TVNZ’s announcement that it will put all its channels on Sky TV is too coincidental to ignore.

A major weakness of Freeview  – and coming “Freeview on steroids,” TiVo – is that it lacks Sky TV’s free-to-air Prime, home of delayed test match rugby, many a good doco, Top Gear and Mad Men.

As someone who doesn’t have Sky, I can tell you that Prime’s absence from Freeview is the key reason I don’t go out and buy a MyFreeview hard drive recorder.

Similarly, it would stop me buying a TiVo box.

Just a day ahead of TVNZ’s TiVo announcement, the state broadcaster said it would finally relent, and make the high definition versions of TV1 and TV2 (formerly only available on Freeview HD) available to Sky TV. Ditto for TVNZ6 and TVNZ7.

TVNZ will benefit from the wider audience and geo-targeting provided by Sky TV, but I would be very, very surprised if there hasn’t been some horse-trading behind the scenes.

Surely, the quid pro quo is for Sky TV to make Prime available for Freeview, which in turn will feed broadcast content to TVNZ’s pending TiVo service.

Sky TV chief executive John Fellet has always maintained he’s not boycotting Freeview in a tit-for-tat.

Rather, in a chicken and egg scenario, he says he’s waiting for Freeview go gain a large enough audience to generate enough advertising income to cover his costs of moving Prime to the platform (Freeview’s charges, as exclusively revealed by NBR, include a $1.8 million annual fee to Kordia to broadcast an HD channel; $500,000 to Kordia to broadcast an SD – standard digital – channel, and a $100,000 admin fee to Freeview).

But now, I think it’s likely a backroom deal (probably revolving around the HD versions of TV1 and TV2 rather than the more marginal TVNZ6 and 7) will see Prime on Freeview.

If that’s not enough, Broadcasting Minister Jonathan Coleman’s call for an industry summit to get Prime on Freeview should tip the balance.

Politicians know that free-to-air rugby matters (Prime’s current free-to-air iteration, broadcast via UHF, only has about 75% reach. On Freeview’s satellite service it could reach the whole country.)

And John Fellet is a politically-savvy chief executive.

He knows that now there’s only one way he can move.

Money in TiVo?
In the US, it took TiVo 11 years before it turned its first profit – and that was with the advantage of monthly fees. (Here, TiVo boxes will only have a one-off cost, a la Freebox, though there will be paid movie and TV content delivered via broadband, too).

Beyond the likelihood that Prime will come onboard Freeview, it's hard to immediately see TVNZ's commercial angle for launching TiVo here.

Chief executive Rick Ellis says ANZ TiVo licencee Hybrid (now one-third owned by TVNZ)  wants to sell 120,000 TiVo boxes in New Zealand over its first five years.

That's not exactly shooting for the stars, given that Freeview moved 100,000 boxes in inside 18 months.

A half decade is a long, long time to wait until advertisers get even a modest audience for TiVo's various viewer tracking tricks.

Mr Ellsi is being forced to think long term, however. Analogue TV broadcasts will be swtiched off some time after 2011 (most pundits think around 2014), so now is the time to prepare for the all-digital age, and the TVNZ chief executive obviously doesn't want Freeview to be the broadcaster's only vehicle.

Another angle: Mr Ellis stresses that TVNZ didn't just buy into Hybrid to gain New Zealand rights to TiVo. He and TVNZ CFO Rodney Parker will comprise half the ANZ TiVo licencee's newly-established board (at least for now).

"This is about us participating in an Australasian business," Mr Ellis says.

Now that's thinking bigger than 120,000 units.