TV3 counting on profit in 2 years

By SIMON HENDERY

Television New Zealand's free-to-air rivals continue to lose money but insist they are not ready to pull the plug on New Zealand.

The state-owned broadcaster's main competitor, TV3, said yesterday it was banking on revamped content - with a focus on local programming - to push it into profit within two years.

The station's Canadian owner, CanWest Global Communications, said the channel's revenue rose 14 per cent to $95.5 million for the year to August 31.

Earnings before interest, tax, depreciation and amortisation more than doubled to $8.3 million, but foreign exchange losses and a $20 million write-down in off-peak programmes in the station's library led to a $19.9 million pre-tax loss.

The chief executive of CanWest's New Zealand operations, Brent Impey, said the programming write-down was a legacy of the 1990s when both TVNZ and TV3 paid too much for shows that were no longer appropriate for primetime viewing.

TVNZ made a similar $27 million write-down in 1997.

CanWest's youth channel, TV4, had an annual operating loss of $4.2 million, up from $3.9 million last year.

Mr Impey said TV3's ratings were improving and he expected the channel to turn a profit next financial year.

The company was focused on turning TV3 around and a revamp of TV4's position in the marketplace "will be looked at down the track," he said.

"The commitment for TV3 is to local programming and we're already doing that.

"Some new series have been announced for the New Year and others are planned."



Mr Impey said the "destructive evolution of television programme-buying in New Zealand" was a big factor in the two channels' losses.

"We pay nearly twice as much for peak series on a per capita basis as Australian networks."

CanWest's local radio interests fared better, with the More FM, Channel Z and The Breeze stations reporting revenue up 14 per cent to $29 million and profit up 6 per cent to $7 million.

Internationally, CanWest Global yesterday reported a $C16 million ($27 million) fourth-quarter loss, which it blamed on financing costs after several acquisitions.

Meanwhile, TVNZ's other main free-to-air rival, Prime, lost $A8.8 million ($11.4 million) before interest, tax, depreciation and amortisation in the 1999-2000 year.

Asked when the New Zealand operation was expected to break even, the chief executive of Sydney-based Prime Television, Brent Harman, said: "What you could be assured of is that we would not be sitting here in two years' time still reporting these losses."