Dialogue: Aim is to match content to TV viewers' interests

By BRUCE WALLACE*

The announcement of the Government's promised draft charter for TVNZ was followed by, less than a week later, the publication of another strong set of financial results by Television New Zealand Limited. TVNZ's 6 per cent increase in advertising revenue signals continued tough going for TVNZ's competitors in the television world. But what is the relevance of a charter for TVNZ in the confusing world of technology change confronting the television industry worldwide?

Those of us who are long-time television practitioners welcomed competition in 1988 mainly because we had experienced the debilitating affects of monopoly state control over the television industry. I do not think any of us, back in the late 1980s, contemplated TVNZ having 71 per cent market share of the five-years-plus audience in the year 2000. All of us thought that vigorous competition would really change the dynamics of the business. The competition has been aggressive but remains distinctly in third place behind TV One and TV2.

At a time when the Government is changing the rules for TVNZ, it is helpful to consider the reasons for this extraordinary hold on the market by the state-owned operator. Minister Marian Hobbs will also find that the commercial culture of TVNZ goes right back to the early days of television because it has always been a commercial medium quite unlike National Radio.

First, TVNZ refined its long-held commercial focus as soon as it had its freedom as an SOE under businessman Brian Corban as chairman and CEO Julian Mounter. The arrival of TV3 and unbridled competition for audiences was new.

Corban and Mounter ingrained a competitive pride right across the TVNZ work-force. For a decade, that approach was endorsed by the TVNZ shareholder. Private enterprise management principles were rightly endorsed.

Secondly, the brilliant invention of NZ on Air took the licence fee money away from supporting the state broadcaster and was, instead, directed at programmes which the market would not provide.

Those funds were opened up to competitive tender by any broadcaster and producer.

Ruth Harley and Merv Norrish's thoughtful and entrepreneurial stewardship of NZ on Air's annual budget changed the rules of the game.

They forced TVNZ to compete for money which had always been under the patronage of the state broadcaster.

As a result, TVNZ made some radical changes to its structure and defined its role as a broadcaster rather than a producer, except mainly in news, sports and current affairs. Within a decade a fair proportion of TVNZ's considerable local content hours were being made in the private sector while TVNZ was winning the vast bulk of the funds available for television.

Thirdly, the Crown, in order to stimulate competition, sold spectrum used for broadcasting to the highest bidder. The result is the multichannel world of today.

In Auckland, many of us have a choice of seven free-to-air stations and those paying for Sky digital get another 25 plus. Internet watchers have a much bigger choice again.

TVNZ has thrived on the competition.

Yet, change is again very much in the air. It is claimed that we have a television system which fails to deliver what the public wants. The charter is intended to address these issues. The problem the Government faces is that TVNZ, by dint of its daily audience share of 71 per cent of all viewers, actually appears to meet the needs of many members of the public already.

Maybe that does not include some minority groups who support the Labour Party but you have to ask who is television for. And, further, should television be engineered in the interests of the Government of the day?

We are also on the verge of a major technology shift as every New Zealand household goes from being analogue to digital. We will be receiving our television pictures in a digital format in future along with lots of other services delivered to the home.

As we have more choices available to us, the audiences for any one of today's existing choices are likely to be smaller. So TVNZ is likely to lose audience market share but not necessarily to its free-to-air competitors. People will be watching more pay-TV and internet-based programmes.

Against this backdrop of dramatic change in the market, I would argue that more competition in the free-to-air television industry no longer needs to be a primary goal of Government policy; we have more channels than any other country of our size. Neither do we need regulations which will further tax the free-to-air television industry's revenues and increase costs to consumers.

So, what do we need to do? This is my short-list of actions for Government:

More investment from the Crown in those programme areas the market will not provide.

Digital free-to-air television needs to be introduced without the risks generated by auction.

Ensure universal access to diverse new services.

Foster a competitive market in pay television.

Ensure no one player controls the set-top box in the home.

These reforms would enable New Zealand to move rapidly into the digital age while keeping our television as local as we can afford.

Somewhere a charter for TVNZ may help but only if it ensures that our television channels are relevant to the needs and interests of their viewers.

* Bruce Wallace is executive director of the NZ Television Broadcasters Council. This is his personal view.

TVNZ draft charter