TVNZ RNZ merger: Did Cabinet get it right?

  • 28/02/2022
Glen Kyne, Senior Vice President and General Manager of Discovery Australia, New Zealand
Glen Kyne, Senior Vice President and General Manager of Discovery Australia, New Zealand. Photo credit: Discovery

By Glen Kyne, Senior Vice President and General Manager of Discovery Australia, New Zealand

Generational change to our media sector is imminent.

It appears the will-they-won’t-they courtship between TVNZ and RNZ has finally reached a resolution, two years after the first Cabinet paper on a proposed merger to create a Stronger Public Media entity was tabled.

As TVNZ’s only major direct competitor in New Zealand, Discovery has obviously taken a keen interest in where this relationship is going, what it means for NZ audiences, the advertising industry, production community, and the broader ecosystem we operate in. We’re hoping that the decision is one that serves the public and the industry by creating a new public entity that runs as a not-for-profit.

As it stands, we have a state-owned broadcaster who is commercially focused and driven to return a profit and dividend to Treasury. That leads to decisions that are inconsistent with public media goals and that are not necessarily for the public good but are completely sensible when viewed through the lens of a “profit first” mandate. Some of the things we are watching for in Cabinet's decision is the change in mandate, profit or not, the governance model, the impact of the charter on what audiences will end up watching on screen, and the flow on impact this has on the entire media industry. As one of the only western democratic societies without a mainstream television public media mandate, the change will hopefully see the state broadcaster’s priority being for the public good.

To be clear, we’re not suggesting the new TVNZ/RNZ has no commercial imperative. On the contrary, we need a vibrant commercial sector in New Zealand and therefore a commercially strong TVNZ with high reach audiences and value to the advertising community - that’s good for everyone, not least because it helps stem the tide of ad dollars heading towards Google, YouTube and Facebook/Meta. But it must be an even playing field, funding of the new Public Media entity should not unfairly disadvantage others, and that profit should be funneled back into building the industry to be stronger, more diverse, and sustainable.

It makes sense that under a charter, New Zealanders benefit from a public broadcaster with a focus on reaching New Zealand’s diverse audiences, telling our unique stories, and nurturing the talent we need to fulfill these opportunities. A not-for-profit model has the potential to create a broadcaster who collaborates with the industry, works with and not against, finds efficiencies and uses its resources to champion the industry and promote growth. 

Take the 1pm press conferences we all became glued to over Covid as an example. This new public entity could set up and share the news feed across multiple news media platforms, Television, Radio, Digital etc, therefore allowing other newsrooms to invest more resources into holding that government to account and providing editorial analysis and insight that makes a difference to New Zealanders. The collaboration under a source and share model could help the challenges with funding large scale newsrooms and make them more sustainable. 

A public entity, pending the funding model, could help expand the allocation of funding (NZ On Air, Te Mangai Paho, NZ Film Commission) to more creatives and production houses across NZ. These contestable funds could be strengthened by the returns of the stronger public media entity being allocated into these funds. New Zealand's creative community could further thrive and grow with more access to these initiatives, assuming of course the Public Media Entity is not taking the lion's share of this funding. 

A public entity could help us celebrate the vibrancy and diversity of NZ media, championing our industry to encourage new entrants into journalism, production, acting, comedians, technical crafts, writers, communications professionals…the list goes on. While we write about the pressure on the local industry, we need to celebrate the innovation and success that our sector is driving. TVNZ is in strong shape; it has a strong balance sheet and strong assets across linear and on-demand / streaming performing well. RNZ regularly tops audiences in quarterly radio surveys and continues to innovate its digital audio portfolio. NZME has just announced a strong financial result in its latest earnings call and is primed for future investment. MediaWorks is launching a new talk radio strategy and no doubt continues to look at other growth opportunities. Stuff continues post management buy-out to carve out a successful future path, again innovating rapidly in digital first operating models. 

Sky continues to secure valuable sports rights, and while Covid has created a number of challenges for Sky, it continues to refine its operating model for the benefit of its audiences and shareholders. Let's also not forget that a very large number of homes consume their “television” content via Sky and will continue to for some time. 

Our sector is in reasonable shape despite the headwinds faced and the challenges of operating in a small market. For our own operations, Discovery has brought growth, confidence and calm to the sector and is bringing investment into content, employment, news and current affairs, new platforms and has a growth mindset that will benefit New Zealand audiences across FTA television, pay television with Sky, Digital platforms and soon paid streaming.

New Zealanders are excellent at telling stories, and we at Discovery have a goal to harness that and use our global reach to bring the uniqueness of Aotearoa to the world. We can and will do that on our own, but how much better to be collaborating with the new Public Media entity as part of the government’s vision for what we could achieve. 

It would also make sense for a new public entity to harness and advance digital opportunities to reach new, younger audiences. A core requirement at the same time will need to be a model that supports free-to-air linear Television that is free to view. Streaming might dominate the discourse, but free-to-air and free to view remains an important part of the broadcasting ecosystem, both commercially and for public good. This is not going to change anytime soon for many, many New Zealander's.

Of course, a not-for-profit model benefits Discovery, but the ripples would go far wider. If Cabinet gets this right, we could have a public entity focused on supporting the incredible pool of creative, production, and journalistic talent in New Zealand, ensuring we hear from and see the widest possible representation of this country, and assisting the industry to navigate the increasingly fragmented landscape of information.

There are many questions to be answered, such as what governance and operating model will the government reveal to us this week, will it strengthen or weaken competition, how will it be lead and decisions be made, how will the charter function and govern it’s activities, what culture will take hold, how will the mixed funding model work, for profit or not, and what may a change in government do to unwind this generational change.

Notwithstanding the answers to these questions, a reinvigorated public broadcaster, clear in its goals, isn’t just Discovery’s ideal scenario, it’s the right one for all of Aotearoa.