CanWest in for long haul despite bumps in road

By Karyn Scherer


Seven years after it stepped in to rescue TV3 from receivership, Canadian media company CanWest Global Communications claims to be delighted with its foray into its first foreign market.

In New Zealand this week to meet with staff and advertisers, president and chief executive Peter Viner insisted the company had already learned a lot from its New Zealand investments and was optimistic it would continue to see growth in this part of the world.

Since dipping its toe into the New Zealand media market, CanWest has also expanded into Australia, turning around the struggling Ten Network, and has also launched a private TV channel in Ireland.

Although its performance in Australia has been spectacular, New Zealand has proved more problematical in recent years, with a plunge in profits last year from around $20 million to just $12.5 million.

Mr Viner said the company was undeterred by such "bumps in the road".

"While I wish the networks were doing a bit better, 50 per cent of the reason they aren't is because the economy is a bit soft. It's a well managed operation. I'm confident we're going in the right direction, but because the economy is such a big factor in the success of media companies you have to adjust to keep your eye on brands."

There were no regrets about launching TV4, although it was still unclear when it was likely to make a profit.

"Do I wish it was more successful? Yes, but I also wish the economy was a lot stronger. If it was, I'd be talking about what a terrific return on investment it was.

"It's not losing huge gobs of money and the overall television company is very profitable and the overall media company is very profitable. We certainly have the capacity to invest as long as it takes."

After a difficult period for both channels, advertising now appeared to be picking up again.

Mr Viner said the company was also delighted with its decision to buy the More
FM group of radio stations, whose performance had already exceeded expectations.

The company has coped with the slow economy by outsourcing as much local production as possible. Like all media companies, it is also eyeing new revenue sources, such as the Internet and infomercials.

"We're in the business of selling attractive audiences to advertisers, so that gives us considerable scope and now that we own 100 per cent, there's an enormous amount of opportunity, both in New Zealand and in the region."

However, CanWest was happy to let TVNZ lead the way on digital TV, he said.

"In every venue, this is driven by governments who feel that by telescoping the spectrum, there's one day going to be a big payday by auctioning off the surplus."

Mr Viner said Canada had been "completely swamped" by American television, and he believed the same thing was likely to happen to New Zealand with digital TV.

"There will be more choices available but the consumer will have to pay more. There will not be significantly more choices available free because the economics just don't work."

While TV3 and TV4 acknowledge TVNZ as a fierce competitor, Mr Viner said he still believed TVNZ's strength was largely due to its stranglehold on international programming.

"What's let us down is our international product.

"To some degree you're at the mercy of their product for that year. What we've done to offset it this year is invest more in domestic programming."
He confirmed CanWest would still be keen to get its hands on either TVOne or TV2, but it was not holding its breath.

While he conceded TVNZ had done well to increase its audience share for the first time since CanWest entered the market, he couldn't resist taking a swipe at its financial performance.

"TVNZ, in my eight-year experience, is probably better managed than it has ever been, and more focused and I congratulate them. Having said that, if I had 75 per cent of the market like they do, I'd be circulating my CV."