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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

Where to From Here?

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The Screen Sector Strategy has announced the dates of its intended hui in 3 locales to gather industry input into a strategy document for the New Zealand Screen Industry. This will be taken to Government in the first half of 2020.

This is an important opportunity for every individual to give their ten cents worth on how they would like to see the direction of the screen industry go.

The DEGNZ board has put together a list of questions for members to help stimulate your ideas. You can find the Guild questionnaire available here to download. Please do send your responses back to us at admin@degnz.co.nz with ‘Questionnaire’ in the subject line.

Below are some recent developments that could contribute to your thinking.

The Spinoff reported in an article on Saturday that for the foreseeable future, TVNZ will not report a dividend to government—essentially, TVNZ’s profitability is way down and is likely to remain so. The impact of Google and Facebook on onscreen advertising revenues is a major factor in this, as well as the advent of Subscription Video on Demand (SVOD) services such as Netflix and the fragmentation of the media market.

In the same article, The Spinoff reported an unprecedented call-out by NZ On Air to all the major news providers to attend a meeting to discuss the long term sustainability of journalism.

Across the ditch in Australia, the Australian Competition and Consumer Commission’s Final Report into Digital Platforms addresses this topic amongst others. Key findings include:

  • The availability of a wide range of high-quality news and journalism provides significant benefits to Australian society and is important for the healthy functioning of democracy.
  • News and journalism risk under-provision for a number of reasons, including the general inability of commercial news media businesses to capture the broader social benefits of journalism.
  • Media businesses, particularly traditional print (now print/online) publishers, have experienced a significant fall in advertising revenue as advertisers follow audiences who have migrated online to access news and other content. This has coincided with strong growth in online advertising, which now accounts for half of all advertising expenditure. Google and Facebook together account for nearly two-thirds of online advertising expenditure.

These aren’t earth-shattering revelations, but clearly highlight the fundamentals of what we all are wrestling with and that are driving TVNZ, Mediaworks, Fairfax, and NZME amongst others to the wall.

The Australians have also called for a levy on streamers to fund local content, the need to maintain broadcast TV quotas, and an end to cuts for screen funding bodies and public broadcasters as previously written about in the Guild blog here.

Funding cuts have impacted heavily on Screen Australia and the Australian Broadcasting Corporation. In New Zealand in comparison, our funding bodies (NZFC, NZ On Air) have had relatively static funding for years, with more and more calls upon it.

As many of you will now be aware, there is international production work to be shot in New Zealand coming out of our ears. We are already seeing a shortage of experienced personnel and crew rates and other production costs are rising while New Zealand budgets stay the same. The question of how local production can survive and thrive in the face of the onslaught of offshore work arriving is vexing a number of us.

We are at a crucial time for both the local and international screen industries. There are seismic shifts still to come as Disney, WarnerMedia, Apple and other streaming services come online and continue to shake broadcast and theatrical to their foundations.

The Screen Sector Strategy work now underway needs to be completed quickly and effectively if we are to have a sustainable industry in New Zealand that benefits from international production and contributes to the development of local screen content and Kiwi screen IP.

Please share your thoughts on where to from here with us at the Guild, at the Screen Sector Strategy hui and with submissions, so that a well thought out strategy is distilled that will work for us all.

Tui Ruwhiu
Executive Director

Carving Out a Public Broadcasting Audience

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New Zealand On Air’s Where Are the Audiences? 2018 Report makes for interesting reading.

If you haven’t already seen it, the key findings for the screen industry are:

  • Weekly audiences for traditional broadcast media are stable, and continue to deliver the biggest audiences.
    – But the gap to online video and SVOD is closing.
  • The weekly reach of SVOD has nearly doubled since 2016 – now reaching more than 6 in 10 people.
  • On a daily basis, linear TV has declined – driven by a fall in Sky TV penetration (Free-to-air actually grew 9%.)
  • Daily more people view videos on sites like YouTube and Facebook than read a newspaper.
  • On Demand viewing is stable but there’s a growing use of this as a content source, as opposed to catch up viewing.
  • New Zealanders still spend the most time each day on traditional broadcast media – 2.5 hrs watching linear TV, 1.5 hrs listening to radio, compared to 62 minutes on SVOD.
  • There’s significant behaviour difference between under 40s and over 45s, but the generation gap is closing as older New Zealanders adopt new tech.

So what does this mean for public broadcasting, particularly as it relates to TVNZ and Radio New Zealand?

As Sky subscriptions fall there has been a positive effect on free-to-air TV, particularly the daily reach of TV One. Conversely, the daily reach of TV2 and TV3 is declining dramatically, while Prime remains steady and Maori TV shows slight growth.

TV One is definitely the strongest TV brand and will, therefore, be the biggest revenue earner in the free-to-air space. Their On Demand offering is working, as attested to by the growth it’s achieving. Two though is languishing and looks to be going the way of Four, which is over and out, as does TV3.

TV One is the dominant free-to-air player as a commercial entity, much to the chagrin of Mediaworks CEO Michael Anderson who is doing his best to convince anyone who will listen that TV One should be turned into a public broadcaster. He knows the writing’s on the wall if he doesn’t get the changes he wants. But should One become the public broadcaster? Or would it be better to be flicked while its star is at least glimmering. There again is the elephant-in-the-room question of what to do about a public screen broadcaster.

Radio NZ is holding its own as a radio station. While Radio NZ’s daily reach is dropping, its audience share remains strong and it’s the single most popular radio station. RNZ is also increasing its online video content offering, which has been strengthened by the extra funding for commissioned programming recently announced.

Does TVNZ’s On Demand success hold the answer? As would be expected, SVOD’s weekly reach is up dramatically according to the report, and TVNZ On Demand is showing growth, not just for Catch Up but also as a content source.

If Radio NZ had a digital On Demand platform that offered a significant content source for ‘free-to-air’ programming and built its eyeball numbers to rival or surpass TVNZ’s On Demand, then we’d be in a place where quality programming could access NZ On Air funding without the commercial imperative that controls what does and doesn’t get made currently.

I’m clearly better on the questions than the answers, but I’m certainly not the only one trying to figure out how to take advantage of the global changes sweeping the TV industry that still haven’t really arrived here.

If you’ve got some bright ideas, let me know.

Tui Ruwhiu
Executive Director

NZFC +

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The New Zealand Film Commission has just announced its Te Rautaki Māori strategy and that’s a great achievement, even though it comes 15 years after New Zealand On Air’s—better late than never.

It’s no secret that Māori films are New Zealand’s most successful both domestically and internationally. Pākēha producers certainly cottoned onto this a long time ago—John Barnett with Whale Rider, Robin Scholes with Once Were Warriors, and more recently Matthew Metcalfe with The Dead Lands.

There are a number of new initiatives to help drive the strategy with an ongoing fund of up to $2.5 million in investment for dramatic feature films made in Te Reo Māori, by Māori filmmakers; a Te Reo development fund; devolved funding supporting internships, mentoring and professional placements for Māori filmmakers; and rangatahi development in the form of wananga, workshops and programmes for young Māori creatives.

Additionally, a one-off $2 million investment for dramatic features in any genre where the director and at least one other key creative is Māori, which some critics might say is there to allow pākēha to keep dipping their toes in the Māori pie.

Criticism aside, Te Rautaki is a significant stake in the ground by the Film Commission that goes along with the changes they propose internally to address representation, protocols and capacity and capability.

Te Rautaki is warmly welcomed by my colleagues at Ngā Aho Whakaari who I’ve been speaking to. And by DEGNZ.

NZFC must also be complimented for continuing to address gender inequity with the announcement of the 125 Fund.

The fund is open to dramatic features in any genre and is offering an investment of $1.25 million each for up to two projects where the director and at least one other key creative is a woman. Critics would also undoubtedly say that this keeps men in the game, too.

With the Budget soon to be announced by the Government, we can only hope that additional funding will be allocated to NZFC as well as to NZ On Air and Radio NZ. Rather than cutting into the essentially static funding the Film Commish has been operating on in the last few years (Screen Production Grant aside), it would be nice to know that these dedicated initiatives are being resourced with new funds rather than taking from existing.

Congratulations New Zealand Film Commission on these efforts! We look forward to the films that will come from them.

Tui Ruwhiu
Executive Director

 

The Big Picture

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There’s a lot of big picture stuff going on at the moment, so I thought I would take the time to discuss it a little further.

DEGNZ together with other guilds, screen industry bodies and representatives, the New Zealand Council of Trade Unions and Business New Zealand have been meeting regularly to formulate recommendations to the Minister of Employment about how we can restore the right of workers in the industry to collectively bargain, without necessarily changing the status of those who wish to continue working as individual contractors. We are making good progress at this point and are expected to finalise recommendations by the end of June at the latest as required by the Minister.

The Guild has been very active in regard to the ongoing Copyright Act Review now underway. We expect the Ministry of Business Innovation and Employment (MBIE) to release an issues paper before the middle of the year in what is going to be a multi-year review process. We are working very hard to get Director’s Copyright onto that issues paper and have the support of the Australian Directors Guild, Directors UK and the Directors Guild of America in our efforts.

President Howard Taylor and board member Annie Collins have been toiling quietly away on the idea of a proposed Code of Ethics, instigated by us, and being discussed by all the guilds and other industry bodies. Some of you will have participated in the survey we put out to the screen industry. We have received very valuable feedback from the survey and are redrafting the proposed code now for a second round of consultation. We expect before the end of the year to be able to introduce and promote the Code of Ethics and hope that the industry and funding bodies take it up as an ethical guideline to all behaviour in the screen sector.

We are keeping a very close watch on developments around RNZ+, meeting key players to try and determine what the potential outcomes might be, and also working to determine the Guild’s position on public media broadcasting and the best way to ramp it up. We would be interested in hearing from members’ views on the following:

  1. If RNZ+ as a platform receives a specific funding increase from Government to deliver better public service media including audio visual content, should it as a platform also be able to seek funding from NZ On Air? Or, should the the funding streams and content be kept entirely separate, i.e. NZ On Air funding used only to create content for commerical broadcasters/platforms?
  2. Should RNZ+ commision audio-visual content from outside suppliers, or create it inhouse?

Could members address any thoughts you might have on this to admin@degnz.co.nz with RNZ+ Thoughts in the subject line. Thanks in advance and hope it’s all going well for you out there.

Tui Ruwhiu
Executive Director