PAUL NORRIS* says that Television New Zealand's digital and pay TV initiative is more about long-term strategy than the instant benefit of more choice for viewers.
Television New Zealand has been pushing the news that it's going digital for all its worth, but the real question is: what's in it for viewers?
Here is TVNZ expecting viewers to buy a satellite dish at, say, $200, and a decoder, popularly known as a set-top box, at, say, $300. For what? To be able to receive a digital version of TV One and TV2, and possibly TV3, TV4 and Prime, and maybe a Maori channel.
Retailers of dishes and boxes should not expect a rush. Viewers won't have to go digital for 10 years or so. The present analogue channels will continue until a switch-off date, to be decided by government.
Take-up will also be hindered by customer confusion over multiple boxes. If you already have a Sky digital box and want to receive TVNZ digital, you will need a second box. The Sky box will not be able to decode the TVNZ channels.
What is more, box technology is moving fast. Just like a personal computer, it will have to be replaced by a better and smarter model in a couple of years.
In due course, an open-access box should be able to receive programmes from rival companies. Hardly an incentive for viewers to splash out and buy now.
If you are one of those who live in a remote area and cannot get one of TVNZ's channels, or are in difficult terrain and suffer bad reception, you might be tempted by the TVNZ offer because digital satellite can bring a brilliant picture and crystal-clear sound to households anywhere in New Zealand.
Yet there are probably fewer than 30,000 homes with those problems - not a large market for TVNZ to target.
But there are large numbers of households not yet connected to the internet and so not even on e-mail. If TVNZ were to offer free e-mail and internet access as part of the satellite package, this might prove a draw to families who don't own a computer but who would happily surf the net on their television set.
This could reduce the digital divide between information-rich and information-poor but, in practice, web television is rather slow and clumsy. It has been available in the United States for some time, but sales have been sluggish.
Moving right along the TVNZ Aladdin's cave, what about interactive programmes, where the viewer shakes off the couch-potato role and answers all the questions on Who Wants to be a Millionaire without ever using a lifeline, or selects the camera angles on the netball (about the only major sport TVNZ still has)?
Interactive programming is very much in development. It may become a whole new viewing experience sometime, but right now it's not going to do much for TVNZ's profits.
Then there is a range of pay television channels to be offered by the joint venture between TVNZ and Telstra Saturn. These will be available on the TVNZ satellite, accessible through the TVNZ set-top box, for a monthly subscription. But the Saturn package of pay channels is hardly competitive with the Sky package.
Sky has paid big money to create both its sports and movie channels, the key drivers of pay television. Worldwide, those channels are the reason viewers subscribe to pay television.
Saturn's package is undistinguished and offers some of the same channels as Sky, such as CNN and Discovery. So it is hard to see viewers signing up in droves for digital pay television with TVNZ-Telstra Saturn.
If viewers are likely to be largely unmoved, how can this deal have a future?
The answer is that the deal is not about tomorrow or even next year. It is about long-term positioning, about TVNZ putting a stake in the digital landscape, about TVNZ finding a partner to bear much of the risk of taking on Sky in the competition for subscribers for pay and interactive services. The deal is a foundation stone for a strategy to reap reward some years out.
The Government should be well pleased. In the absence of any adequate government policy on digital, TVNZ has come up with a way of securing its digital future and maintaining its value as a state asset.
It has also ensured there will be healthy competition in the digital era and that it will not be in a subservient position to a rival operator who happens to be part of Rupert Murdoch's global empire.
It has done all this with a minimum of investment at this time - at about $10 million it is below the level that requires formal approval from the Government.
This contrasts with TVNZ's previous digital plan, turned down by the Government as too risky, which called for more than $200 million of investment. The other problem was that the Government did not want TVNZ getting into pay television in opposition to Sky, apparently preferring TVNZ to come to a deal with Sky over the carriage of TVNZ's channels on the Sky satellite.
Yet here we have TVNZ in clear opposition to Sky. The previous plan had TVNZ in a joint venture with British cable giant NTL to develop pay channels. Now we have TVNZ in a joint venture with Telstra Saturn to develop pay channels.
It is hard to see any meaningful difference here. TVNZ is describing itself as a supplier of programmes and content to pay television, but some may regard this as entering pay television by stealth.
The deal could also, ultimately, be seen as a prelude to privatisation by stealth. Imagine if the Government were to lose the next election to a National-Act government resolved to sell TVNZ at the first opportunity. Would not Telstra Saturn be well placed to acquire the whole of the company with which they have been working so closely?
This may be a better prospect for New Zealand broadcasting than a sale to Rupert Murdoch.
But this scenario, likely or not, should serve as a gentle reminder to the Government not to be distracted by the deal from the pursuit of its objectives on the content of broadcasting.
If it is concerned about the programmes, it had better get the TVNZ Charter into law without delay, and a local content quota, too, for that matter.
* Paul Norris is the head of the broadcasting school at the Christchurch Polytechnic. He was a senior executive at TVNZ from 1987 to 1996.
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