Chris Keall talks to TVNZ CEO Simon Power about the broadcaster's first half result - and life after the abandoned merger with RNZ.
Video / NZ Herald
TVNZ has reported a net profit of $4.8 million for the six months to December 31.
That was a two-thirds fall from its net profit of $15.2m in the first half of the 2022 financial year, which itself was less than half the $33.9m booked for the first half ofthe state broadcaster’s 2021 financial year.
A reported $23m-plus was spent on consultants and other costs associated with the abandoned merger with TVNZ.
But nearly all the tab was picked up by the Government.
“Between March 1, 2022 and January 13, 2023, TVNZ incurred $1.165m on the project,” a TVNZ spokeswoman said.
“Some of this is eligible for reimbursement by the Ministry for Culture & Heritage.”
Instead, the profit dip was pinned on a $12.2m increase in operating expenses.
“This increase reflects an investment in people as well as a renewed investment in TVNZ’s digital future, which was accelerated after a pause during the Covid-19 period,” the state-owned broadcaster said in a statement.
Revenue fell 2 per cent to $180.3m as income from advertising dropped 1 per cent to $171.3m. CEO Simon Power told the Herald a fall-off in government Covid advertising was a factor.
And TVNZ warned in a statement: “Inflationary pressures and interest rate increases are likely to deliver a softer domestic advertising market through the remainder of 2023.”
No dividend was paid to the Crown (none was paid in the first half of the prior year). A spokeswoman said a dividend would be considered after the full-year result.
Power said the abandoned merger had not weighed on the first half operationally.
“We were clear from the outset that until the ANZPM [Aotearoa New Zealand Public Media] legislation passed, we would continue to work to our current TVNZ mandate,” he said.
TVNZ CEO Simon Power. Photo / Brett Phibbs
“The challenges facing our media sector have not disappeared, and while ANZPM will not be the vehicle that addresses these challenges, it’s clear that we need to move faster and make bold choices to continue to play an important role in New Zealanders’ daily lives,” Power added.
“A lot was gained through the ANZPM process, including a close look at public media and our sector more broadly. These insights will help inform TVNZ’s strategy and direction.”
Those public broadcasting insights notwithstanding, Power’s highlight for the first half was a commercial one, with the CEO highlighting gains in digital revenue even as overall income slumped.
“TVNZ+ is now watched by over 1.1 million viewers a week. In the first half of [the 2023 financial year], the platform recorded more than 173 million streams.
“Digital revenue also grew 16 per cent year-on-year. These are big numbers, and we are focused on growing our reach further by expanding our content catalogue and continually improving the user experience.”
TVNZ refuses to provide a breakdown of broadcast vs digital revenue.
Power said both broadcast and streaming would benefit when TVNZ picks up cricket and other codes from Spark Sport mid-year.
Ex-Spark Sport content will all be free. Spark essentially paid the state broadcaster to take its money-losing sports streaming business off its hands, taking a $52m charge that will cover rights for content that will now be shown by TVNZ through to 2028.
Although his predecessor talked up TVNZ+’s potential pay-per-view capability, Power reiterated today that cricket and other sports content inherited from Spark Sport would be free. Exact broadcast and streaming details for the ex-Spark content will be released closer to the transition.
Staying on?
Would Power have liked to have led the combined TVNZ-RNZ?
“I didn’t actually give it a whole lot of thought,” he claims. “I was pretty focused on getting us to March 1. The legislation only really came out of the select committee quite late, so the timeframes that we were dealing with were quite tight.”
Will he stay on at TVNZ, now the merger has been scuttled? (Some saw the ex-banker having been drafted in to drive the transition.)
“I always had an arrangement with TVNZ that I was here. It wasn’t a fixed-term contract,” Power says. “It wasn’t a fixed-term contract dependent on the merger so, yes, I’m staying.”
No news on ‘One’
TVNZ filed opposition to Vodafone NZ’s “One” rebrand with the trademark office in the first week of January.
Negotiations between the two companies, which began last October, are dragging on.
There was no update today beyond that discussions continue.
