Media: TVNZ7-Radio NZ merger tough ask

Bill English is less idealistic than some of his colleagues but would not want to put money into a new broadcaster. Photo / Mark Mitchell

Proposals to merge Radio New Zealand with TVNZ7 face an uphill battle. But it could be the last chance to fix New Zealand's ailing free-to-air TV service.

The Government is about to release a discussion paper about the future of TVNZ6 and TVNZ7 after $79 million in taxpayer grants run out at the end of next year.

TVNZ6 has shown some impressive content - arts show The Gravy is a standout - but has never been adequately marketed and few would be upset if it were made commercial.

But TVNZ7 is special. Free from the inflated egos and hype of schedules built around ad breaks, it has brought New Zealand close to a true public service channel.

The merger of TVNZ7 and RNZ is just one of three options.

There is always the popular "do nothing" - TVNZ would turn TVNZ7 into a commercial broadcaster.

And then there might be continuing taxpayer funding direct to TVNZ.

Broadcasting Minister Jonathan Coleman is said to be not averse to the merger.

It cleans up the so-called dual remit. TVNZ has to make money and - in theory - deliver public service values.

But quantifiable results like revenue and dividends will always trump nebulous ideas such as public service and quality.

Minority audiences such as those over 60 are not valued by advertisers so have no choice but to go to Sky TV.

Coleman is said to be looking at all the options and will initiate some changes next year.

But there are a lot of commercial forces against a combined new public broadcasting institution.

And - beyond the Save Radio New Zealand campaign - there has seldom been a tangible demand for public service broadcasting.

Even then it is often from demographics who are not attractive to advertisers.

Within National some loathe the idea of public broadcasting. It's all a bit, well, socialist.

Communications Minister Steven Joyce made his money in private radio and does not like public broadcasting.

Finance Minister Bill English is not ideologically driven.

But he will not want to spend more money and says if there are any new institutions - such as a combined RNZ and TVNZ - they would have to be paid out of the present pool.

Where would the money come from?

The obvious place is from New Zealand On Air and the Premium fund used by commercial TV networks to subsidise expensive dramas.

But the commercial TV industry is built on subsidies.

MediaWorks' TV3 will fight losing subsidies to fund a new non-commercial broadcasting institution.

TVNZ provides the infrastructure that makes TVNZ7 viable.

But its mishandling of charter funding leaves big questions whether it can be trusted long term to run a public service channel - and where TVNZ7 would fit if and when TVNZ is privatised.

Radio New Zealand is already in the gun with the Government and faces change no matter what happens in the digital TV argument. Its board of governors is being filled with National appointees.

It is wary of a merger because of the dangers to its independence and integrity.

Union politics come into it. Radio New Zealand is unionised while TVNZ is not.

It is true that TVNZ7 has only come into its own this year. For the first couple of years it had few features and even then it focused on special interest groups favoured by TVNZ - media and the advertising industries.

Useful specials and debates - such as the infamously promoted "Plain English" economic debate - were rare until TVNZ wanted to make an impression with the Government that the channel has some worthwhile functions.

At least now if the Government throws it away, we viewers will know what we are missing.

AD VETERANS

Joan Withers - a former chief executive of Fairfax New Zealand - has been promoted from board member to deputy chairwoman of TVNZ. She replaces longtime board member Rob Fenwick.

Meanwhile, ad industry identity Roger MacDonnell has been appointed to the TVNZ board, bringing marketing nous to a company facing major hurdles to boost profits.

MacDonnell has been a passionate supporter of the private sector and business but he says that joining a state-owned company was not an issue when he accepted the offer to join the board.

MacDonnell retired from Clemenger Group but remains a shareholder in the group, whose Colenso BBDO was last year appointed TVNZ's ad agency. He said his stake was diminishing and would be completely gone at the end of next year.

In earlier moves, Saatchi & Saatchi global president Kevin Roberts was appointed to the board of Saatchi's biggest client Telecom.

Peter Cullinane was appointed to the board of SkyCity Entertainment, about the same time as it took over the ad account for the casino company.

Ad industry folk have different views about the trend for agencies to be on the boards of their clients.

As a general trend they bring marketing nous - but does it mean that incumbent agencies get a heads-up if there is disquiet about their performance? And does that raise questions about the transparency of multimillion-dollar ad accounts?

DAISY-A-DAY

TVNZ's parting with head of advertising Dave Walker marks the new era with it halving sales commissions to ad agencies.

After seven years in sales - three heading the division and sitting at the top table - Walker has strong relationships, and this year he has appeased concerns from some agencies with commission cuts from 20 per cent to 10 per cent, which will be fine with many of the big multinational media buyers but hurt some smaller agencies.

When the new head of marketing Paul Maher took over sales from Walker it was only a matter of time before he was gone.

Formerly a senior executive at big media-buying agency Starcom, Maher has an intimate understanding of how the industry works, and TVNZ has already shown signs this year of challenging the powers of agencies to set the price for ad time.

The two men have differing styles, summed up by their industry nicknames. The amiable Walker is known as Daisy and the gruff Maher is called Shrek, after the taciturn ogre.

Meanwhile, TV3 has yet to replace Colin Caldwell, its former head of sales, whose departure was announced the same day that new MediaWorks TV general manager Jason Paris arrived.

Caldwell had been under pressure surfing the advertising slump to meet the Ironbridge expectations for MediaWorks to meet crippling interest payments dating back to its purchase.

Intriguingly, Caldwell has taken up a specified-term role at Yellow Pages - a company that is in a more parlous state thanks to the excessive price paid by its private equity owners.

PR HEAVEN

Holden had an interesting take announcing its new public relations man, Neil Waka. Holden NZ managing director Simon Carr said Waka had a wealth of experience working on TVNZ, TV3 and radio.

In a break with tradition Holden also reported that Waka was "on the shortlist as a board member of TVNZ in 2000".

Apart from the fact that TVNZ was in a very strange state in 2000 and it was 10 years ago - it raises the question as to why he was not appointed.

This could be the sort of issue that would be solved by a good PR man.

FIVE YEARS ON

Traditional media are battling the drift of readers online.

Audit Bureau of Circulation survey comparisons between June 20005 and 2010 illustrate the impact on print titles.

Figures are for total net circulation including promotional giveaways, and do not take account of titles that have an online presence.

They also do not mention the number of giveaways. ABC figures to June 30 this year showed ACP Magazines' monthly Australian Women's Weekly with 80,727 circulation, compared with 93,898 on June 30, 2005.

Women's Day was 110,038 down from 151,074 in 2005; North & South was 28,733 down from 38,343; Fashion Quarterly bucked the trend at 23,713 up from 21,638.

Among Fairfax magazine titles, Cuisine was 55,187 down from 71,030; NZ House & Garden was 48,776, compared with 75,619.

TV Guide had circulation of 155,591 compared to 203,456 in 2005; NZ Gardener gained with a total net circulation of 48,989 up from 37,734 five years earlier.

At APN's New Zealand Magazines, the New Zealand Listener was 62,811, down from 73,034, NZ Woman's Weekly was 80,518 down from 102,542. Creme also reversed the trend and was 20,790 up from 11,654 in 2005.