The world is going digital, but MediaWorks and NZME. still had to spend millions of dollars on ye olde radio frequencies.

In the latest government auction of frequencies until 2031, the duo had to pay to retain leases on their existing frequencies, and to pick up new ones available for the first time.

NZME. paid a record $7.8 million (including GST) to keep the FM100.1 frequency in Christchurch and also bought 14 others.

The price - $1.8 million more (with no GST) than the previous record 11 years ago - seems astonishing considering the flurry of digital media innovations.

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But NZME. radio boss Dean Buchanan said it had no choice but to pay what the market demanded, even as arch-rival MediaWorks was ratcheting up the price by bidding for Christchurch 100.1.

Newstalk ZB is number one in Christchurch and loss of its frequency would have left a gaping hole in the talk network.

Meanwhile, MediaWorks says it has bought enough frequencies to turn George FM into a nationwide network and expand R&B station MaiFM. Decidedly more peculiar are the company's claims that it has the capability to create a new nationwide network that includes Auckland.

Buchanan is sceptical, noting no new frequencies were made available in Auckland, a city that is essential to any network.

Inevitably, speculation will turn to MediaWorks' stewardship of the Kiwi FM national frequency set aside for youth, though any attempt to use that for commercial purposes would be politically contentious.

Meanwhile, its expansion of George FM is intriguing. Once a niche alternative station for the Ponsonby set, it has morphed into a more mainstream channel aimed at men aged 18-34. NZME. is confident that its brands - the reconfigured Radio Hauraki and ZM - will serve that audience well.

Smith's dream

Who will eventually take over from Leighton Smith in the 8.30am-noon spot on Newstalk ZB? It's an important money earner for Newstalk, up against Sean Plunket on RadioLive and Kathryn Ryan on NatRad.

Smith has said he will be leaving Newstalk soon, after 28 years. Owner NZME. has given no indication about the show's future. NZME. talk radio boss Dallas Gurney is staying mum.

Two names spring to mind as possible replacements. Newstalk ZB host Larry Williams could appeal to Smith's audience. And there's Rachel Smalley - the early morning star who some believe is under-used.

That might be too radical a change for Leighton's mob. I think she believes in global warming and doesn't see it as a liberal conspiracy.

One media person suggested ZB might choose a right-wing outsider - not a broadcaster, but a public figure who could run a racy debate. What is Rodney Hide up to nowadays?

Dr Ruth provokes

New Zealand strategies for the film and TV industries compare badly with Australia, according to Dr Ruth Harley, a leading light in the funding sector on both sides of the Tasman. Harley is a former chief executive of Screen Australia, the NZ Film Commission and NZ On Air.

So she has a unique take, and gave a provocative John O'Shea address to the industry last week.

Harley believes New Zealand took the wrong path 25 years ago.

In Australia, local content needs are based on regulation, with quotas and levies on pay channels, while New Zealand relied on contestable funding from taxpayers, Harley said. The NZ screen industry gave up too easily in 1989 when the Broadcasting Corporation was restructured. "We accepted the rhetoric of the funder/provider/policy maker split and the cultural debate was subsequently lost under the prevailing ideology of commerce and populist television.

"We lost our moral compass in the process and as a result we do not have an authentic cultural case to make to Government ... we have the transparent and low-cost model that is NZ On Air. We do not have the robust market place that Australia has."

Some violently disagree: one producer I approached called Harley's comments "emotional".

The NZ On Air model is well liked by the TV networks, which use it to fund local content, and by established production companies. But there has long been criticism that the networks have become risk-averse and taxpayers are funding commercial projects aimed at earning ad revenue.

Harley's critics say the NZ film industry has been doing very well, thank you very much. One said her comments ignored the impact of new media, which allowed funding of higher risk projects. They said it was impossible to compare the funding of dramas by Aussie networks with an audience and revenue five times greater than in New Zealand.


Read Ruth Harley's full speech here: