Rick Ellis, chief executive of Television New Zealand. Photo / New Zealand Herald
Rick Ellis, chief executive of Television New Zealand. Photo / New Zealand Herald
TVNZ's answer to Sky's digital recorder has wiped a big chunk of the broadcaster's profits - but managers say it will continue to support the TiVo platform.
TVNZ's profits were $4.9 million in six months to December 31 - down from $8.8 million in the same period of the previousyear. This was in spite of an improved operating performance.
It comes after the state broadcaster had to write off losses on TiVo, the digital recording device similar to MySky, launched with great fanfare last year.
TVNZ has written off the $9.4 million it paid for TiVo as well as providing its investment with an additional $5.4 million - amounting to losses of $14.8 million.
The TiVo investment is now worth nothing in the TVNZ books.
TVNZ chief executive Rick Ellis described the write-off as an accounting convention. He said the impairment of TVNZ's investment in TiVo parent company Hybrid does not impact the operation or service for TiVo users.
Ellis was a strong advocate for TiVo when it began on October 29 2009, and stood by the decision yesterday.
"At the time we went into it we thought it was strategically important to drive the uptake of digital TV.
"We've been caught by the dynamic changes in the marketplace - there had been an avalanche of new competitors in the Australian market, which had forced TiVo to reduce its prices."
However, that does not tally with reports from Telecom. "I'm expecting that improvement in the Australian market on the new pricing," Ellis said.
"But looking forward we think Tivo has a great position," he said.
Ellis insisted that sales for TiVo had held up.
Ellis said it was one of the best half-year operating earnings results in recent times, and positions the company well for the full financial year.
Television advertising revenue for the half year was $163 million, up $12.1 million, or 8 per cent compared to 7.6 per cent for the television ad market overall. Operating earnings were $33.5 million up from $14.2 million.
