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Back in time as Government considers new state broadcaster

The biggest shakeup in the country’s broadcasting history looks to be looming as the Government gets serious about its options for strengthening public service broadcasting.

Mark Jennings looks at the wider implications for the media.

Are we about to return to the days of the NZBC where the state’s radio and television arms reside under one roof? It looks increasingly likely.

A report leaked to RNZ’s political editor, Jane Patterson, seems to suggest that Broadcasting Minister Kris Faafoi favours the idea of creating a brand new organisation as opposed to merging TVNZ’s and RNZ’s existing operations or putting more money in NZ on Air.

NZ on Air controls an $85 million contestable fund that all media can access and bulk funds RNZ to the tune of $39 million.

Faafoi has reacted to Patterson’s story by saying he doesn’t have a favoured course of action and that Cabinet will consider all three options.

As a former TVNZ journalist, Faafoi knows that pushing the two state broadcasters together in a forced merger would be a disaster. The corporate cultures of TVNZ and RNZ are literally 600 kilometres apart.

TVNZ is an Auckland-based, commercially aggressive, market leader with revenue of $310 million. A hundred and thirty three of its staff earn more than $120,000 and the CEO takes home about $1.5 million. 

RNZ is a Wellington-based, advertising-free, public broadcaster that shares its content with other media. It is wrong to categorise its staff as cardigan-wearing but none of them, including CEO Paul Thompson, earn anything like their TVNZ counterparts.

A merger would really be a TVNZ takeover.

Building a new NZBC from the ground up would allow some fresh blood to be brought in and a lot of it will be needed if a new culture is to be established. 

Thompson, particularly, will covet the top job but he has little or no television experience. TVNZ chief executive Kevin Kenrick will struggle to convince a government-appointed board that he is truly committed to public service broadcasting even though he would be capable of delivering to a well-defined public service charter.

The costs will be significant and the synergies will be hard to find. There will be some ‘back office’ savings but the different requirements of  the mediums – television, radio and digital – are such that reducing staff numbers is virtually impossible.

The reality is that RNZ’s Auckland operation would need to move into TVNZ’s Hobson street HQ as the cost of relocating the television operation would sink the idea of a new combined premises almost immediately. 

It is one of the reasons TVNZ decided not to accept SkyCity’s big dollar offer for its building when it was planning the International Convention Centre in Hobson Street

MediaWorks is facing the same issue with trying to sell the city fringe building that houses Three. Any new owner of Three will face the colossal cost, and task, of relocating the channel.

The NZBC model would create some savings by putting together the news operations of TVNZ and RNZ and it could result in better coverage of the regions, which are steadily turning into news deserts.

The $6 million RNZ/NZ on Air Innovation fund recently committed a million dollars for a year-long pilot programme to fund local democracy reporters in places like the South Island’s West Coast and North Island provincial centres like Rotorua.

But do we really need an NZBC structure to save public service broadcasting? After all, the monolithic organisation was split into three parts: TV One, TV2 and RNZ in 1975 after 13 years of operation.  The view at the time was that the different media needed their own expert focus.

Faafoi needs to immediately release the findings of the Media Advisory Group (MAG) that was convened by former minister Clare Curran. RNZ’s Patterson reported that the MAG had concluded the status quo was “unsustainable” and the Government should “disestablish TVNZ and RNZ and establish a new public media entity”.

This insight needs to be shared and scrutinised. RNZ looks totally sustainable, particularly if it were given a decent budget increase like Labour promised at the last election but later reneged on.

TVNZ, according to its CEO, is investing heavily (now that it is allowed to forgo its dividend to the Crown) so it can be a sustainable business. A recent poll indicated that TVNZ’s on-demand service was now more popular than Netflix. It has somewhere around $50 million in the bank that it intends to invest in local content, sport and on-demand programming over the next three years.

With MediaWorks likely to close down its TV network or sell it to a buyer (who will undoubtedly have to scale back the loss-making operation) the future of TVNZ looks reasonably sound into at least the medium-term.

The media that is most “unsustainable” is the commercial sector, not the public sector.

The two biggest players in the market, Stuff and NZME, are constantly shedding staff as they struggle to combat the loss of advertising to Facebook and Google. MediaWorks TV has thrown in the towel and the newer, digital-only operations like Newsroom, The Spinoff and Crux, can’t expand fast enough to fill the coverage holes that are appearing.

The MAG recommended that the new entity provide media services across a variety of platforms, “some of which may be advertising-free”.

Is it recommending reduced advertising because it is listening to lobby groups like Better Public Media, which wants an enhanced viewing experience? Or MediaWorks’ CEO who wants TVNZ’s market advantage reduced?

If it is the latter then it is going to come far too late for the US/Australian-owned company.

The NZBC plan would take at least two years to implement.

The fastest and the best way to help the struggling sectors of the media would be for the Government to put some of the vast amount it might spend on building a new NZBC into NZ on Air.

The media companies with the best ideas and the most cost-efficient proposals would get funding and a wide range of consumer tastes would be catered for. Consolidation of some sort would still occur in the commercial sector but what’s left would be in a much healthier position if there were a bigger pool of NZ on Air funding to draw on.

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