The architect of the mega RNZ-TVNZ media merger, Tracey Martin, says she is trying to give content providers as much confidence as possible that there will still be a lot of work for the screen industry.
She is also suggesting that competing media organisations in the private sector could work with her Establishment Board on how the new entity should be monitored in the future.
Martin, a former New Zealand First Minister, led the Business Case Governance Group report and is now leading an Establishment Board to prepare for March 1, 2023, when the staff and assets of RNZ and TVNZ will form Aotearoa New Zealand Public Media (ANZPM).
Concerns about the impact it could have on the viability of the screen sector and the private media sector were heard in submissions to the economic development, science and innovation select committee.
In an interview with the Herald, Martin said she was aware of the anxiety. But she believes ANZPM will have to continue commissioning content from the private sector.
"We are not the entity board but we are working on the financials of what we will recommend to the entity board and part of that work is trying to ensure that we can give confidence to the people who are being commissioned."
The new entity had a requirement to keep the ecosystem healthy "so it would be unhealthy for the ecosystem to pull all production in-house, and it can't afford it," she said.
Logically, it would still be commissioning just as was commissioning now but it might be on different types of productions if, for example, there was a focus on children or Pasifika.
She also said the entity did not have to do things itself in order to meet its charter obligations.
For example under the requirement for Pasifika New Zealanders to see and hear their languages more, the entity could partner with the Pasifika Radio Trust to support them with studios or resourcing to allow the trust to do more of what it did.
"I've tried to give those people in the content areas as much confidence as I can that this entity will still be commissioning from independent content producers.
"Not only will it be commissioning at the level it has been but actually, there is more money, because it is supposed to be doing more things."
The establishment board has 23 staff and is working on four streams of work: funding and monitoring of the new entity; the operating model; transition and change; and the legislation.
Martin said the work being done on monitoring was looking not only at what the deliverables would be from the charter under the legislation but also at whether it would meet other requirements such as collaborating with the media sector.
She acknowledged the concerns being expressed by competitors in private media.
"It seems to me they should be looking inside that monitoring area and working with the team here."
They could be working on how to publicly expose the entity if it was acting in a way that was opposite what the charter required it to do.
Martin said Deloittes was partnering with the Establishment Board to provide modelling for a 10-year period on revenue streams, outcomes and outgoings.
But the environment had changed substantially since the business case governance group first reported.
She said it would be easy to measure viewers and listeners.
"But this is not about mass eyeballs and ears as it was just when you had a commercial entity."
It was also about how to measure whether it had reached the under-served and under-engaged.
"How do you effectively measure that the New Zealand Indian community can see and hear themselves more and so feel a greater part of New Zealand society?
"How do you measure that Māori history and tikanga Māori is better understood by the majority of New Zealanders?"
The establishment group was looking at such things could be measured without having to spend all of its time reporting.
She had had contact with Ofcom, which regulates the BBC and other communications entities in Britain, the BBC itself and the ABC in Australia.
Martin said ANZPM had to do something different. It was not just RNZ and TVNZ dressed up in something different doing what they have already done with the same audiences.
"This is about setting aside money for new things where nobody is going."
One of the places very people were going was providing content for children – "safe New Zealand content and safe places for New Zealand's children."
That would not be competing with private sector media.
"It's about New Zealand as a whole trying to compete and combat what's happening internationally, not fighting among ourselves."
National MP Melissa Lee said the party was strongly opposed to the merger but has not yet decided whether it would dismantle the entity if it is in government after next year's election. That would depend on how much money "has gone down the rabbit hole" in setting it up.
MEDIA MERGER - WHAT YOU NEED TO KNOW
Who is making decisions about the merger?
We don't have a clear idea yet about how it will operate. In-principle decisions have been made by the Government and could be adjusted by the select committee with the consent of Broadcasting Minister Willie Jackson. But detailed decisions about how it will operate are either being made by the Establishment Board on an interim basis or will be delayed until the new board is appointed and takes charge.
What does the merger do?
It creates a new media entity, Aotearoa New Zealand Public Media (ANZPM), with the staff and assets of TNVZ and Radio New Zealand to provide news and entertainment. It will instantly create the largest media organisation in the country, although the TVNZ and RNZ brands and their products are likely to remain in place for some time. Whether the newsrooms will merge at some point will be up to the board of the new entity.
What are the rules? Does it mean RNZ will be able to run ads?
No. Current ad-free services will remain ad-free, including Concert Radio, but it will be able to expand its brands and platforms which could include advertising or and subscriptions. For example, it could set up a new radio music station or a subscriber channel for sports or digital streaming service for children. It will be funded by both by the taxpayer, as RNZ currently is, and advertising, as TVNZ substantially is. Most of its content must be free.
There's been a lot of criticism about it at select committee? Could it be stopped?
It could - but it is highly unlikely. Most of the concern has come from competing media businesses, screen industry players and academics. It is not likely to affect votes and so it will be passed into law in time to start on March 1, 2023.
What are the main criticisms?
First the potential for it to be subject to ministerial direction under its present structure; second the lack of safeguards to limit potential damage it could have on the private news media sector, and third, the uncertainty it means for the screen industry.
What effect will it have on private sector media organisations?
No one can estimate how much it will undermine their viability by taking away audience and advertisers because the Commerce Commission has been specifically prevented from needing to give approval for the mega merger. The Business Case Group for the new entity, headed by Martin, recommended in its report to Government that the RNZ-TVNZ merger be assessed by the Commerce Commission before getting the green light, but the Government ignored that. It's a particularly sore point for NZME (the owner of the Herald) because the Commerce Commission prevented a merger with Stuff in 2016.
What about once it is up and running?
Yes, at that stage, the new entity will be subject to the Commerce Act and if the Commerce Commission has concerns about the distortionary effect it is having on competition, it could undertake its own inquiry without direction from the Government.
Are there any other safeguards for the private sector?
Not specifically. Nothing like those that operate in Britain for the BBC (its charter must have particular regard to the effects of its competition) or in Australia for the ABC and SBS (which must use a best-endeavours approach to competitive neutrality) or for RTE in Ireland where public funds are not allowed to subsidise its commercial activities.) Under its legislation, APM has a duty to collaborate with Maori media and other media entities but that leaves a huge amount of room for interpretation. It is just as likely to mean letting student radio use its facilities as preventing it from damaging the big players in the so-called media ecosystem.
Is National correct in its claims that the planned merger will cost $370 million?
That is the amount of new money that will be spent over three years for both one-off set-up costs ($40m) ongoing annual costs ($327m) and monitoring by the Ministry of Arts Culture and Heritage ($3m). As well, $90.08m of existing money will be redirected from both NZ on Air ($84.8m) and the Ministry of Arts Culture and Heritage ($6m). Another way of putting it is that the new entity will get $200m in Government funding a year, ($109m of it new, and $91m existing) for its operations, including staff and content. And of course, the entity will also be able to make revenue of its own from advertising or subscriptions.
Will the new entity maintain the advertising TVNZ received?
For the three years, from 2020 to 2021, it was more than $900m the select committee was told by the Association of Advertisers. And for 2020–21 it was $322.3m, or 95 per cent of TVNZ's operating revenue. While competitors in private media are worried about audience migrating to the new entity, advertisers are concerned that "public interest" content could reduce audience, which would reduce revenue and send advertisers to offshore platforms rather than other local media.
What will happen to NZ on Air?
It will have about $60m to allocate for content after the $84.8m has been redirected directly to ANZPM. NZ on Air won't be funding content for the new entity. While the new entity will have funding capacity to produce in-house programmes or commission directly, NZ on Air will continue to fund projects for broadcast on other media. The $84.8m that has been reallocated from NZ on Air to the new entity, is comprised of the amount it currently uses to fund RNZ ($42.6m) and the average amount TVNZ has received annually from NZ on Air in contestable funding ($40m) and directly ($2.2m). All up, the same amount of money should be sloshing around to spend on production, by both NZ on Air and ANZPM. In the first few years at least, ANZPM won't have the capacity to produce much in-house. How much content it commissions from the screen industry will depend on the board of the new entity.
Who will run ANZPM?
A new board. At present, an Establishment Board is being run by Martin, and includes the chairs of TVNZ, Andy Coupe, and RNZ, Jim Mather, along with Michael Anderson, Bailey Mackey and John Quirk who were members of the Business Case Group, and Barbara Dreaver, Peter Parussini, and Aliesha Staples. The board has permission to appoint an interim chief executive for a term of six months.