It's the first time NZ On Air has reported on-demand streaming for TVNZ and MediaWorks programming, as well as broadcast ratings.
Media commentator Tom Frewen said "important but boring" programmes were receiving less funding in favour of shows that attracted better ratings.
They were also being pushed to the sidelines in terms of time slots, such as political programmes The Nation and Q+ A which aired on Saturday and Sunday mornings.
"You've got this dialogue that's really important to the functioning of a democracy but it's sort of sealed off. It's available, but who's going to watch television on a Saturday morning?" Mr Frewen said.
"It's about time they had another look at it and said: 'What's happening here with our public broadcasting money? Are we getting any public broadcasting for it?' And increasingly we're not."
Mr Frewen also felt that funding programmes with the largest ratings failed to identify real talent. "The two biggest breakthroughs as far as New Zealand artists are concerned - Lorde and Flight of the Conchords - never got any NZ On Air Funding, and Flight of the Conchords tried."
The NZ On Air report said there was still no internationally accepted measure of on-demand data, but the information was increasingly important and represented a substantial increase in audience size.
In broadcast ratings, The X Factor NZ fell to ninth place among publicly funded programmes, with an average of 439,000 viewers aged 5 and over, and 10.6 per cent audience share.
It was beaten by Beyond the Darklands in second place, Hyundai Country Calendar in third, and The Investigator Special: Who Killed the Crewes?. Kiwi comedies ranked highly among online viewers, with 7 Days, Jono and Ben at Ten and Nothing Trivial all making the top five streamed shows. None were ranked as highly in broadcast ratings.
Local dramas The Blue Rose and Harry were also popular in on-demand viewing, but failed to make the top 25 in broadcast viewers.
Drama was the most expensive genre funded, costing taxpayers more than $20 million. It was followed by $13 million for children's television.
The Almighty Johnsons was the most expensive programme, receiving $6.9 million of funding.