John Drinnan 's Opinion

John Drinnan is the Media writer for the New Zealand Herald.

John Drinnan: What's the point of TVNZ?

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TVNZ is taking less risk in its programme-buying, but says content costs for commercial fare are going up. Photo / Greg Bowker
TVNZ is taking less risk in its programme-buying, but says content costs for commercial fare are going up. Photo / Greg Bowker

Politicians and Television New Zealand bosses have been pointing out since the Television New Zealand Amendment Act in 2011 that it is focused purely on making a profit.

Having shrugged off its limited social obligations and with the media sector in a revolution you would hope it will deliver a more meaningful profit sometime soon.

If we're losing out on content and programming risk-taking they need to make more bucks.

Yesterday TVNZ announced an after-tax profit of $14.4 million for the year ended June 30, noting proudly it was $400,000 ahead of targets.

Chief executive Kevin Kenrick, with an eye on market realities, leads a company applying the classic formula of cutting costs and aiming for more ad revenue.

The state broadcaster has taking a bigger share of advertising - but from a diminishing TV ad market.

Ad revenue dropped by $6.6 million or 2.1 per cent last year.

TVNZ is taking less risk in its programme-buying, but says content costs for commercial fare are going up.

After the earlier failure of TiVo and its slow to catch on investment in Igloo, TVNZ is now applauding its own success with digital developments such as TVNZ on-demand.

But as TVNZ expands its digital offering - amid a proliferation of new media to challenge its profits - it is worth asking what is TVNZ for?

The property sale which saw TVNZ play a role in the Sky City convention centre deal was tucked inside the latest results.

SkyCity paid $10.6 million for land owned by TVNZ, but TVNZ faces millions of dollars in refurbishing costs at its network centre to fit staff forced to move out.

The Government has given TVNZ dividend relief for three years starting this year with TVNZ absolved from an estimated $10 million annual dividend.

Dividend relief will continue in 2014 and 2015, subject to dividends and the cost of refurbishment.

So taxpayers wind up subsidising the supposedly free convention centre, while TVNZ faces pressure to make profits. But then it all goes towards the important target - the survival of TVNZ.

- NZ Herald

John Drinnan

John Drinnan is the Media writer for the New Zealand Herald.

John Drinnan is the media writer for the New Zealand Herald. A business journalist for twenty years, he has been editor of the specialist film and television title "Screen Finance" in London, focussing on the European TV and film industry. He has been writing about media in New Zealand since the deregulation of the television industry in the late 1980s. He is focused on the business side of the digital revolution in media.

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