TVNZ dividend relief tied to refurbishment cost for no more than three years

State-owned broadcaster Television New Zealand is still ironing out the details of its dividend relief with its shareholding ministers, which will be linked to the cost of upgrading its Victoria St West building and won't go beyond 2016.

The Auckland-based broadcaster today announced the sale of two plots of prime Auckland real estate to SkyCity Entertainment Group for $10.6 million, enabling the casino operator to build a convention centre in the city's central business district.

TVNZ agreed to the sale after reaching agreement with shareholding ministers Bill English and Craig Foss to forgo dividends net of the sale proceeds, and allow the cash to be spent on refurbishing the broadcaster's main Auckland building on Auckland's Victoria St West, where it plans to house its staff.

A spokeswoman for Broadcasting Minister Foss said the level of relief will depend in part on the cost of refurbishment, which is still being worked through, and won't be for longer than three years.

TVNZ's board didn't declare a dividend to the Crown today, when announcing a 1.4 percent lift in annual profit as it managed to slice costs faster than it lost advertising revenue. The broadcaster was targeting a return of $7.7 million in the 2013 year, according to its Statement of Intent, rising to $9.8 million in 2014.

The Crown-owned company plans to spend two years upgrading its online technology "to fully integrate systems that will support the automated delivery of video content to all its on-air and online platforms," it said in a statement.

Online revenue jumped 21 percent to $9.9 million, rising to 2.7 percent of the broadcaster's total revenue from 2.1 percent a year earlier.

Consumer demand for greater viewing choice and flexibility has been the driver for this (gain in online revenue), boosted by the launch of our OnDemand app for Apple devices in February, which immediately translated into a step change in viewership," chief executive Kevin Kenrick said in a statement.

Ericsson ConsumerLab research published last week found about 28 percent of New Zealanders watch TV and video content on tablet devices, 30 percent watch streaming video on smartphones and 6 percent view live TV shows on smartphones.

TVNZ views itself as a digital media company, rather than simply a broadcaster, as it looks to adapt to a changing media environment and reduce its reliance on dwindling ad revenue.

Among ways to drive the shift to digital, the state-owned company's 2014 statement of intent says it plans to integrate its on-air and online news teams, focus on content rather than the platform delivery, encourage viewers to watch online, and support the Freeview set-top box with broader content propositions.

(BusinessDesk)