour's election mandate to create a non-commercial television channel, originally under the RNZ-plus banner.
And if the Government really is looking 30 years ahead, then the cost of losing free-to-air television advertising revenue might not seem so significant.
Yet there appears no simple solution that doesn't risk setting off a chain reaction of further required interventions, which is perhaps why there seems to have been no final decision from ministers so far.