TVNZ-RNZ merger another broadcasting train wreck?

Updated February 14 

The RNZ Concert programme train wreck is but a prelude to what is likely if the proposed RNZ-TVNZ merger goes ahead.

The Government has asked PWC to flesh out a plan that doesn’t stack up.  But we can be 100% confident that PWC will find the proposed merger is viable when they report to the Government mid 2020.  Consultants rarely produce reports the customer don’t like, and unlike the private sector, this one will be taxpayer underwritten, and we know what that means.

While in a small democracy and economy, I accept there is a case for a publicly owned broadcaster, it should exist alongside a thriving private media, which at present is in deep trouble as foreign digital media hoovers up most of the digital advertising, without providing any real NZ content.

RNZ is taxpayer funded directly through NZ On Air, with the Minister setting the amount.  It is thus viable for so long as the taxpayers are willing to fund it.  TVNZ is mostly dependent on a shrinking advertising base, but is indirectly funded through the contestable NZ On Air money, provided to producers for programmes shown on TVNZ.   TV3 also has programmes supported by NZ On Air, but is losing money, while Prime is supported by pay TV operator Sky, which itself is struggling.

It is important to remember that apart from news and current affairs, the future of TV/video is streaming.   TVNZ On Demand is going brilliantly and I note Sky’s streaming is also doing well.  People who support public broadcasting should forget about selling say TV2 and making the commercial TV1 into a so called public channel.  Its about content on demand not channel numbers.  Netflix doesn’t have a channel.

There are two viable options for TVNZ – one incremental and the other radical and very expensive.    

Incremental

First, change the Broadcasting Act 1989 to provide for the Minister to direct NZ On Air to bulk fund TVNZ along the lines already done for RNZ.   A one word (“TVNZ”) addition to section 44 (1A), would allow the Minister to direct NZ On Air to directly fund TVNZ, as it does with RNZ.   There is no need to introduce a Charter for TVNZ because the existing legislation gives NZ On Air sufficient power to influence the usage of its (i.e. the taxpayers) money.

Next, remove TVNZ from the contestable funding allocated to other media.  Finally the Government will need to set the quantum of NZ On Air money allocated directly to TVNZ and also the contestable fund.  It’s likely an increase in the current total will be required.

The incremental option is my first preference because it will cause zero disruption to TVNZ, RNZ and private media, and can be done very quickly.

Radical options 

Either merge TVNZ and RNZ into one non-commercial taxpayer funded broadcasting operation, or simply make TVNZ non-commercial.

  1. Funding a non-commercial three channel TVNZ would be extremely expensive (maybe $250 million pa).All programmes would be available on TVNZ On Demand, which is very successful and is the pathway to the future for NZ content.
  2. The private sector might survive if TVNZ is non-commercial, even if all taxpayer funding of private TV/video outlets was ended, the logical consequence of making TVNZ non-commercial.

The Government proposal

The Government proposal is for RNZ and TVNZ to be merged and to be funded by tax revenue and commercial sources, but non-commercial RNZ will stay that way.

Under this proposal NZ On Air will continue with a contestable fund for the private sector and be the route through which RNZ would continue to be funded.  TVNZ itself would also be funded through NZ On Air, but it is not clear whether this would be directly or through the contestable fund in competition with the private sector.

This proposal is a potential train wreck and should be abandoned.

  1. The synergies between radio and television operations are much less than many outsiders assume.I have worked for public broadcasters in NZ, Australia and the UK and in all cases staff were substantially employed for either radio or TV, but not both.  Even in news and current affairs this was the case with operations often several kilometers apart.  Today we have some news and current affairs simulcasts in broadcasting, but am not aware of this happening with drama or light entertainment.
  2. As noted in the Cabinet paper, the cultures of TVNZ and RNZ are seriously different.Putting them together would be seriously challenging, and if TVNZ remained substantially commercial, virtually impossible to achieve successfully.  If TV and radio staff were kept in separate compartments the few synergies possible, would not be achieved anyway, so why do it?
  3. Mergers in any industry tend to cost more than anticipated and achieve less.In the case of the public sector the problems are greater because of the processes involved.  Disestablishing TVNZ and RNZ and creating a new “NZBC” would mean hundreds of technical redundancies, IT costs etc, to say nothing of the disruption of doing this over three years as envisaged in the Cabinet paper.
  4. Media diversity would be diminished if RNZ and TVNZ were to be merged.Given the way the private media is struggling the thought of an integrated state media operation dominating the news scene is scary.  It would be a dangerous concentration of power.  Statements that editorial independence (from the Government and Directors) would be enshrined are good, but wouldn’t stop a committed integrated media operation from running its campaign say against or for, a political leader.
  5. Minister Kris Faafoi is seriously naïve in believing the new merged entity would be nimbler than RNZ and TVNZ. Larger enterprises by nature are less nimble than smaller ones.  I see TV3 as more nimble than TVNZ, because it is smaller and leaner.  It has taken more risks as shown by its success with NZ comedy.

Broadcasting policy should be a cross party matter with widespread public support.  We will all lose if the media itself becomes an election issue.  Kris, it’s time to press the reset button.  Learn from the Concert programme disaster.

Declaration:  In the 1970s I worked for the NZBC, ABC, UPITN, NBR and the BBC, was a director of TVNZ 2011-2017, and listen over the internet to the ABC, BBC and other public radio.

6 thoughts on “TVNZ-RNZ merger another broadcasting train wreck?

  1. You’ve summed it up very well Barrie. Why on earth do people think creating a dominant public sector player is going to be successful long term? We need to retain the minimal pluralism we have in NZ media, not just for reasons of diversity of editorial views but also for facilitating innovation.

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  2. The elephant in the room is funding. Your incremental and radical options are way better than the model PWC is being asked to ‘validate’, but increased funding of public media is not a vote catcher and I suspect Faafoi has already lost that battle. How exactly do you get an extra $150-$250m for non-commercial TV with the Housing Minister in the room?

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    1. Whatever the option including mine and others, they will cost more than the status quo. Sadly, if we believe the democratic model requires a well informed electorate, I cannot see an alternative to more funding. I am an economic rationalist keen to see lower tax rates and more constraints on government spending.

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