The Government has announced that a new public media entity "built on the best of RNZ and TVNZ" will launch in mid-July 2023.
Broadcasting Minister Kris Faafoi said the new entity was necessary to keep up with "changing audience demands and ways of accessing media, falling revenue, and new and emerging digital platforms".
"RNZ and TVNZ are each trying to adjust to the challenges, but our current public media system, and the legislation it's based on, is focused on radio and television," Faafoi said on Thursday.
"This is why the Government will create a new organisation by the middle of next year, built on the best of RNZ and TVNZ, to future-proof public media for New Zealanders for decades to come."
Faafoi said the two public broadcasters needed to adapt to modern ways of accessing media, with more Kiwis using their phones and internet-based platforms over television and radio.
"We must be sure our public media can adapt to those audience changes, as well as other challenges that media will face in the future."
But Faafoi confirmed the new entity won't be ad-free. It will carry advertising, "while ensuring services which are currently commercial-free will remain so".
Glen Kyne, Senior Vice President and General Manager of Discovery Australia and New Zealand, which owns TVNZ's competitor Newshub, recently wrote that he hoped the new entity would run 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."
Faafoi said a business case, which looked at the feasibility of and best approach to creating a new entity, emphasised the importance of public media and its role in society.
But Faafoi said it also warned that New Zealand's public media was struggling to retain audiences and attract new ones, particularly young people, in the face of access to global platforms.
"The new public media entity will be built on the best of both RNZ and TVNZ, which will initially become subsidiaries of the new organisation," Faafoi said.
"It will continue to provide what existing audiences value, such as RNZ Concert, as well as better reaching those groups who aren't currently well served; such as our various ethnic communities and cultures."
The entity will be an Autonomous Crown Entity with complete editorial independence receiving commercial and Crown funding, Faafoi said.
It will "provide quality public media content to all New Zealanders, including groups who are currently under-served or under-represented". It will also "deliver on the Crown's Te Tiriti obligations and provide Māori stories and perspectives".
Faafoi said an Establishment Board will be appointed next month to oversee the detailed design of the entity and the change process, with the aim of having it operational by July 2023.