Dialogue: Not enough money, too little time for quotas

The Government's commitment to broadcasting quotas is wavering. Now they are likely to be purely voluntary, writes PAUL NORRIS*.

The Q-word is back on the broadcasting agenda. Quotas. The idea is that radio should be compelled to devote a percentage of its airtime to New Zealand music, and that television, likewise, should find space in schedules dominated by American, British and Australian shows for minimum levels of New Zealand programmes.

The Labour Party pledged to introduce broadcasting quotas in its election manifesto before the last election in 1999. But now, it seems this commitment is wavering.

At the conference of the television production industry (Spada), the Minister of Broadcasting, Marian Hobbs, drew howls of protest when she admitted that the Government now had a problem with quotas; not with the philosophy, but with money and timing.

As ever, the problem is more with television than radio. The radio industry, driven no doubt by the threat of a compulsory quota, has steadily increased the amount of New Zealand music played - from 6 per cent in 1997 to more than 10 per cent at present.

The Government has proposed a voluntary regime under which the New Zealand music target will rise to 25 per cent in five years. The industry will accept this in preference to a compulsory quota.

But television has a tendency to magnify every conflict, and quotas are no exception. The case for a quota would seem overwhelming. New Zealand television has one of the lowest levels of local content in the Western world - just 24 per cent of programmes overall are New Zealand-made.

This is partly because there is so much English-language programming readily available at reasonable prices. As a consequence, local programming is much more expensive than imported. Local documentaries are perhaps 10 times more costly, local dramas even more so.

NZ On Air has enough money to part-fund only about 20 per cent of local programme hours. So for the Government to impose a quota on the television broadcasters would be to impose considerable extra costs.

Spada's own detailed proposal for a local content quota of 30 per cent, sent to the Government 18 months ago, had a price tag of some $20 million.

Who should pay - the Government, which means the taxpayer, or the broadcasters?

Then there is a further complication arising from the Government's broadcasting policy. It has given the state-owned broadcaster, Television New Zealand, a new set of riding instructions. No longer is it to be driven by ratings and profits. Now it is to be governed by a charter, requiring programmes that reflect our identity and culture, our history and heritage, as well as the arts, and Maori and minority interests.

Almost all the charter requirements mean an increased emphasis on New Zealand programmes. So for TVNZ the idea of a quota is redundant. In following the charter, it would almost certainly meet any minimum levels of local programming set by a quota.

The issue remaining is what to do about the private broadcasters, especially TV3 and, to a lesser extent, Prime and the pay-TV operators, Sky and TelstraSaturn. Here we must come back to the additional costs a quota would impose on these broadcasters.

The reality is that they cannot afford to bear any significant extra costs. None of the private broadcasters is making a profit. TV3 made an operating loss of $12 million last year.

So it is hardly surprising that TV3 screened little New Zealand drama or comedy last year. Even if NZ On Air agrees to finance a project, this will be limited to a proportion of the total costs.

Last year NZ On Air paid for just under half of the costs of the dramas in which it was involved. The broadcaster must find the rest, and if the show does not rate as well as a cheaper import, the broadcaster will have lost potential advertising revenue.

For these reasons, the private broadcasters, led by CanWest, the foreign owner of TV3, are adamantly opposed to a compulsory quota. They have been lobbying so effectively on this matter that Marian Hobbs announced CanWest would walk away if a quota were imposed.

It might accept the imposition if the Government provided more public money to fund the additional New Zealand programmes required, but it is extremely sceptical that will happen. The minister citing money as a problem did nothing to allay such scepticism.

Broadcasting has a funding crisis. There are simply too many demands for public money. With the demise of the broadcasting fee, the Government must fund NZ On Air (some $83 million annually) from taxation. Then there is Maori broadcasting, with some $27 million going to Te Mangai Paho and an additional $28 million set aside for the forthcoming Maori TV service.

The Government also seems determined to introduce a non-commercial Youth Radio Network ($2.5 million a year after set-up costs), despite vigorous arguments from the industry that this will be money wasted and that the interests of youth can be better served by commercial stations.

But perhaps the biggest financial pit is the restructured TVNZ. Barely profitable now, it is likely to move into loss as it implements the charter.

It is already looking to the Government for assistance to fulfil the charter objectives. For its part, the Government has acknowledged that significant additional funding will be required. No figure has yet been established, but expect from $10 million to $30 million a year.

Add all this up and you can understand why Marian Hobbs has sent CanWest to see the Minister of Finance, Michael Cullen. Ultimately he and his cabinet colleagues will determine the fate of quotas.

The Prime Minister is a firm supporter of the arts but she, too, is aware of the tightening budgetary noose.

Are there votes in quotas? Probably only from the hard-pressed television production companies. Expect the Government to back away from mandatory quotas and a voluntary scheme to prevail.

As if all the above were not enough, there is one other reason why any broadcasting quota will have to be voluntary. In world trade negotiations in 1994, the National Government signed away New Zealand's right to impose restraints on the free market in audio-visual content. And CER does not allow us to discriminate between New Zealand and Australian programmes.

Will the Government be willing to overturn these agreements for the sake of a broadcasting quota? Almost certainly not.

* Paul Norris, a former senior TVNZ executive, is head of the Christchurch Polytechnic broadcasting school.