KEY POINTS:
The head of Television New Zealand's advertising sales has resigned as the company fends off pressure to cut advertising rates and harm its diminished profit forecasts.
TVNZ chief executive Rick Ellis said yesterday Lauren James would be leaving the state broadcaster on June 29 - the last day
of what is expected to be a dismal financial year for the company.
The sales division delivered $334 million ad revenue in the year to June 30, 2006, but revenue slipped in the first half to December 31, 2006, and Ellis has also picked a tough second half.
"Lauren wants a change in focus in her life and believes sales is ready for new leadership to take TVNZ into the new media environment," Ellis said.
"Her tenure has been outstanding, particularly given that the industry is so high pressured and highly competitive."
James - head of the division for the past five years - could not be reached for comment yesterday.
James, whose department brings in about half of New Zealand's free-to-air TV advertising revenue, has survived past management upheavals at TVNZ.
Ad agency sources said she had recently taken a lower-profile role in TVNZ dealing with its numerous issues with agencies. These were being handled by Jeff Latch - her predecessor running sales - and who was recently appointed head of programming.
James' resignation is just the latest in a run of such departures since Ellis took over the reins and includes the deputy chief executive, Stephen Smith, head of commissioning Tony Holden, head of news and current affairs Bill Ralston, head of programming Annemarie Duff, TV One programmer Liz Fraser and public relations boss Avon Adams.
The company is also in the midst of a protracted process to cut staff by 110 to meet a fall in ad revenue.
James' job running TVNZ sales will not be advertised outside the broadcaster and company sources tip it will go to David Walker, a former ad agency executive who oversees the relationship with agencies.
In his previous stewardship of the company, Ellis hinted at plans to review the TVNZ rating structure where agencies receive a 20 per cent commission on the money they spend on media.
TVNZ said yesterday there were no plans for such a change.
Typically part of that 20 per cent is passed on to advertisers. But commission remains a foundation stone for the advertising industry.
Agencies complain TVNZ should look closer to home at reducing the premium it charges for its channels dominating the TV advertising market.
Basic ad rates are built around "Tarps" - the cost of reaching a certain number of viewers.
Agencies - including big ones like Mediaedge:cia - argue that with the fall of TV One ratings that premium should be reduced.
Kath Watson, the leader of media buying arm of ad agencies body Caanz, said pricing problems had been partly addressed with cuts in ad rev-enues.
But she said that just 12 months ago, TVNZ was increasing its ad rates by 20 per cent while its ratings were falling.