Internet Party Leader Laila Harre with founder Kim Dotcom in 2014. Photo / Getty Images
Tech does so much to boost our nation. But when it goes wrong … oh, boy. The Herald is recapping some of NZ’s tech’s biggest misfires in a two-part series (read Part 1 here).
The Copyright (Infringing File Sharing) Amendment Act 2011, which allowed the Copyright Tribunal to fine people up to $15,000 for pirating music or movies, was ill-starred from the beginning. As the legislation worked its way through Parliament, a surreal debate saw National MP Katrina Shanks state “I had no idea that the software was so common”, while her colleague Jonathan Young weighed in with the immortal “Do members remember The Terminator? In that film a computer system called SkyNet ruled the world. It was like the internet today.”
“Fans may recall the main difference there is that Skynet tried to wipe out human life,” Herald journalist Liam Dann noted at the time. The name stuck. A visitor from Mars would suspect that the under-resourced Copyright Tribunal was not too keen on its much-expanded role, or the principles involved. The handful of cases it heard seemed cherrypicked to highlight the drawbacks of the SkyNet law. One involved an NZ Defence Force soldier whose flatmates illegally downloaded two songs (one by Rihanna, one by Hot Chelle) while he was serving in Afghanistan. As the bill-payer, the soldier was responsible and he was fined $255.97, including $5.97 for the downloaded music.
Meanwhile, the Hollywood studios brought a grand total of zero cases, perhaps wary of bad PR during a pre-Netflix era that saw Kiwis given no legitimate way of accessing a lot of content. A trickle of Tribunal cases dried up to none by the end of 2013. In 2015, an Order in Council was quietly enacted that effectively gutted the legislation.
The Super City came with a supersize software blowout. Amalgamating Auckland involved stitching together eight different software systems into a new beast called “NewCore”, which kicked off in 2014. The project, based on software from German multinational SAP was originally budgeted at $71 million but cost $157m by the time it was finished in 2017 (the council claimed a success because its overall budget was kept in check). It was just part of a continuum of public sector IT blowouts that began with the INCIS system for the police in the 1990s and includes Novopay (see part one of this series) and stretches all the way up to the new $150m births, deaths and marriages register that was halted just before Christmas.
Money can’t buy you love. Kim Dotcom donated $4.5 million to his Internet Party ($1m ahead of the campaign and $3.5m during it - a record for an individual). It merged with Mana to fight the 2014 election. In the event, Internet Mana received 34,095 votes or just 9927 votes ahead of its 2011 tally. And to add insult to injury, Mana lost its only seat. The 9927 increase delivered by Dotcom worked out to $453 per vote - a graphic illustration that money can’t buy you love. (National, which prevailed with 1.13 million votes or 47.04 per cent of the total, spent $4.47 per vote).
Dotcom - who had notoriously donated $50,000 to the Auckland mayoral campaign of ex-National Party MP and future Act leader John Banks in 2010 - took a sudden lurch to the left as he hired Laila Harré as the Internet Party’s leader, and a promise to halve the cost of everyone’s internet. Activist Sue Bradford called the flash and the cash a “beads and blankets colonisation”. Voters didn’t buy it. After the results came in Dotcom said his brand was “poison”.
Between the losses of its early years and the arrival of streaming, Sky enjoyed a period of breath-taking dominance over the pay-TV market. The Commerce Commission was increasingly sniffing around. In 2012, a brave new era of competition emerged in the form of “Igloo”, a pay-TV firm, with a $99 set-top box going by the same name, offering 12 “Premium” channels for $19.95 per month. Almost no one subscribed, possibly because you couldn’t record anything and there was no premium sport, among other drawbacks.
The rationale behind Igloo’s lack of features perhaps lay in its ownership: The venture was 51 per cent controlled by Sky and 49 per cent by TVNZ. Cynics said it delivered Sky the appearance of competition, plus an upsell opportunity to the full-blooded version of its service. What was in it for TVNZ was never clear. Igloo aimed for a modest 50,000 subscribers but reportedly struggled to get to 10,000. Igloo melted away in 2014, with TVNZ writing off $6m.
You might think Igloo was a rookie mistake by TVNZ, as it tried to navigate the waters of next-generation broadcasting. You would think wrong. The state-owned broadcaster was fresh off another misadventure:
The local iteration of TiVo, which it launched in partnership with Telecom. TiVo - whose auto-recording of shows it thought fit your viewing patterns - had been a sensation in the US in the pre-Netflix era (or, at least, the era when Netflix was still a DVD rental company).
But at $920 ($1315 in today’s money) when it launched in 2009, an NZ TiVo box was expensive, and it could only record the free-to-air channels - not including Sky’s Prime TV - and a tiny selection of pay-per-view movies were displayed on an interface that loaded at (it seemed) a rate of one pixel per hour. TVNZ and Telecom execs seemed puzzled at the low update.
This reporter wondered if they were using Sky boxes at home and not 110 per cent across the sluggish, narrow experience of being a TiVo customer. Always eat your own dog food. TVNZ took a $14.8m write-off as it sold out of the venture in 2011.
READ MORE: NZ’s most embarrassing tech disasters, Part 1
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
Du Val reportedly owes $306m to investors and creditors, according to PwC.