KEY POINTS:
Television New Zealand is bearing the brunt of a downturn in television advertising sales as depleted ratings hit the state broadcaster's revenues.
Free-to-air television companies said yesterday revenue for the year to June 30 had dropped a modest $3 million - around 1 per cent - to $287.6 million, compared with the previous year.
The Television Broadcasters Association figures - for TV One, TV2, TV3, C4, Prime and Maori TV - put a positive spin on results, which were an improvement on the $10 million fall the previous year.
The worst results were during the first three months of 2007, and numbers had increased for the second quarter, including the start of winter, when television viewing is up.
On the face of it, the modest reductions fit expectations that free-to-air television - like other media - is sliding backwards as stations face competition for viewers and ad revenue from new media.
But advertising agencies said TV3 and Prime were relatively buoyant, and the total industry figures masked a more substantial fall in ad revenue at TV One and TV2.
"That is certainly the view within the industry," said Kath Watson, chairwoman of the media committee for the advertising agencies body CAANZ.
TVNZ declined to specify reduced revenue and cited an agreement with MediaWorks and Prime that they would not divulge their individual results. But agency media buyers said MediaWorks, TV3 and C4, and Sky's much smaller Prime Television were both increasing their advertising revenue.
Sky issued results for the full year to June 30 that showed Prime earned $23 million in ad revenue and increased its prime-time share for 20 to 54-year-olds from 3.7 per cent in April 2006 to 6 per cent in July 2007.
MediaWorks has advised shareholders it expected to increase revenue this year.
Media buyers Sean McCready and Martin Gillman said that TVNZ channels had seen a slide in audiences over two years, and that had affected revenue.
"A big part of TVNZ's losing revenue has been due to the fall in ratings for Television One shows and latterly for TV2," said Gillman, managing director of Total Media.
Broadcasters sell advertising around the number of viewers they reach, or "tarps". But where a show does not attract as many viewers as promised - as happened to several TV One and TV2 shows in 2006 - the broadcaster ends up owing the advertiser some audience.
Gillman said that TVNZ had used up revenue-earning capacity on its channels by paying back advertisers later with "make-goods" - effectively, free advertising spots.
Where the ratings downturn had been substantial - as it had for TV One with One News and for TV2 with shows that had not rated as expected, such as Lost and Ugly Betty - make-goods used up capacity and ate into revenue.
