Tensions in the TV world
Happy 20th birthday Sky Television. You've been in the Pay TV business for two decades now, gathered virtually half the homes in New Zealand as subscribers and you're turning a bigger profit than any of your rivals.
And you thought you'd get away with that? Being a successful business model is not going to make you popular with your competitors, and some politicians and commentators.
A Business Herald story by John Drinnan airs the grievances and arguments that have largely, till now, simply bubbled under the surface in places like the boardrooms of TVNZ, MediaWorks, and the Ministry of Culture and Heritage.
The litany goes that Sky is becoming too powerful, that it will snaffle all the good programme rights for both Pay TV and Free to Air and the other broadcasters will starve. "We need regulation of the broadcasting market," comes the cry.
If the other broadcasters face starvation it is hardly Sky's fault.
MediaWorks, which owns TV3, C4 and RadioWorks, has a bad case of the speed wobbles right now.
Private equity firm Ironbridge bought the broadcaster for $790 million and now its holding company that controls MediaWorks finds itself more than half a billion dollars in debt, facing huge interest bills.
The problem isn't that TV3 and RadioWorks aren't making a decent profit, they are - despite a 15 per cent drop in revenue. The problem is that its owners are far too highly leveraged.
This is the debt recipe that internationally has caused the collapse of many major publishers and communications companies.
Ironbridge is maintaining a brave face but watch this space.
But one thing is clear, MediaWorks' issues have little or nothing to do with Sky.
Meanwhile TVNZ is unlikely to show a true profit, despite its $350 million or more in commercial revenue.
Its problems have noting to do with leveraging. It carries relatively little debt.
TVNZ, until recently, was being strangled by a structural issue. The previous government required it to deliver a social dividend through the Charter while at the same time trying to extract a 9 per cent return on capital.
TVNZ became an unworkable business model as it pursued a dual remit of having to run Charter programming that reduced its audience and revenue while striving to reach the unreachable dividend targets set by Treasury.
Not surprisingly it failed at doing both.
The failure to reach revenue targets, decent dividends and a profit are not really the fault of management and are more due to the unfairly tilted playing field.
Yet insiders are now saying some big changes are likely to happen at upper levels of TVNZ management as a result.
Whatever the case, TVNZ's problems have little to do with Sky TV.
Broadcasting Minister Jonathan Coleman has levelled the playing field, at least for TVNZ, by removing the Charter and giving it a free hand to commercially compete.
He seems to have opted for the plan originally proposed by former TVNZ CEO Ian Fraser and instead concentrate on getting the digital channels TVNZ6&7 to deliver "charter" type programming.
He has been criticised for pushing the two channels on to the Sky platform, but I cannot understand why.
It means these two publicly funded channels can now at least be seen by half the country that has a Sky decoder rather than the handful of people who used Freeview or bothered to download programmes from them on the net.
I can see no reason to regulate against Sky to help the profits of Free to Air broadcasters.
Yet there are increased mutterings from within Labour about "anti-siphoning" legislation to prevent Sky from having international rugby and other major sports events on Pay TV.
A logical extension of that would be to try and block Sky from getting the rights to other big-rating movies and entertainment shows.
Do we really want to get into the situation where the state dictates what TV programmes are played on what channels?
Governments can do lots of things well but programming television stations is not one of them.
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My Sky bill has just jumped from $65 to $80 because I have HD even though only a portion of programmes are actually in HD. Clearly there's an acceptance in NZ that it's worth $20 a week to get stuff not available on FTA. I'm not sure why Bill but you seem to suggest it's a whacky idea to even contemplate anti-siphoning laws when our next door neighbours the Australians who have a much more commercially competitive TV market take it for granted that Governments of all hues there protect certain events for FTA viewers.
Funnily enough, I've been watching a hell of a lot of C4 recently, which is probably the most shoestring of all the channels! They're cheap, cheerful and have a good variety of (often old) shows. Proves you can run a champagne channel on a beer budget.
Bill, you said governments can do a lot of things well? I'm struggling to think of one except giving our best and brightest incentives to leave for Australia.
It is common knowledge, as well you know Bill, that TVNZ deliberately set out to destroy the charter from day one. By playing crap charter programs at prime time and the good charter programs at 2am, also by putting most of the charter money in News/current affairs type programs was also designed to destroy the charter. Unfortunately the arrogant nature of TVNZ still prevails
I agree Jim.
Also playing really good shows like Entourage and The Wire at 11:30PM is just stupid. These are very good shows that would rate well in a good timeslot.
Sky TV have always been very arrogant...they used to push Gridiron and baseball because their ( American ) director thought NZ'ers should/would accept them. Finally woke up. Cornering the market in NZ national sports by offering the Sports bodies more cash is not nationally beneficial. We then pay a lot for what used to be free and was more accessible ( TV-1, wide reception ).
Their digital broadcast quality had always been garbage - because they had a monopoly on it. A Freeview HD box will give far better signal quality ( 1,2,3,7,c4,Parliament etc ) than normal Sky. The new Sky HD may be up to scratch, finally, but too costly......and they rub it in your face - putting adds for it on screen during broadcasts like Tour of France, which may have been digitally downgraded ( looked like it ) to sell the HD alternative.
They were never supposed to run advertsing.....but did. Now nearly as much as 1,2,3 . Sky is a monopolistic unit that should have been regulated, but now forces us to pay heaps to watch 'normal' programs.
Big issue this week is the smacking Referendum. 570,000 people voted in the first week. And now there's the ideal song to go with it - dedicated to Sue Bradford. There's a lot of spanking in it and it ends with Sue Bradford getting her bum spanked in Parliament. Quality recording, too. Justifies decent radio play.
So...THE SPANKING SONG - Sue Bradford style , is a Free mp3 download at bobberesford.com
I have canceled my sky and now have internet on my big TV and freeview HD only, next to go will be the phone (landline).
Bob
Freeview HD is great.
I got satellite Freeview and rated that so was more than happy to have a HD decoder in the new TV I got. Great reception.
My TV spends ages on C4... most of the weekend. Good music and movies are shown on Sunday nights... not rubbish CSI's and all those other 3 letter initialism shows.
Prime on freeview... sweet. About time too. Could receive it free-to-air anyway, but the reception made it unpleasant and without the on-screen-guide I'd always forget about Prime too. Will watch Prime heaps more now I'm sure (Top Gear, Man vs Wild, Mythbusters, Rugby replays...). Thank goodness Sky has seen the light.
"Governments can do lots of things well..."
Name one.
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The starkest example of how bad TV3 is and the slippage we are seeing from TVNZ is that Sky can now recycle repeats after repeats, delay the speed they put movies on to take advantage of their "box office". Sky have dropped the ball quite badly over the last 12 months because they have NO competition but they need to look out as technology does not stand still. They are repeating the same Simpsons shows they have been playing for the last few years, same with Birds of a Feather, back to the beginning with Silent Witness, re-running Frazier but out of sequence. The Living channel is showing aspiring property developers pre crash.
To be honest I cant remember the last time I watched something on TV3 and I used to quite like them, especially the news but no one can stand Garners love of Helen Clark and Labour (we had a sweepstake at work, we thought Garner might have gone to NY instead of H2). Thank god for Paul Henry.