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Is It Time for TVNZ to Revert to Public Broadcasting?

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My op-ed this week is devoted to personal musings in the lead up to the NZ Screen Sector Strategy hui, and the changing nature of the screen industry as we know it.

Colin Peacock on the Radio New Zealand website wrote on the weekend about ‘Convergence’: what it is and what it has led to—telecommunications and broadcasting merging due to digital technology and the Internet.

One outcome of the convergence that’s happened here, which I wrote about last newsletter, was the TVNZ board reporting to Government that it will not be paying a dividend for the foreseeable future.

In the same RNZ convergence article, TVNZ CEO Kevin Kenrick is quoted as saying that TVNZ will refine the data from TVNZ OnDemand users to allow advertisers to tightly target ads to online viewers.

Following last year’s revamp of TVNZ OnDemand, RNZ also reported Kendrick as saying, “Consumers of online video are pretty clear they pay with their wallet, their data or their time. We’re in an ad-funded world.”

With no profits in sight and the Government forgiving TVNZ its requirement as a state-owned company to deliver a dividend, is it time to turn TVNZ back into a public broadcaster and forget about advertising as the main revenue stream?

If convergence is the reality, how about converging ONE, TVNZ 2, DUKE, TVNZ OnDemand and Radio NZ into a new media powerhouse for public broadcasting? Let’s call it Aotearoa Media Powerhouse – Digital (AMP-D) for ease.

The commitment by Kendrick to a significant increase in local content, the mix between local and international shifting markedly towards local, and investment in an online future while making that content available across more devices would make absolute sense for AMP-D. This would parallel the efforts the BBC and the Australian Broadcasting Corporation (ABC) are making to survive.

Granted, TVNZ would be moving from a business that cost close to $300 million to run in 2018—essentially what they earn from advertising—to a public broadcaster that has to find other ways to earn revenue.

How about an AMP-D Studios along the lines of BBC Studios, whose remit is to produce and market programmes not only for the BBC, but for other broadcasters on the open market at home and internationally, returning profits back to the BBC. AMP-D Studios would give the commercially inclined at TVNZ a new playground to play in.

Perhaps the greatest benefit to AMP-D is we’d get away from this navel-gazing that differentiates New Zealand content for local audiences, which is fragmenting away before our eyes. AMP-D Studios and independents could produce programming that is—to steal something else from the BBC—distinctive (in our case NZ), world-class content. Why couldn’t AMP-D Studios generate shows like The Killing, The Bridge and Borgen, produced by Danish public broadcaster DR, which sold all around the world? There’d have to be a cap to how much of the public purse AMP-D studios could get, though.

AMP-D could also generate news and current affairs nationally in a revenue generating service to commercial media companies, much as the NZ Press Association and the worldwide video news service Visnews did previously. This would allow the commercials to put their own spin on the content without the major cost of resourcing.

AMP-D OnDemand could have two operational tiers: Subscriber Video On Demand (SVOD) that’s ad-free and costs a monthly fee, and Ad-Supported Video On Demand (AVOD) that carries advertising in a free-to-air service. Hulu already operates this hybrid system.

In such a new environment, it would make sense for NZ On Air and the NZ Film Commission to ‘converge’. Let’s call this the Aotearoa Media Fund (AMF). AMF could manage the discretionary funding allotted to it to spend between broadcast, digital audio-visual content for the Internet, film and radio.

To really power AMP-D up, AMF could be required to stop funding content on the commercial platforms, dedicate its funding to AMP-D and meet its requirement to deliver great New Zealand content that is valued and enjoyed by many New Zealand audiences on multiple public broadcasting platforms. A cap in funding for internal production for both screen and radio content could be levelled to ensure independent production companies could operate in the new environment.

AMP-D could benefit local feature films by being required to carry all films funded by AMF, guaranteeing free-to air play to New Zealand audiences for every NZ film, which doesn’t happen now. The best films would get significant marketing and promotion. The not-so-good would get buried in AMP-D OnDemand—the same for not-so-great content on Netflix—where they’d sit for those still interested enough to search them out. (Smart Kiwi producers could take a page out of Norwegian producer Anders Tange’s book on how to build an audience independently of a streamer as he did for his Viking comedy Norsemen on Netflix.)

It’s almost certain that there would be an increased cost to establishing and running AMP-D that would take a long time to mitigate if ever, even with the efficiencies of a combined entity. That would be the cost of continued existence.

But perhaps it might be useful to compare New Zealand content and its industry to the kakapo — an endangered species that’s potentially headed towards extinction if we don’t do something paradigm-shifting to save it.

“What about us?”, the commercial platforms here would scream?

Frankly, it’s a fight for survival and we have to ensure first and foremost that our content and our platforms survive and flourish in the brave new world that’s upon us. Sorry, you commercial guys, you’re going to have to sort it for yourselves. Or maybe ‘converge’.  And if they withered and died, maybe it would all be for the better for AMP-D. After all, it would still have to face Netflix, Amazon Prime, Disney +, HBO +, Hulu and others. Heck, AMP-D might even have to team up with the public broadcasters in Australia, Canada, the UK, the U.S. and elsewhere to live to fight another day. Such collaborations are already happening in Europe.

I’m happy for anyone to shoot holes in my postulations above. I’ve only spent a couple of hours daydreaming, not weeks and months devising a strategy. The intent is to get you to do more thinking about our industry with the screen sector strategy upon us. We can now imagine our own futures and let Government know.

We are going to be sending out the list of questions I wrote about in the last blog to everyone on our database. We want your thoughts about the direction the New Zealand’s screen industry should go. So please take the time to ponder, write to and or tell the Screen Sector Strategy NZ and DEGNZ your opinions. We’ll make sure we collate them and submit them from the Guild along with our thinking, so that we all have a say.

Tui Ruwhiu
Executive Director

Are We Missing the Streamer Boat?

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It’s hard not to bang on about streaming services when they are continuing to upend the screen industry as we know it.

Media intelligence service FilmTake recently reported that Disney, WarnerMedia, and Apple are expected to spend between US$8 million to $20 million per episode on new drama series.

Amazon has supposedly set aside over a billion US dollars to bring a five-season Lord of the Rings series to Amazon Prime.

There are other epics planning to cash-in on the void left after the conclusion of Game of Thrones include WarnerMedia’s Dune series, Showtime’s Halo, and Apple’s fantasy series See.

Disney+ is also producing a Star Wars series, Mandalorian, which is costing $15 million per episode.

And these are just the TV blockbusters.

The Financial Times reported that in Europe, Netflix will make 221 projects in 2019, including 153 originals.

Netflix has launched its first European production hub in Madrid, targeting Spanish-language production and drama series, which have been a priority and a large source of success for the U.S. streaming giant.

In July of this year, it also announced that it is creating a dedicated production hub, featuring 14 sound stages, workshops and office space, at Shepperton Studios in the United Kingdom.

In the last year alone, over 25,000 cast, crew and extras have worked on almost 40 Netflix originals and co-productions across Britain.

New Zealand is certainly not missing out on service production for streamers as witnessed most recently by the noise about the Lord of The Rings TV Series potentially being shot here for Amazon. Netflix has already been here with Letter For the King and is currently shooting another.

But are we missing the boat with local IP to satisfy the booming global appetite for content, particularly drama?

Yes, local producers do continue to sell their NZ ON Air and TMP funded content internationally, but that’s been the case for many years now.

NZ formats for the international market have made headway, as most recently attested to by Filthy Productions’ sale of Filthy Rich to the Fox Network.

It’s easy to forget that Rob Tapert has been making TV shows here for the international market for over 25 years—everything from Hercules and Xena to Spartacus and Ash vs Evil Dead.

But there’s nothing new in all this, as it was happening prior to the advent of Subscription Video On Demand (SVOD) services like Netflix and Amazon.

While NZ On Air continues to do the best it can with limited funds for local drama, it’s essentially locked into a myopic approach by its adherence to the Broadcasting Act, and it doesn’t look like it will change that anytime soon.

But there is a little light at the end of the tunnel.

Screentime has forged into Scandi Noir with its Danish coproduction Straight Forward, now on TVNZ OnDemand, and its soon to be released copro The Gulf, with Paula Boock and Donna Malane’s Lippy Pictures and a German partner.

And we have seen one Netflix Original in Auckland-based Razor Films’ Dark Tourist, while See-Saw Films and Jump TV are into their second series of The New Legends of Monkey for the ABC, TVNZ and Netflix. Almost going unnoticed is Pango Production’s 2018 production All Or Nothing: New Zealand All Blacks for Amazon Prime.

But really! Can we survive the onslaught of service production work from streamers in New Zealand and get our own IP out there in more than an occasional way?

There are a number of factors holding us back and one of them is writers. We don’t have enough skilled writers with the experience required to get internationally-focused shows across the line. The NZFC/NZ On Air Raupapa Whakaari Series Drama Lab initiative is seeking to address this by bringing in international-calibre mentors to work on local show ideas with teams here. Hopefully this will bear fruit.

Another is lack of funding. NZ On Air production funding caps out at $6 million, and you can’t access the NZ Screen Production Grant and NZ On Air Funding for the same project. When even middle-of-the-road Aussie shows are being made for the international market at AUD $1.5 to 2 million or more per episode for 6 to 10 eps, you can see the problem. But before you get to production you have to go through development, and the cost for that is going to be anywhere between $300,000 to $500,000. Again, there’s not the funding here for that. Raupapa Whakaari’s matched funding is limited to NZ$50,000 per year.

You might well ask why do we need to create our own IP anyway, and not just be service providers for international productions?

For directors and editors there’s going to be more work on local shows than international ones. The post production is generally not done here for international shows, and there’s only a very small pool of Kiwi directors with the credits to get themselves hired on international productions. That will expand slowly over time, but local shows hire locals, and we are increasing the numbers of Kiwi directors working on NZ On Air dramas.

In the end though, it’s our distinctiveness as Kiwis with Kiwi stories to tell and landscapes to show that provides cut through in the international market. I’m paraphrasing Paula Boock of Lippy Pictures who participated on our Screenlink panel this week along with Mark McNeill of Razor Films and Steven Zanoski of Filthy Productions to discuss ‘Screen Content for the Global Market’. Locally owned IP also brings revenues back to New Zealand when it’s successful, long after production has finished.

I don’t think we are going to miss the boat entirely when it comes to creating our own shows for the streaming giants. But it does sometimes seem like we are standing at the end of the pier watching the ship sailing away and wondering how the hell we are going to get onboard.

Tui Ruwhiu
Executive Director