Fraser shows TVNZ giving lip service to Charter14 December 2005
13 December 2005
Fraser bombshell shows TVNZ
giving lip service to Charter
A memo to the
TVNZ Board from then CEO Ian Fraser says the state
broadcaster has become virtually indistinguishable from
commercial channels and is giving no more than lip service
to its Charter obligations, Green Party Broadcasting
Spokesperson Sue Kedgley says.
The document, titled "A
More Public Broadcaster" and dated "October 2005", was
obtained by Ms Kedgley. It says TVNZ's local content will
"shrink markedly" next year to 36 percent, the same level it
was before the Charter, and that it will give priority to
commercially driven Charter programmes that "deliver maximum
commercial value and maximum audience share and protect our
channel shares from competitive erosion." Further, he warns
that TVNZ is faced with "the reality of having to can such
Charter initiatives or consigning Charter programmes to
inhospitable places in the schedule unless they are 'sure
bets'."
"This memo shows that the man who was at the helm
of TVNZ believed that its current mixed model is failing to
deliver on its Charter goals because they are essentially
incompatible with its commercial priorities," Ms Kedgley
says.
"Fraser says 'the texture of our schedule is
profoundly incompatible with any recognisable model of
public broadcasting' and warns that the organisation has
'made a u-turn' away from its public service television
mandate and is becoming almost totally focused on commercial
objectives."
"Ian Fraser's bombshell suggests it's time to
acknowledge that the present split focus of TVNZ has failed
to deliver public service television and to begin a
fundamental review of its mandate and direction.
Mr Fraser
proposes three options for restructuring TVNZ to better
deliver public service television - making TV One a fully
funded, non-commercial public broadcaster entirely charged
with delivering Charter values; making TV One a
semi-commercial broadcaster screening no more than six
minutes of advertisements an hour; or adding two new public
service digital channels.
ADVERTISEMENT
"I hope the Government, and
Parliament, will seriously review the three models Mr Fraser
has proposed for restructuring TVNZ to give it a genuine
public service emphasis - in particular his proposal to
convert TV One into a non-commercial public service
broadcaster.
"With 13-14 minutes of advertising every
hour, and a minority of New Zealand programmes screening on
both channels, it is hard for viewers to accept that TVNZ is
public service television," Ms Kedgley says.
Mr Fraser
points out that TVNZ's level of local content is "much lower
than what most similar public broadcasters world-wide
deliver," while its level of advertising - 13-14 minutes an
hour - is higher than comparable public service television
channels around the world.
"This is an indictment on TVNZ
and the Government for allowing this to happen." Ms Kedgley
says.
***********
Ian
Fraser's memo
Is this as good as it
gets?
The Government obviously believes that we don't
stop here. Its vision for public broadcasting is dynamic and
expansive. In its Programme of Action, it declares its
intention to build "a strong and sustainable public
broadcasting environment for New Zealand".
To this end,
since 2000 it has:
* transformed TVNZ from an SOE into a
Crown company, with a set of statutory objectives laid out
in the TVNZ Charter.
* funded TVNZ directly for Charter
purposes. Amounting to about $15 million per year (after
GST), this is the first direct funding from the Government
to the broadcaster in more than 20 years.
* Set the
course towards digital television in August 2003, via
Cabinet endorsement of an extensive Cabinet Committee
report.
In charting the way forward, the Programme of
Action is critical of the fact that because TVNZ relies on
commercial income to a level beyond that of any comparable
nation's public television broadcaster, its behaviour is too
influenced by commercial considerations, whereby "viewers as
consumers are given greater emphasis than viewers as
citizens". Later in the document it underlines the
desirability of public broadcasters not being "dominated by
commercial pressures" and not being driven towards the goal
of "maximising ratings on a commercial model".
The
Programme of Action is clear about what constitutes true
public broadcasting (within a mixed market model). "[Public
broadcasters] are expected to consider the interests of a
range of audiences beyond the demographic groups that
commercially-driven broadcasters are obliged to deliver to
their advertisers. They are charged with providing ... a
comprehensive service covering all aspects of the nation's
life".
It commits the Government to strengthen public
broadcasting by, inter alia, "investigating an appropriate
ratio of commercial to non-commercial funding for TVNZ, as a
guide, to assist in fulfilling the Charter" and places a
priority on the need "to achieve adequacy and certainty of
funding for public broadcasting".
It states: "It is
crucial that TVNZ be enabled to plan with greater confidence
and to develop the comprehensive service intended by its
legislation" [my emphasis]. It also observes that while TVNZ
should have increased resource available for investment in
its mandate as a Chartered public broadcaster, the company
"will be required to demonstrate efficient and effective
capital use".
What's wrong with the current
model?
* Following one year of increased investment
in and much enhanced delivery of local content (average
across both TVNZ channels of 40%-plus in FY2005), the level
of local content on TVNZ will shrink markedly in 2006 and
the outer years to about 36%. This is no more than the local
content ratio we were achieving prior to the introduction of
the Charter. It is a level of local content much lower than
what most similar public broadcasters world-wide deliver. It
makes it hard for us to sustain the claim that local content
differentiates TVNZ from its competitors and is, indeed, the
key element of TVNZ's "Charter difference".
* In the
light of more or less static direct Charter funding in
FY2006 (and an expected fall in advertising revenue), we
have prioritised our local content to deliver maximum
commercial value and protect our channel shares, so far as
we can, from competitive erosion.
This entails a
re-weighting back towards commercial performance after a
couple of years of steady progress in delivering greater
Charter value. A higher priority has been placed on ensuring
that the shows we commission are more commercial and able to
yield audiences that meet our commercially determined
ratings and share targets.
This approach, which will
intensify as the economy tightens, greatly limits our
capacity to make challenging scheduling decisions in line
with the values of the Charter. The game is about maximising
audience in an environment that is no longer a seller's
market. We find ourselves, in a contracting environment,
less able to sustain the opportunity costs that flow from
scheduling a "Charter programme" that under-delivers against
our channel ratings and share targets -- when an
internationally sourced programme acquired for a fraction of
the price would be much more likely to deliver effectively
against them.
* In spite of the increase in the
level of local content we have been driving towards, we have
not yet measured any significant increase in viewer
satisfaction - nor any marked public conviction, after more
than two and a half years experience with the Charter, that
we are more of a public broadcaster than we were before it
was introduced.
The Minister of Broadcasting observed in
July 2005 that "in true New Zealand form, TVNZ have been
knocked from pillar to post for not doing [the Charter]
enough, not doing it quickly enough, not doing it well
enough and not doing it years ago". He went on to state that
"TVNZ are only a short way down the [Charter] path and we
can all look forward to the journey ahead". In fact,
currently the signs are that in many important respects we
have made a U-turn and are retracing our steps back to where
the "journey" began.
* We recognise that we have a major
commercial performance problem with ONE. Work is underway to
restore the performance of ONE News, which drives success -
or failure - through the entire peak time schedule. However,
News is not the only factor in the channel's
under-performance.
We are starting to measure the
opportunity cost associated with some forms of Charter
delivery. We are faced with the reality of having to can
such Charter initiatives or consigning Charter programmes to
inhospitable places in the schedule unless they are "sure
bets".
* The texture of our schedule is profoundly
incompatible with any recognisable model of public
broadcasting. Public broadcasters in the rest of the world
do not broadcast 13-14 minutes per hour of advertising. Our
need to do this to "maintain our commercial performance"
means that many viewers regard us as being more driven, as a
consequence of our dependence on advertising revenue, to
sell them things to meet the needs of advertisers rather
than to meet their diverse needs as viewers.
The "static"
generated by the weight of the commercials we carry impedes
our ability to present ourselves with conviction as a
Chartered public broadcaster and scrambles the message to
viewers that we have a commitment to re-balance TVNZ away
from straight commercial to more public broadcaster
objectives.
* Bob Collins, the former Director General of
RTE, in his speech to the Public Broadcasting Conference in
Wellington (21 November 2003), stated that one of the "clear
and succinct" statements that can be made about public
service broadcasting is that its character is reflected in
comprehensive schedules, not in individual programmes.
"The public character is reflected in the overall
schedules and is not something which inheres in individual
programmes which are then distributed across a schedule
somewhat like sultanas in a fruitcake". The best that TVNZ
has managed to achieve under the current model is the
"sultanas in a fruitcake" approach (also known as
"pepper-potting"). Now, under the combined weight of a
slowing economy and the opportunity costs exacted by some
Charter programming decisions, we are looking to cut back on
the sultanas....
Where to from here?
There appear
to be three options, apart from the default option of doing
nothing:
Option One
Make ONE a fully-funded,
non-commercial public broadcaster, charged to deliver the
values of the Charter. Make TV2 fully commercial, divested
of Charter responsibility, with a remit to generate optimum
commercial revenue to help underwrite ONE.
* In a
Mediawatch discussion with the Minister of Broadcasting (13
February 2005), it was suggested that a non-commercial
public broadcaster could be run for about $140 million. A
more informed back-of-the-envelope estimate (based on what
it costs to run ABC Television) suggests that the cost of
the service would be closer to $200 million. Whatever, it
would almost certainly entail major down-sizing, since it
would be a simpler institution on a smaller scale from a
fully commercial model.
* The cost of international
product would be cheaper because public broadcaster content
is typically much less expensive than commercial
programming.
* It would allow for the merger of ONE,
Radio New Zealand and, possibly, MTS (all the public
broadcasters). They would share a common remit and, in the
case of ONE and Radio New Zealand, a common non-commercial
basis of operation.
* This model is not a hybrid, as the
current paradigm is. It is clearly a public broadcaster and
would be readily identified by the public as one.
* It
falls in the category of "marginalised public broadcaster".
Steve Maharey has publicly taken a stand against that
solution and so has TVNZ.
* Audience share would fall
from around 30% now to as low as 10% (cf BBC2, RTE2, the
ABC). However, from an advertising revenue point of view
this would not matter.
* The fiscal value of ONE would
plummet. Other media, business and political voices would
attack the Government and TVNZ for generating a massive
collapse in shareholder value.
* The funding would come
in the form of new money from the taxpayer. The Government
has stated on many occasions that this solution cannot be
afforded. Mr Maharey said on Mediawatch (13 February):
"Having made that step there's no way that you could put it
to the public to go back to it, that's for sure, so you need
now to work out the common tax take. The vision, I suppose,
that we're working with, with Television New Zealand, is
that here's a company that earns $300 million-plus a year.
Every single one of those dollars should be put to the
task of providing us with a public service television
channel and where they can identify areas that they can't
address with that funding, they ought to be going to New
Zealand On Air, which they traditionally do for funding for
particular programmes, and we've agreed, of course, to work
with them to provide extra funding so that they can meet
that mandate".
Option Two
Make TV2 fully
commercial, divested of Charter obligations. Make ONE
semi-commercial - the Charter channel. This hybrid approach
on ONE rests on the proposition that you can be both a
public broadcaster and a commercial business. As Bob Collins
said in the speech quoted earlier:
"Perhaps the most
evident and at once the most complex of the challenges for a
public broadcaster, if it is dual funded, is how to square
the circle of public remit and commercial resource. Can you
be a public broadcaster in your schedule with commercial
revenue in your bank account? Can your schedule be public in
its character if it is partly commercial in its funding?
Does the funding shape the content?
"Dual funding is a
well-established reality in many states. In many cases,
especially in small countries, it was and remains a
practical response to real situations. If advertising alone
were the funding source, how would the public responsibility
be provided? How would you guarantee plurality from a small
economy?
If public funding alone were the source, how
could the small population guarantee the comprehensive range
of services without the economies of scale? This issue was
easier to resolve in other times when competition was less
widespread and when the measures of success or failure were
less influenced by market criteria.
"It remains, however,
one of the decisive tests. Is the hybrid possible? I believe
that it is. It is not easy. It becomes progressively more
difficult but all my experience tells me that it is still
possible..."
Under this option, the balance would be
tilted much more towards public broadcaster/Charter value on
ONE - perhaps in the order of a 70/30 Charter weighting.
* ONE would carry about 6 minutes an hour of
advertising, more tactfully scheduled than is possible
currently. This is the weight of advertising carried on RTE
and our friends there tell us that it is not so great that
it alienates viewers and provokes them to view RTE as a
commercial rather than a public broadcaster.
* Since ONE
will be targeted more to the "A/B's" (the decision-makers,
influencers, "the chattering classes") and there will be
less inventory available for sale, some areas of the
schedule may attract an advertising premium.
* The target
should be to hold a minimum $60 million commercial revenue
on ONE to help underwrite Option Two.
* Audience share
will fall steeply but not as far as in Option One. Perhaps
to 15%.
* Less or no "pepper-potting" of Charter
programmes. With less pressure to maintain an effective
commercial yield, it will be possible to schedule a much
greater weight of public broadcaster programming and much of
it at more accessible times. * We would still come under an
onslaught for reducing the commercial value of
ONE.
* There would almost certainly be a need to separate
ONE and TV2 institutionally (as there would be in Option
One). It would be almost impossible to make a success of
running one organisation with two such conflicting mandates
- even though the conflict is less radical in Option Two
than in Option One, since TV ONE would still earn
commercial revenue and carry a volume of "commercial"
programmes. TV2 could be run as an SOE and levied to help
support ONE.
* A different cost structure for ONE entails
significant down-sizing and a complete
restructuring.
* Could be funded from a combination of
sources: -- commercial revenue, bulk-funding from NZ on Air,
a levy on TV2, but would still require very significant new
taxpayer funding (perhaps $80-$100 million).
Option
Three (The Third Way)
Keep One and TV2 as they are now
- delivering as much Charter value as they can manage while
rocking and rolling within the constraints of a tightening
economy and the requirement to maintain commercial
performance.
This Option means we should not attempt to
"spin" the current mass audience operation as if it were a
full public broadcaster according to international
benchmarks - though TV ONE and TV2 are obviously much closer
to the public broadcaster end of the spectrum than our
commercial competitors. TV ONE and TV2 would continue to
receive direct Charter funding at or above current levels in
order to acquire and commission Charter programmes. They
would continue to access funds from NZ On Air.
Channels
ONE and 2 would maintain a high audience share and generate
substantial commercial revenue, while pursuing a remit to
give the people of this country New Zealand broadcasting
with a quality and range of content that simply would not be
provided if a strictly commercial approach was the only
basis of what we do.
Added to ONE and TV2, however, we
would provide a clearly recognisable full public
broadcasting option on the digital platform(s). Option
Three is based on the following proposition:
* Make the
first two (or three) new channels on the digital platform(s)
pure, non-commercial public broadcast channels. This would
mean that the way we begin to inhabit the digital space
would be much closer to the pure public broadcaster end of
the spectrum than where we are at currently with ONE and
TV2.
* The channels we have been working on are already
close to this model. Under Option Three the factual channel
would include (a) a lot of public broadcaster programming we
don't currently buy (particularly high end international
documentary content), and (b) a range of time-shifted news
and factual programming acquired from ONE where it has had
its first run, and (c) a range of minority programmes placed
at more accessible viewing times, and (d) a greater
proportion of first-run local content, including Question
Time in parliament and, perhaps, programmes like Agenda.
The second digital channel devoted to children would
follow the line currently proposed but the night-time
schedule might be devoted to serious drama and arts rather
than the more commercial lifestyle-oriented concept now
contemplated. Again, there would be a mix of re-run and
first run programming - with a greater balance of first run
than has been considered until now.
* This approach can't
credibly be stigmatised as "ghettoising the Charter". These
pure public broadcaster channels will be available free to
air: you don't have to pay a monthly subscription to gain
access - you must acquire, at a minimum, a set top box.
* Public approval will depend on how quickly we can get
onto free to air digital platforms. If this new dimension of
public broadcasting, delivered on digital, can't be
guaranteed within about a year, the Option becomes less
politically attractive and the public are likely to develop
a cynicism towards it. "Jam tomorrow" is not a slogan this
electorate shows signs of warming to.
* Takes some of the
heat of remit conflict off ONE in particular. ONE no longer
has to schedule an increased weight of Charter programming
where the opportunity cost analysis suggests there is
intolerable commercial risk. There is another place, within
the state broadcaster's stable, where pure, non-commercial
public broadcasting would be readily and universally
available for those who want it.
* No destruction of
fiscal value of ONE and no risk of a decline in audience
share.
* Estimated cost: $40-50 million in new public
funding.
Ian Fr
Source: scoop
All trademarks and copyrighted information contained herein are the property of their respective owners.
Related Articles
|
