TVNZ profit takes nose dive on Disney content write-down
Television New Zealand has announced a near 90 per cent plummet in its net profit as it waits to find out whether it will face a less commercial future after next month's election.
One of the ideas in play from NZ First is that channel TVNZ 1 could become advertisement-free.
TVNZ's profit for the year to June slumped to a little over $1 million, from more than $12m last year, after it wrote $12m off the value of a contract it signed more than five years ago to buy programming from Disney.
Chief executive Kevin Kenrick said much of Disney's content was now streamed online by rivals.
That meant the price TVNZ will pay the US studio for its shows during the "couple of years" the contract has to run will likely exceed the value of the advertising those programmes will bring in.
Broadcasters around the world, including Australia's Nine network, had made similar write-downs of purchasing contracts which had pushed others into administration or receivership, he said. "We have been able to make these adjustments and keep our head above water."
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TVNZ's advertising revenues dropped from $304m to $299m, though Kenrick was encouraged by a year-on-year increase during the final quarter of the financial year and a "strong start" to its new financial year.
NZ First has proposed removing all advertising from TVNZ 1 in its election policy.
The channel would instead be funded from an increase in the Telecommunications Development Levy which would be extended from phone companies to commercial broadcasters and internet-television companies such as Netflix.
Labour broadcasting spokeswoman Clare Curran said it planned to soon release what she described as a "significant" policy statement on broadcasting.
She declined to comment on NZ First's proposal or whether Labour's new policy could dovetail with it.
"There is a commitment to public broadcasting and that's all I can say. Clearly, NZ First is committed to public broadcasting and we are pleased about that."
NZ First's proposal has been applauded by Myles Thomas, director of the Coalition for Better Broadcasting lobby group.
"Turning TVNZ 1 into a non-commercial channel is a bold idea that will appeal to many voters," he said.
"With this policy they've set the benchmark for other parties that are serious about public media in New Zealand."
Kenrick said TVNZ had been adaptable, and clarity was more important than the direction the government of the day wanted to take.
"The worst position is to be undecided or lurching back and forth between one view of the world versus another."
TVNZ would this year tilt its spend towards locally-produced news and entertainment, he said.
It would also increase investment in its internet television service TVNZ OnDemand "with a big focus on 'search' and 'discovery' and how people can find and organise the content they want to see".
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