TVNZ/RNZ merger back on after election but rationale remains sketchy

Thursday, 22 October 2020

Former TVNZ chief executive Kevin Kenrick said in 2019 that he believed the business case for a new public media entity needed to focus on 'substance'.

The Government appears set to press ahead with the merger of TVNZ and RNZ into a new public media entity despite criticisms that it hasn’t explained what it would do and why it is being considered.

The development of a business case for the merger was put “on ice” in April after the onset of the Covid crisis and in the wake of headwinds from coalition partner NZ First.

Speaking at an event hosted by lobby group Better Public Media shortly before the election, Broadcasting Minister Kris Faafoi said Labour was committed to working to create a new public media entity if it was re-elected.

“We think moving towards a single media entity that is strong, multi-platform and independent is extremely important,” he said.

* Coronavirus: $50m government package to help media through crisis

TVNZ and RNZ would be combined, though it is not yet clear what they would do differently.

* National says 'giant' new public media entity could threaten diversity of voice

* TVNZ chief executive Kevin Kenrick breaks silence on public media merger

“We are asking to be returned to office to continue our work on reshaping public media; we have the commitment to that work and we are recommitting to it in our next term,” he said.

Broadcasting Minister Kris Faafoi made it clear Labour would press ahead with work to create a single public media entity if successful at the polls.

In September, the Culture and Heritage Ministry released the partially-completed business case for the media entity that had been drafted with the assistance of consultant PWC before work stopped in April.

However, the partially-redacted 89-page “final draft strategic and economic case” did not spell out the benefits of combining the broadcasters into a single entity or state how TVNZ or RNZ’s services would change if the proposal was approved.

“What is clear in this changing environment is that scale and content quality would help and this is unlikely to be achieved with each of the Crown’s owned media organisations working on its own,” it said in what appeared to be its most directly relevant comment.

National Party broadcasting spokeswoman Melissa Lee said during the pre-election debate that the process had not been open and transparent and had instead been “flawed from the beginning”.

Faafoi told Stuff that before any decision was made, the Ministry of Culture and Heritage would be “retesting assumptions and analysis to-date to ensure they remain accurate in a post-Covid-19 environment”.

Research previously conducted by a ministerial advisory group found that “the rigid and separate structures” of the public broadcasting system had restricted the sort of evolutionary change that overseas public broadcasters had used to better position themselves for a converged future, he said.

“My view remains that we will need to move beyond the current public media structures.”

Better Public Media director Myles Thomas fears the merger could be a “recipe for disaster”.

But Better Public Media director Myles Thomas agreed the Government had “definitely not” explained the case for the new media entity well enough.

“We assume the RNZ/TVNZ merger is going to go ahead.

“The big question is around advertising; will RNZ remain advertising-free and TVNZ still have adverts, and how is that going to work because if it is all under one roof it seems like a recipe for disaster,” he said.

Better Public Media hoped the Government would “put their money where their mouth is” and ‘de-commercialise’ TVNZ, he said.

That would appear to run counter to the desire of TVNZ chief executive Kevin Kenrick, who wrote to advertisers last year when the plan for the new media entity was made public.

Kenrick told advertisers TVNZ was “100 per cent committed” to continue delivering cost-effective opportunities for businesses to engage with its audiences.

“You can be assured that TVNZ and the Commercial Communications Council have reinforced the need and value of television advertising platforms and opportunities for New Zealand business to build brands and promote products and services,” he said then.

Kenrick told a select committee in February that he expected the business case for the new public media entity would focus on the “substance” of the proposal.

In what appeared to be pointed comments, Kenrick said “all you are going to get out of a new structure is ‘a structure’”.

“It is actually what it does and what it delivers and how it impacts audiences that will determine success.”

The other main leg of Labour’s media policy is to inject more funding, through NZ On Air, into “public interest journalism” to protect journalism jobs that would otherwise be lost due to Covid.

No dollar numbers were published in Labour’s manifesto but RNZ reported that Faafoi had told the E tū union that $75 million would be provided over three years.

During the pre-election debate Faafoi put the emphasis on public media but said the Government was “not opposed to supporting private media”, adding it was “easy for smaller entities to get forgotten amongst all this”.

“We have set a path for public media but also know Covid has created challenges for the wider media market – we want to help the media market in a strong public media environment,” he said.

Thomas said TVNZ appeared to be one of the main beneficiaries of “a fairly random and arbitrary” $50m aid package offered mainly to broadcasters in April, while Stuff would have got very little benefit.

“If I was Stuff I would be thinking ‘what about us?’,” he said.

TVNZ said at the time that it got about a $6m benefit from the April aid package, which was also believed to have significantly assisted television channel Three owner MediaWorks and to a lesser extent Sky Television and NZME.

Plans for a second round of assistance prior to the election did not come to fruition.