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CanWest MediaWorks is looking at ways to finance its two new Freeview digital channels, insisting they can eventually return a profit.
Freeview is to be a new platform for free-to-air digital TV. State-owned TVNZ's channels are to start at the end of next year and early 2008, while CanWest has given no indication when it will launch its channels.
Bosses at CanWest were furious after last week's government allocation of $79 million to TVNZ over six years, for a 24-hour news channel and a general-interest channel called Home on Freeview.
Taxpayers were propping up an unsuccessful commercial company, CanWest said.
The decision is seen as the latest sign of a closer relationship between the Government and TVNZ, with digital TV promoted as a means for it to meet social obligations.
CanWest benefits from direct and indirect subsidies and wants equal access to government money.
But, as the Government has gone ahead with Freeview, it is giving extra help to TVNZ so it can meet vague public-service obligations.
Both CanWest and TVNZ had promised to provide two new channels for the new platform in return for the Government putting $25 million into the Freeview digital satellite and digital terrestrial infrastructure.
CanWest TVWorks chief operating officer Rick Friesen said he was surprised TVNZ got extra taxpayer help funding content on its two channels.
"Maybe we were just naive," said Friesen.
"We want to talk to the Government over the next few months about a return to the level playing field."
He said the digital channels would mean extra content costs. But they were hard to quantify because it would depend on the genres of channels CanWest chose to launch.
"We fully expect that, as the Freeview platform grows, our channels can break even and eventually [be] profitable. But initially there will be little uptake on Freeview and little advertising support," he said.
