Impending layoffs due to efficiencies, says TVNZ boss

Rick Ellis. Photo / Getty Images

TVNZ has confirmed at least another round of layoffs this year but chief executive Rick Ellis says they are due to savings made from new digital technology and are not related to the advertising downturn or financial results of last week.

The state television company last week issued figures for the year to June 30, showing underlying profits of $13 million with advertising revenue down 4.7 per cent.

Ellis said the job cuts would affect backroom technical staff "working in the bowels of the building" and were due to the digitisation of the process handling programmes. The number of cuts was still being evaluated but would be known in October, he said.

Meanwhile, in another sign of the times at TVNZ, Ellis said he would consider putting more TVNZ channels on the Sky pay television platform SkyTV.

The decision to use archived material - some of it taxpayer-supported - for a channel available exclusively to pay TV customers caused controversy this year. Under the deal TVNZ picks up a share of Sky TV's subscription revenue based around viewing levels.

Putting the channel on Sky rather than advertising-supported Freeview has boosted pay TV over the free-to-air sector.

The underlying $13 million profit was up compared with $10.1 million the previous year but advertising revenue fell by $14.1 million to $284.3 million.

Restructuring costs - incorporating redundancy costs - were $944,000 compared with $3.7 million last year.

Ellis played down the effects of a write-off in which the value of some of its vault of programming was cut by $26.9 million.

As a result of this and a one-off impact of tax changes, TVNZ ended the year with a deficit of $26 million.

TVNZ paid the Government $4.87 million, an uplift on the previous year's dividend of $1.47 million.

TVNZ reported total revenue of $355.3 million. Total operating costs were $342.4 million, a reduction of $32.3 million (8.6 per cent) on the prior year.