TVNZ's forecast $17m loss for 2020 and cancelled dividend have led pundits and politicians to talk about the end of the broadcaster as we know it - perhaps a radical rejig to make TVNZ 1 commercial-free, or engineer a merger with RNZ or Maori TV.
But chief executive Kevin Kenrick shrugs off that talk.
He says TVNZ is about to embark on a three-year reorganisation, and he sees it coming out the other end in profitable shape, and able to stand on its own two feet.
The broadcasting boss has three planks to his turnaround plan, which he discussed with the Herald today after TVNZ's 2019 results were released, revealing a 44 per cent profit fall to $2.9m and revenue that edged down 2.5 per cent to $310m.
Its central element involves a 26 per cent increase in spending on local production or a boost of "in the vicinity of $20m" per year (TVNZ had total programming costs of $186m in 2018). The other two are further development of TVNZ OnDemand and a "simplification" of the broadcaster's structure and systems.
"Competition has shifted from local vs local to local vs global," Kenrick said.
Netflix and Amazon Prime Video are signing worldwide deals for Hollywood content. But Kenrick sees an even keener threat on the international content front: apps like Disney Plus (launching in NZ in November) and HBO Max, which allow film and TV studios to sell their content directly to audiences.
Kenrick emphasis that the 26 per cent increase will be out of TVNZ's pocket, not NZ On Air's.
Local content will become the broadcaster's "sustainable point of difference," he says.
There will be more local content in all genres. Details won't be released until TVNZ reports to MPs next month, but Kenrick confirms there will be more live sport.
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"There's some sport it makes sense for use to do ourselves," he adds. "The America's Cup is a good example of that. And there's other sport where it makes sense to partner with others because they will bring the subscription revenue side. A good example of that is what we're doing with Spark and the Rugby World Cup.
"It's more of the one-off events that we would probably do ourselves than the season-long formats."
But how do you boost production spending by 26 per cent when profit is cratering?
"We've set ourselves up so we can do that. We can sustain that out of our [$50m] cash reserves through this three-year-window. We don't intend to take on debt like other players," Kenrick says.
Shifting spending from international programming to local programming will also be part of the mix.
Audience numbers are strong, he says.
"We've got a profitable business. We made $26m ebitda [in FY2019]. We expect our revenue next year to be pretty stable. We expect some softening in TV but that will be offset by the Rugby World Cup and what we do in OnDemand," he says.
OnDemand seems to be growing well.
It achieved 80% year on year growth in viewership to record 184 million video streams for FY2019, reaching 141,145 daily. And it delivered year-on-year increases in weekly audience reach (+38%) and advertising revenue (+31%).
But Kenrick won't put a dollar figure for that 31 per cent increase, however, making it impossible to say how well.
He sees red
So why the forecast $17m loss next year and the axed dividend?
"The catalyst for us is when you look at the global players and whether it's a Netflix or an Amazon or a Disney - they're all ploughing in a lot more money than they're getting out to build a future position," Kenrick says.
"Netflix is on the record saying they're going to burn US$3 billion in cash over the next 12 months. So we looked at that and said, 'If that's who you're up against, do you think trying to maximise near-term profits and under-investing in content is the way to compete - or do you actually go really hard at local and build a much stronger position and create a more sustainable future?"
Will we see a return to a dividend to the government after the three-year restructure wraps up?
"The goal is to have a financially-sustainable business; a self-sufficient business that doesn't require any subsidy and we've got a really aggressive plan to get there," Kenrick says.
That's the TVNZ boss's take. Will his political overlords buy it?
Shareholding ministers Kris Faafoi and Grant Robertson will table the broadcaster's annual report to Parliament on September 18.