By LOUISA CLEAVE television editor
Television New Zealand is talking with Sky about joining the pay-TV company's digital service.
The significant breakthrough has been spearheaded by TVNZ chairman Ross Armstrong, who told the Weekend Herald that it was a sensible option to look at for the state broadcaster.
TVNZ has been reluctant to piggyback on Sky's digital service and wanted to set up its own service in competition.
Digital television can provide dozens more channels and interactive services such as online shopping, banking, the internet and e-mail.
TVNZ's digital plans were scuttled by the Government, which has set about turning TVNZ back to its public service roots rather than acting as a commercial company.
Cabinet papers released in May said TVNZ's digital venture would have cost $150 million to set up and the broadcaster would have faced losses of $217 million over eight years.
Dr Armstrong said it was early days in the digital debate and the TVNZ charter was still the priority.
However, the new board was revisiting the digital issue with a clean slate and he had talked with Sky four or five times in the past month.
He said reservations held by chief executive Rick Ellis over joining Sky were "now being broken down."
Dr Armstrong said he had not discussed any proposal with the Government.
"Clearly, digital is some distance away and my brief is to ensure we provide the best possible service, within the parameters of our business, to all New Zealanders."
Sky chief executive Nate Smith said a proposal put to the Government this year still stood.
Sky would not charge TVNZ to carry TV One and TV2 on its satellite service during its present licence term, which expires in 2010.
Subscribers to the digital service, at present 162,000 homes, would also not be charged to view TV One and TV2.
TV3, TV4, Prime Television and Trackside are carried now on Sky's satellite service.
TVNZ would have the option of adding its own digital channels to the service, which it said in January would cost $500,000 a channel each year.
Mr Smith said he was "once again optimistic" of doing a deal with TVNZ.
"While management hasn't fully got its head around it yet, the new board is certainly much more kindly disposed to it."
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