The chairman of TVNZ has confirmed he is leaving the organisation and says it is critical the broadcaster’s new business strategy is implemented to avoid a “Kodak or Nokia moment”.
Chairman Andy Coupe will leave the role on June 30, the same day as CEO Simon Power and likelyseveral other board members.
Coupe’s tenure is up that day and he told Media Insider that he had advised the Government a year ago that he would not be seeking reappointment.
The chairman’s departure comes as Broadcasting Minister WillieJackson has signalled he wants a change of direction, and a much stronger public media focus from TVNZ.
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Coupe said TVNZ had drawn up a “whole-of-business transformation” document that went beyond software and hardware – it was a critical digital and consumer strategy and major technology investment to ensure the business thrived.
“All I will say is we are embarking on a five-year business transition. There’s a considerable amount of money on the technical side of the digital strategy and transition, which is important in terms of competing with the global competitors.”
Hundreds of millions of dollars are expected to be needed for investment, including for a new on-demand platform to compete against the likes of Netflix.
On whether the future TVNZ+ platform should be a subscriber service – like Netflix – Coupe said that was for the future board to decide. “It would be silly for any new infrastructure not to make provision for that.”
But he added: “In my view AVOD [advertising-based video on demand] will always be central to TVNZ+ because a core objective for Television New Zealand now and into the future is to reach all demographics of New Zealand society, hence a subscription-free offering is critical to this.”
The business plan had been signed off by the current board and submitted to the Treasury, and it was detailed, to ensure the new board could get their heads around it, said Coupe.
The new board had the capacity to make its own call, but Coupe said: “It’s critical we embark on this, otherwise we’ll have a Kodak or Nokia moment.”
As the Harvard Business Review reported in 2016, a “Kodak Moment” used to be the marketing catchphrase for the famous camera and film company that dominated the global market.
Through a series of missteps and failing to recognise the rise of new digital technologies and consumer demand (despite creating the likes of the world’s first digital camera) Kodak was bankrupt by 2012. While it emerged from that a year later, it is now a shell of its former self as a company.
“Today, the term [Kodak Moment] increasingly serves as a corporate bogeyman that warns executives of the need to stand up and respond when disruptive developments encroach on their market,” the HBR reported.
“The right lessons from Kodak are subtle. Companies often see the disruptive forces affecting their industry. They frequently divert sufficient resources to participate in emerging markets. Their failure is usually an inability to truly embrace the new business models the disruptive change opens up.
“Kodak created a digital camera, invested in the technology, and even understood that photos would be shared online. Where they failed was in realising that online photo sharing was the new business, not just a way to expand the printing business.”
Coupe told Media Insider that TVNZ had to foot it with the global players.
“I think the move to a light offering, such as by Netflix recently, demonstrates the increasing competition for the consumer media dollar. Our strategy has always been to be one of a smaller number of digital services consumers decide to watch than may be the case now. I see TVNZ+, YouTube and two, or at most three SVOD [subscription video on demand] services becoming the default viewing decision.”
Coupe said he was bullish about TVNZ’s future, and proud of the work of the company, including Power and the executive.
“He [Power] wasn’t appointed just because of his government experience. Even if SPM [Strong Public Media programme] wasn’t happening, I would have appointed him anyway. He is an excellent CEO. We have got on well, he is good to work with. I think he’s a loss. I think the quality of our people is fantastic.
“We are very pleased with what we achieved by buying Spark’s sports rights, but I think the quality of the TVNZ+ product has been a standout.”
TVNZ chief executive Simon Power.
Coupe has several other roles – including as a director of Briscoe Group and chair of three listed investment companies – and was now at an age where he wanted more balance, and to “smell the roses”.
He said he had been crystal clear with officials a year ago that he would not seek reappointment. “There would be no jockeying for position or reappointment,” he said.
The tenures of the rest of the board - deputy chair Kevin Malloy, Toko Kapea, Trish Carter, Keiran Horne, Meg Matthews and Aliesha Staples – are all up for renewal on June 30.
Coupe said he could not comment on the future shape or direction of the board. Interviews are currently taking place for various roles.
Former MP Tracey Martin, the highly respected chair of the TVNZ-RNZ merger advisory board and the person who many considered to be a frontrunner for the TVNZ chair role, is not on the shortlist, Media Insider understands. That leaves the role wide open, and likely means a jockeying for positions.
Broadcasting Minister Willie Jackson. Photo / RNZ / Samuel Rillstone
“I think there is significant misunderstanding on this topic,” says Coupe. “TVNZ’s content strategy has been that ‘local content’, both scripted and NCA, is our competitive advantage vis-a-vis global competitors.
“However local content is very expensive and in most cases very low to negative yielding. Most public commentary focuses on content and ignores the revenue requirements to fund it.
“TVNZ is almost entirely commercially funded, so there has to be a balance between content and yield. It’s also worth noting the TVNZ Act requires the business to be financially responsible and to maintain financial viability.”
Coupe’s comments about a new digital platform have been reiterated by the merger advisory board.
In its final report to Jackson, it said that “developing a world-class digital platform is the single most important new investment for our public media.
“Developing such a platform and the capability to exploit it fully requires investment in the hundreds of millions of dollars.
“We do not believe that New Zealand has the scale to warrant investment in more than one digital platform for public media content. Nor do we believe that multiple fragmented services would provide a compelling experience for audiences. Part of the challenge of competing on a global media stage is the need to have brand recognition so people can find content.
“To be clear, we need a NZ platform that can provide access to large amounts of NZ video content.”
The board said it was not enough to just create content. “There must be reliable ongoing access so people can find it and see it (or hear it).”
It recommended building on TVNZ’s “current digital investment plans”.
“While TVNZ is at the beginning of their digital journey and is still planning investment in technology and capability, they have a foundation to build from (and cash reserves). RNZ does not yet have a digital foundation.”
* Editor-at-Large Shayne Currie is one of New Zealand’s most experienced senior journalists and media leaders. He has held executive and senior editorial roles at NZME including Managing Editor, NZ Herald Editor and Herald on Sunday Editor and has a small shareholding in NZME.
