KEY POINTS:
TVNZ boss Rick Ellis told the New Zealand Herald on Friday: "I'm confident that despite the morass [sic] of visual material circulating the planet, viewers and advertisers will continue to watch TVNZ's traditional channels and our two new ones, because they will trust us to screen what is uniquely important and of interest to New Zealanders."
Confirmation that he was 100 per cent wrong came on the same page of the paper in a story that pointed out TVNZ had lost the rights to screen the 2010 Winter Olympics and the 2012 Summer Olympics in London to Prime and Sky. If the Olympics are not important and of interest to New Zealanders then nothing is. TVNZ has missed out, again, to its biggest long-term rival.
Actually, TVNZ is having a tough time with Sky on several fronts and the future of its business is looking sicker because of it.
The London Olympics coincides with a key date in the evolution of local television announced last week by Broadcasting Minister Trevor Mallard. That is the year when the Government wants to announce when it will switch off analogue transmission and make everyone use a digital set-top box such as Freeview or Sky.
The turn-off date will come six to 10 years after then or be set at a trigger point when 75 per cent of New Zealand households are using the boxes.
Mallard cheerily says that 75 per cent figure might not be too hard to achieve as already 45 per cent of Kiwi homes have digital television. There he is wrong. The overwhelming majority of those boxes belong to Sky. It will be an uphill struggle to reach it by relying on Freeview to rope in the rest of us.
Judging by current progress with the anorexic Freeview, New Zealanders are unlikely to flock to the new free-to-air system.
There are around 1.5 million households in this country. Currently, just over 60,000 Freeview boxes have been sold and it is not clear how many homes might have two or three around the house, making it almost impossible to figure out what overall percentage of homes have swapped to digital.
Also, how many Sky homes also have a Freeview box because the viewer is addicted (God help them) to Parliament TV, or really wants to watch Kidzone or Triangle TV?
Simply offering people what they already get on telly, plus a few channels full of re-runs and surplus programming from output deals will not be enough to convince folk to hurry and spend hundreds of dollars on a box, aerial and installation for Freeview when they can wait another decade or more and not spend a single cent.
Offering high-definition TV will bring in a few people but then Sky is planning its own HD service.
People will outlay money for big mainstream sports coverage, movie packages and porn. Sky has that sewn up (although Sky executives always shudder when you mention the pay-per-view porn channels).
TVNZ is also on the back foot over an amendment to copyright laws going through Parliament. Sky has convinced the select committee concerned that it should have the right to rebroadcast free-to-air channels, like TVNZ's, for nothing.
TVNZ and other free-to-air broadcasters argue they want to be able to charge Sky for being retransmitted on the Sky platform. Currently, TVNZ has a deal that lets Sky transmit TV One and TV2 but that runs out in 2011.
TVNZ would like to set a high price on its rebroadcast rights and is desperately lobbying Parliament to let it do that.
The problem is, viewers may well be the losers. If TVNZ succeeds and sets an extortionate price on its channels, Sky may drop them. That could be good news for Freeview because many of us might then buy a box so as to still get TVNZ.
In fact, TVNZ might deliberately put a huge price on its channels so as to deny Sky its signal, thinking that this will hurt its rival and boost its Freeview system.
The trouble is, many of us may not rush off to Freeview as a result.
We might stay with Sky and decide to be TVNZ-free. How often do you hear the complaint that there is not a lot to watch on TV One or TV2 any more?
Sky's war chest is such that it could buy the "first run" rights to popular international shows, dramatically increasing its pull on TVNZ audiences and leaving the state broadcaster with the dregs of foreign programmes.
If this is handled badly we could end up with two parallel digital platforms, each running its own exclusive channels, with the audience roughly evenly divided between the two.
Does TVNZ really want to halve its audience? And do viewers really want only half of what is out there?
