Ralston reports on the TV Wars

On a couple of occasions Adam has posted on the review of broadcasting underway:-

1. TVNZ unable to deal with competition
2. TVNZ a suitable case for derision
3. Sport is critical to national identity
4. TVNZ totally lost the plot
5. More from the TV Wars
6. Dominion Post attacks posturing of TVNZ re Sky

and in particular the attempt by TVNZ to secure benefits for itself through special pleading. Sorry, make that six, Adam had lost count.

Now in today’s HoS Bill Ralston turns his attention to this mess. His column begins:-

Never in the field of government inquiries have we heard such self-serving, hypocritical crap reverberate through Parliament. And, for once, it is not coming from politicians.

Over recent weeks, the Ministry of Culture and Heritage’s digital broadcasting review has provoked a vicious internecine war between the country’s main broadcasters and produced a weird reversal of the usual PR spin the big networks like to put out to the media

Not given to mincing words is he! Then as he says, you have to work out who is after who in this war, for war it is.

First, you have to work out who is who in this crazy, three-sided battle. Basically, TVNZ, TVWorks (TV3 and C4), Freeview (TVNZ and TVWorks) are ganging up on Sky (Sky TV and Prime), although TVWorks is not averse to privately putting the dagger into rival TVNZ’s back whenever it possibly can.

Ralston points out how the players are each trying to discredit the other and manipulating facts in wa y that would do the politicians proud.

All sides are crying foul, which has led to a number of ludicrous claims and counterclaims by the spatting networks.

For example, TVNZ claims Sky is unfairly dominant in the New Zealand broadcasting scene. This whinge neatly ignores the fact that TVNZ in its own published strategy document, Inspiring on Every Screen, trumpets that “TVNZ continues to be New Zealand’s leading broadcaster”. Hello?

Then Sky counter attacks with:-

Sky counters by claiming TVNZ is truly the dominant player, with 46.4 per cent share of viewers in February this year and 18 out of the top-20 rating TV shows.

Sky claims, in fact, TVNZ has the highest percentage share of viewers anywhere in the world and it can find no other broadcaster on the planet that comes near. Normally, this would be TVNZ chest-beating but it sounds truly bizarre coming from a rival.

As Ralston says bizarre. Ineed you might expect in consequence that TVNZ would be in rude financial health. But it gets much more interesting for as Ralston notes:-

It also begs the question, if TVNZ has such a large chunk of the market why does it need so many millions of dollars in taxpayer subsidies?

Sky makes the point that TVNZ pulls 65 per cent of the advertising revenue in the market and still gets handouts from the Government.

and as Ralston says later:-

Forget the pathetic attempts at spin all the players are trying to put on the issue. A careful read of the submissions reveals a different and more interesting picture.

From the evidence, it is hard to escape the conclusion that TVNZ should be much more profitable than it is. The fact it can barely scrape a dividend together, and then only after receiving huge Government subsidies, must mean it is grossly inefficient.

Well Adam has read elsewhere that TV3 News operates more efficiently and effectively, that TV3 staffing levels and productivity are more effective than TVNZ.

Another picture that emerges is that TV3 is a slow starter in the digital race and lacks a real vision of where it is going in the new “wired” era.

Sky, for all its revenue, is hugely capital intensive and is not necessarily the goldmine its competitors paint it to be because it has to constantly keep upping its technology to keep ahead in the market – a fact its shareholders seem to have realised, judging by its share price.

Interesting given that both Sky and TV3 are privately owned – and examples of risk taking business not propped up by the taxpayer dollar. Sky risked private capital and continues to so do. Unlike TVNZ.

Ralston then asks why the Government has opened up this can of worms.

Adam suspects that initially it was thought that the Government could score points by attacking Sky through the surrogates of TVNZ and TV3.

However, what is now more likely to happen is that the manifest inefficiency of TVNZ is more likely to be exposed along with it’s like of direction, as indeed was pointed out in earlier editorials in the main newspapers.

Further, taxpayers may well ask why put all this money into Freeview just to attack a successful private business, when greater audience share would have been available by putting TV6 and TV7 on the Sky network. Indeed, given technology advances, it could well be the case that in 5 years or less even, the major part of the audience may well source programmes over the internet, delivered via high speed broadband, thus rendering free to air, satellite and cable as such very out of date.

Overall, if this was a political move it was probably a dumb one, especially as Adam has never noted a shortage of Sky and Freeview antennae in so called poorer neighbourhoods.

Yet again he thinks the regime exposed itself to attack on it’s attitude towards private enterprise.

These incidents cause Adam to wonder if despite the work done on trade by Phil Goff, if some in this government really do believe in an economy driven by successful private enterprise, or is it that they see media control as a pre-requisite for extending political control. On that point Adam will be posting further in the next few days.