As of November 2011, this website is no longer being kept uptodate. It contains NZ Parliament debates from November 2005 to November 2011. is volunteer run, and has been in operation since November 2006.

Television New Zealand—Revenue Decline

Wednesday 12 September 2007 Hansard source (external site)

Coleman12. Dr JONATHAN COLEMAN (National—Northcote) Link to this
to the Minister of Broadcasting

What steps has he taken to assure himself that Television New Zealand’s strategy will reverse the company’s decline in revenue, following the announcement of the company’s worst ever financial result?

MahareyHon STEVE MAHAREY (Minister of Broadcasting) Link to this

As people will know, Television New Zealand (TVNZ) has developed a 5-year strategic plan. Sir John Anderson, the board, and the management have assured me that this plan will return TVNZ to profitability. The chief executive confirmed this on Radio New Zealand National yesterday when he said that the issues that had led to the loss have been addressed, and TVNZ is confident of returning the company to good, solid profits.

ColemanDr Jonathan Coleman Link to this

Does the Minister really expect the public to believe his explanation in the House yesterday that TVNZ revenues will be increased by its moving to digital, cutting costs, looking for new ways to source revenue, and launching a plan to reach New Zealanders on every screen; if so, how exactly will the business model work, or are the mere financial details beneath him?

StreetMaryan Street Link to this

Has the Minister seen any reports on the relative performance of TVNZ since 2003?

MahareyHon STEVE MAHAREY Link to this

Yes, I have. Yesterday Dr Coleman put out a press release on its performance between 2003 and 2007, in which he made a number of fundamental mistakes. He did not notice, for example, that there had been a separation of TVNZ and Transmission Holdings in 2004. He showed he does not understand the difference between shareholders’ equity and company value. He said that TVNZ launching two new channels was a strange thing to do when every public broadcaster in the world is going into a multi-channel environment. He also did not acknowledge that in the 1990s National sold off Sky shares—a major mistake—bled the organisation through rates of return of 23 percent on average, and prepared it for sale. All of that was absent from his press release, and that shows that it would be a really good thing if he talked to people around the sector about how it operates.

ColemanDr Jonathan Coleman Link to this

Why, when the Minister has just admitted that the mere financial details are beneath him, is he blaming TVNZ’s financial difficulties on audience fragmentation and changes in technology, when the reality is that over the same period that he has managed to halve the value of TVNZ and reduce its revenue by $120 million, TV3, competing in exactly the same market, has actually grown its revenue and increased its value?

MahareyHon STEVE MAHAREY Link to this

I can only say that the member needs to go and talk to people in the sector. If a company is split in half, as TVNZ was, then half of the value goes off into Transmission Holdings and half stays with TVNZ. I think that changes the value of the company. TV3—to take another of the member’s questions—is a company that focuses largely on the 18 to 34 demographic in the Auckland market. TVNZ focuses on the whole country and on all demographics. That changes the fundamentals of both companies.

ColemanDr Jonathan Coleman Link to this

How does the Minister explain that on his watch last year TVNZ turned a $34 million taxpayer investment into a $4.5 million loss—its first ever—and how can he possibly think that that represents a good return for the New Zealand public?

MahareyHon STEVE MAHAREY Link to this

Apart from the fact that this Government is not preparing the company for sale, as the previous National Government was, I would say that the chief executive explained it extremely well. I know that issues like the fragmentation of the audience, the reduction of the amount advertising available, the changes in the nature of analog broadcasting, and the need to move to digital are beneath the member, but they are very important to all broadcasters, and I am sure that if the member visits them, they will help him understand that.

ColemanDr Jonathan Coleman Link to this

Would the Minister outline for the House what his charter has actually delivered for the New Zealand public apart from a $4.5 million loss, the halving of TVNZ’s value, a $120 million slump in advertising revenue, and Dancing with the Stars, which according to Rick Ellis is a charter programme but according to Michael Cullen is not?

CullenHon Dr Michael Cullen Link to this

It had Rodney Hide on it.

MahareyHon STEVE MAHAREY Link to this

Dr Cullen was just observing that it was just one participant who he thought was not up to the charter. I can point to TVNZ’s regionalisation of its news; its internationalisation of its news by putting journalists overseas; its higher presence of Māori and Pacific programming; its greater number of broadcasts with local content; its rising number of documentaries; its buying high-quality overseas programmes; its 5½ hours of coverage—a fantastic operation—of the Māori Queen’s funeral; and mainstream television’s adoption of Māori language. I could go on and on. There is its programme in schools. There is its work with independent producers of programmes. It is not a bad record, really.

ColemanDr Jonathan Coleman Link to this

Now that the Minister has reduced the value of TVNZ by half during his tenure, does he reckon he has got time to chew through the other half before the 2008 election, or will he need another term as Minister to bring the value down to zero?

MahareyHon STEVE MAHAREY Link to this

The member can guarantee that we will have another term; that is something I want to say to the member. I imagine that during that time National will reinstate Maurice Williamson as spokesperson; at least he understood something about the portfolio, and he is probably sitting there cringing right now. But I go back to something very simple: if a company that used to have both TVNZ and Transmission Holdings in it is split, its value will change quite substantially.

CollinsJudith Collins Link to this

I seek leave of the House to table the Government’s plan to bring TVNZ back into profitability.

WilsonMadam SPEAKER Link to this

Leave is sought to table that document. Is there any objection? There is objection.

Sep 2007
Mon Tue Wed Thu Fri