Television New Zealand posted a 36 per cent drop in first-half profit as a slowing advertising market and reduced government funding ate into revenue, as the state-owned broadcaster built up its content library with a jump in programme commitments.
Net profit fell to $12.7 million in the six months ended Dec. 31, from $19.8 million a year earlier, the Auckland-based company said in a statement. Advertising revenue fell 2.1 per cent to $168.1 million, a smaller decline than total revenue which was down 8.3 percent, largely because of a one-off $5.5 million gain on the sale of the national TV archive a year earlier.
Although New Zealand's total market for television advertising revenue decreased 1.7 per cent, TVNZ said it maintained TV revenue market share above 60 per cent.
Total expenses fell 3.9 per cent to $157.8 million, with programme amortisation down 5.2 per cent to $93.7 million and staff costs falling 9.1 per cent to $24.9 million.
TVNZ's commitments to programme rights jumped to $387.8 million as at Dec. 31 from $233.9 million at the end of June and $247.8 million a year earlier.
Broadcasters have been fighting more aggressively for premium content with the emergence of online video streaming services such as Netflix and Spark New Zealand's Lightbox, while at the same time contending with a weaker kiwi dollar pushing up the cost of purchasing foreign programmes.
TVNZ's year-on-year decline in profit is primarily due to increased online competition from global players and the one-off sale of some assets last year.
"Although market demand for television advertising softened slightly over the last six months, continued strong audience delivery has enabled TVNZ to maintain a leading share of TV advertising revenue for the period," chief executive Kevin Kenrick said.
"TVNZ's year-on-year decline in profit is primarily due to increased online competition from global players and the one-off sale of some assets last year."