$14 million sacrifice over digital TV

By KARYN SCHERER

The Government's decision to halt Television New Zealand's ambitious plans for digital TV has seen the state-owned broadcaster write off nearly $7 million in its latest accounts.

The sum, which is even bigger than its payout to former presenter John Hawkesby, was revealed yesterday in the broadcaster's accounts for the six months to the end of December.

These show $5.9 million has been written off as a result of the dispute with Hawkesby.

They also show that the broadcaster has so far spent more than $14 million developing its plans for digital TV, and is now resigned to the fact that much of the money has been wasted.

TVNZ had hoped to set up a joint venture with British-based cable giant NTL, which would have seen viewers offered a wide array of digital services later this year, including a pay TV service, e-mail and Internet access.

The Coalition put the plans on hold last month, saying it was concerned about their scale and cost.

A Treasury report is understood to have raised serious questions about the viability of the project, which was expected to cost more than $200 million over several years.

TVNZ's board confirmed yesterday that it had decided to write off $6.8 million, including legal fees, consultancy fees and research costs already associated with the project.

However, the broadcaster is still managing to pay the Government a dividend of $15.1 million, after earning a bottom-line profit of $21.6 million.

TVNZ managed a result of $29.9 million for the same period the previous year, but it notes in the accounts that it also achieved "significant growth" in advertising revenue as well as undertaking a record amount of coverage of special events such Apec, the Rugby World Cup and the millennium.

It has also revealed that its two channels are enjoying their highest ratings in more than four years.

Despite intense competition from several new players such as Prime, TVNZ has boosted its overall share of the free-to-air television audience from 69 per cent to 76 per cent over the past three years.

However, the boost comes as little comfort to its new political masters, who have indicated that they want TVNZ to focus less on ratings and more on what they describe as "quality television."

Questioned yesterday about her plans for TVNZ, Broadcasting Minister Marian Hobbs said she was writing to the board to outline the Government's expectations.

Ms Hobbs also indicated that she wanted TVNZ to "move on" from the Hawkesby saga, saying she was satisfied with the reasons given by new chairman Dr Ross Armstrong for settling with the former presenter.

She was unable to say what would happen to the dividend payment.

"Whether we reinvest that dividend with TVNZ or in another broadcasting area ... is a decision yet to be taken."