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Government slams TVNZ7 business case

The government has shown an odd bias in supporting MediaWorks, while letting public service broadcasting go to hell in a handcart.

TVNZ submitted a business case to the government asking for more funding for TVNZ7 but the request was turned down.

TVNZ chairman Sir John Anderson confirmed the move to Parliament's commerce select committee.

The government has refused to extend funding to TVNZ’s digital public service broadcasting offering TVNZ7 beyond June next year.

However, the government has happily given a handout to TVNZ competitor MediaWorks, in the form of a government-initiated deferral of payments scheme worth $43 million.

The deal has enabled MediaWorks to renew its broadcasting licence fees.

TVNZ has already slashed its public service broadcasting offering, turning digital channel TVNZ6 into a youth-focused commercial channel.

A spokesman from Broadcasting Minister Jonathan Coleman's office pointed out that the funding was only ever for a set period and there was never a suggestion it would continue.

The government’s refusal of TVNZ’s business case has angered Green MP Sue Kedgley, who says that in spite of Mr Coleman’s assurances that it won’t sell off TVNZ, it’s obvious the government is readying it for sale.

Mr Coleman instructed TVNZ at its last board meeting that it should be a solely commercial operation, focused on pursuing ratings and returning a profit.

Ms Kedgley is concerned the lack of funding for TVNZ7 will leave New Zealand without a public service television channel besides Maori Television.

She said the government is intent on favouring private broadcasting interests over the state broadcaster.

“The government turned down the [business case] because it does not believe in public service television, and has no interest in retaining a public service television channel,” she said.

“Some within the cabinet seem intent on kneecapping TVNZ while supporting schemes that assist private media corporations.”

More by Hazel Phillips

Comments and questions
14

It is ridiculous to suggest that the govt is giving mediaworks a handout - they are paying interest on the deferred payment arrangement. The money for TVNZ7 isn't a loan.

Also, people actually watch mediaworks channels making them viable from a revenue/cost point of view. Very few people watch TVNZ7 in relation to the huge $$$ wasted on them in the name of public service television.

Hello? ..$71 million to maori tv and the audience for some of the evening programmes is measured in 4 figures ..

Wrong, "Anonymous";

“…the Government allowed them to keep the frequencies and pay the money over a 50-month period – paying 11.2 per cent interest a year. The Crown held a mortgage on the frequency with a strong security. ” - http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10711540

The crown holds a mortage - that implies a loan. Ipso facto.

We reap what we sow, we have put a government into power that is intent on selling everything that is not nailed down. They will only look after the private sector as that is where their funding comes from.

3.20pm you should be ashamed of yourself. TVNZ7 is the only tv offering for people with actual brains. Do you understand why public service broadcasting is important in a functioning democracy? No? Oh you're too busy watching next top model.

The govt will sell tvnz for sure.

It's already shown its hand on this.

I would suggest to TVNZ that it should support Labour in the coming election in order to extend its life and keep its employment. What is happening here is not just a case of readying TVNZ for sale, but, along with Fairfax killing the NZPA, it is a case of the government putting the brakes on any media that is left-center sympathetic in this election year. Elections are won and lost in the media. All we will get then, around election campaign time, is nat propaganda. Want to keep TVNZ? Vote them out!

Anonymous 3.36 & 3.39 - you really are dorks. Now its a right wing conspiracy is it. TVNZ is an over staffed (comp is to TV3 it has 3 * the staff) incompetent (where the hell did the TIVO business case come from - fairyland?) ex govt dept that needs a major cleanout. TVNZ7 is an extravagance we can't afford. And if its that good how come its viewing figures were so low?

TVNZ 7 does make a pleasant change from the bargain basement string of reality tripe we, as a nation seem to lap up.

Sounds as if (from what I've heard from in the industry) is that 7 is being geared up to be sold. (Actually, I'd heard it was likely to be TV1) It'll be fun to watch... but with mates like Joycey loitering in shaded corners of the inner sanctum, wouldn't be too hard to guess which ex media CEO will be saving his pennies.
The first comment is spot on re Mediaworks, the deferred payment aint a gift.
In saying that though, TVNZ 7 sort of is... it'll be a shame to see it fold, if that's the way it plays out

Anything that gets that idiot Rustle Brown off the TV is OK by me.

IF the government decides to sell TVNZ, they'll find that nobody will pay much for it. The value has been pretty well been drained out of it over the years.

It's balance sheet is awful - an asset collection that is poorly placed to drive operating returns (my favourite - the downtown Auckland office building - most TV stations locate in cheap industrial space). And its income statement depends on government subsidies to show a pretend profit. Of course, labour costs are unreasonable by comparison to any reasonably well run TV station.

The big show-stopper to most potential buyers is that TVNZ's quaint free-to-air delivery model has maybe 10 years at most left to run. We'll use fibre. "Packaged programming " as practised by old-style TV stations is also nearly dead - why should any single viewer have to watch what the masses watch? TV programs will soon be chosen by individuals like music or videos are today. we'll each create our own Tuesday evening line-up. ANd of course, the mass advertising model that supported centralized TV is already quickly evaporating.

So good luck to the government with TVNZ. This is a turkey of a business, clearly not essential to the well-being of NZ. But selling it? Yeah right. Maybe for a dollar.

Well, here's a a sad day for from what I see, finally, a channel offering intelligent programming with documentaries on every night on a wide range of issues, as well as showcasing some great NZ made media based shows. One of my favourite shows being the recent Harvard Law lectures which are fantastic! It's true that public funding will struggle without commercial support so I'm hoping, however not holding my breath that Mediaworks or Sky will carry on a channel in a similar format to spare us from Tv 1, 2, 3 putting us through more mindnumbing reality based programs or the 45th Repeat of Friends/Simpsons/Two & a half men in primetime. Please someone see this channel for what it really is and offer the viewing public some credit for enjoying quality informative programming.

Shace you are wise and spot on the money! A very short sighted view by the government, but hey they seem to have their head buried in the sand about everything else... so why not on quality TV??? If only Labour had a half decent candidate for PM...

TV is changing and TVNZ has missed the boat. They had a stake in Sky, but sold it, losing hundreds of millions from what it would be worth now .
They're a poor performing company, with a bad business model in a risky industry.
They're trying to catch up with technology such as their investment in TIVO and all the other toys, but don't have the content or expertise, so only succeed in losing money on every screen
As a taxpayer, i'm an unwilling investor.
Sell them tomorrow