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An Answer to NZ’s Broadcasting Industry Dilemma?

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As Minister of Broadcasting Kris Faafoi gets set to decide the New Zealand broadcasting industry’s future with hopefully sound advice that includes a note that the industry is more than just News and Current Affairs, I postulate further on possible answers to our dilemma to stimulate further debate and discussion.

Countries with strong public broadcasters are those with compulsory broadcast licence fees. In Denmark, with a population of just over five million, the licence fee of €332 (NZ$579) generates €4.4 billion (NZ$7,671,308,423). Danish public broadcaster DR operates six TV channels and eight radio channels with this revenue. Norway, which has a similar population to Denmark, has a licence fee of €315. Its public broadaster NRK runs three national TV channels and three national radio channels. Countries that still have licence fees include the U.K., Germany, France, Spain, Ireland, Switzerland, Japan, Italy, the Netherlands and South Korea.

A licence fee in New Zealand of just NZ$125 applied to the estimated 1,765,100 households in the country would generate nearly $220 million dollars annually. This would cover the costs to fund Radio NZ ($35 million) and Māori Television ($45 million), administer the licence fee (est. $20 million) and leave $120 million.

If the $120 million were combined with Radio NZ’s $35 mil., a newly created public broadcaster would have $155 million of muscle. This entity could deliver quality News and Current Affairs (est. $50 mil.) and would have $105 million—almost the same level of funding NZ On Air has after the ring-fenced Radio NZ funding is deducted—to create a Public Broadcaster Fund to make great factual and scripted programming for both domestic use and international sales. To help secure the independent production sector’s future, this broadcaster could be required to outsource for factual and scripted ideas and their production. Sales revenue could go back to the broadcaster and the independents to contribute towards their sustainability.

In an added approach, the Government could continue to fund NZ On Air the annual $115 million it now receives. This NZ On Air Fund could be contestable and exclusively for the commercial channels and platforms, both Free-to-Air and those with paywalls. Once again, independent producers could pitch on this contestable fund with a percentage, say 75%, being ring-fenced for the independent sector.

The commercial channels and platforms could be required to pay a commercially appropriate licence fee for this content that acknowledges the real value that local NZ content would bring to them. After all, they are commercial with the Free-to-Airs able to scoop up any advertising revenue going, while the SVODs would get the subscription revenues. Funding levels would be determined by the quality of the idea, the scale of the proposed production and the audience size.

A means to extract revenues from streamers and international serviced productions coming here would need to be found to decrease and hopefully eventually eliminate Government funding in the NZ On Air Fund.

The Public Broadcaster Fund and the NZ On Air Fund should allow for access to the New Zealand Screen Production Grant (NZSPG) so that producers can more easily pitch and finance shows that have truly global potential. The NZ On Air Fund should retain the current NZSPG requirements of 25% or more of non-NZ production funding and a minimum of 10% market money to ensure the shows have real international appeal. And while we are at it, the NZSPG’s Qualifying New Zealand Production Expenditure (QNZPE) minimum should be reduced from $2.5 million to $500k so that films with lower budgets can access NZSPG. Some thought may well have to be given to the QNZPE for TV as well.

The above could potentially solve a number of issues:

  1. Give us a well funded public broadcaster.
  2. Ensure that the independent production community would still exist and be able to make the most of opportunities both domestically and internationally.
  3. Allow the commercial broadcasters and platforms to live to fight another day with all the advertising revenue available while giving them valuable local content.
  4. Make the streamers and international productions contribute to the growth of local IP and production.

All that’s needed for this to occur would be for the NZ public to buy into the need to pay a licence fee.

I would.

Would you and everyone else?

Tui Ruwhiu
Executive Director

Screen Turmoil Across Tassie Causes Concern

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The Australian Broadcasting Corporation was thrown into turmoil last week when Managing Director Michelle Guthrie was fired. Chairman at the time, Justin Milne, a political appointee and personal friend of Prime Minister Malcolm Turnbull, questioned her leadership style and her relationships with Canberra.

Milne was then ‘forced’ to resign when it became clear that he had allegedly asked Guthrie to get rid of two ABC reporters who had written negatively about the Conservative Government.

While Guthrie won few friends inside the ABC for being a distant and absent MD, it seems she was doing a good job protecting her employees from the political pressure exerted on her.

The ABC has long been under pressure, with global media disruption, funding cuts, complaints of bias from government and attacks from the commercial media sector. With five years of government with the Conservatives at the helm, it is perhaps the accusation of left-wing leanings that has most brought the ABC to its current position.

In his opinion piece in the Sydney Morning Herald, Vincent O’Donnell, honorary associate at the School of Media and Communication at RMIT University, found some fault with the ABC, but stressed that its role as a public broadcaster with bias is not a vice but a virtue.The ABC, especially ABC radio, devotes airtime to issues that are largely ignored by other media: religion, feminism, Indigenous issues, Muslim and other minorities’ interests. In doing so it paints a picture of an Australia that is at odds with some people’s beliefs about Australia, for whom Australia is white, European, Christian and male.”

There’s an abject lesson for us in NZ from all this.

As reported in an NZ Herald story back in 2003, former magazine and Radio Liberty journalist and ACT MP Deborah Coddington accused our leading public broadcaster Radio NZ of bias in her Saving Public Radio report.

In his 2015 piece, RNZ Mediawatch presenter Colin Peacock took a look at bias in the NZ media without coming up with a conclusion, although he does cite the survey of NZ journalists that found 62 percent of them lean to the left.

With the change of government to Labour in 2017 came a focus on strengthening public broadcasting. This brought forth criticism from the commercial media sector when Fairifax CEO Sinead Butcher questioned Labour’s “… approach of piling more money into state-owned media, and their plans to turn Radio NZ into a super-media platform and broadcaster.”

In an unusual about face from the commercial sector, Mediaworks boss Michael Anderson supported public broadcasting with a call for TVNZ1 to become a public broadcaster. He was transparent with his reasoning here, being to allow Mediaworks access to the advertising revenue TVNZ takes from the declining piece of the free-to-air advertising pie.

These currently timid pokes by the NZ commercial media sector at public broadcasting pale in comparison to the Murdoch empire’s all out war against the ABC in Australia and the BBC in the UK, outlined in an opinion piece by Martin Flannagan in the Sydney Morning Herald in 2014. This railing against the ABC by Murdoch’s Newscorp continues unabated, with calls for its and SBS’s charters to be reviewed because of unfair competition.

The NZ Labour-led coalition government has a focus on enshrining public broadcasting. Former Broadcasting Minister Clare Curran said earlier this year in an address to the Public Media Trust that “I am a firm believer in the value of independent public media – both as a means of holding our institutions to account, and for its contribution to our national identity.”

Curran obviously didn’t read her own memo about political interference when it became obvious that Radio NZ’s CEO Paul Thompson and Chair Richard Griffen disagreed with her plans to turn RNZ into a TV broadcaster. She stumbled over her ‘clandestine’ meeting with RNZ’s Carol Hirschfeld, and then fell on her own sword after her discovered get-together with Derek Handley over the Chief Technology Officer job.

If the ructions across the Tassie are anything to go by, we can expect that political and commercial pressure on public broadcasting in New Zealand won’t let up, no matter who’s in power. There’s a lot at stake and we can thank the Aussies for giving us a heads up on what’s coming.

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

Movin’ and Shakin’

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The New Zealand International Film Festival is upon us again. And there’s an even bigger selection of New Zealand films on offer, both feature-length and short, than I’ve encountered before—18 offerings, four of which are made up of programmes of short films. This is a fantastic selection—a high number from DEGNZ member directors and editors.

As Bill Gosden, the festival director pointed out in his speech celebrating the 50th birthday of the festival, it couldn’t have existed without the passion of film lovers who have nurtured it to the point where it has become what NZIFF is today—a truly great International film festival, showcasing the best of New Zealand and international film.

As always I encourage you to get along and watch films to encourage independent filmmaking everywhere.

In other news, Clare Curran is certainly the minister who keeps on giving, unfortunately not so much in the funding realm. The latest in the Radio NZ saga is a measly $4.5 million dollars to RNZ from the $15 million in the May Budget allocation for public media. NZ On Air gets just $4 million, while a new Innovation Fund to be jointly managed by Radio NZ and NZ On Air gets the lion’s share at $6 million.

It must be disturbing for Curran to hear from chair Michael Stiassny of the Ministerial Advisory Group she appointed that not even they support a fully funded RNZ+ television station. What you get—or not—for the price of a cup of coffee.

In a related development, Head of NZ On Air Jane Wrightson responded to an article in Newsroom by Dr Bryce Edwards of Victoria Univeristy, who singled out our current dual funding model of contestable and fully-funded public broadcasting for criticism. In her reply on the same platform Wrightson said that “In the 21st century media landscape it’s highly unlikely that one media provider model will fit all, and so a combination of ring-fenced and contestable funding is a clever response by a small country where media cost structures are always under pressure.”

There are supporters and detractors of the dual funding model approach. Whatever your opinion on the matter, I think we all need to acknowledge the incredible work NZ On Air has done in seeking to adapt to the rapidly changing screen industry while being incredibly underfunded.

Thankfully, we now see broadcasters slowly being willing to take risks with the arrival on air of Taika’s and Jemaine’s Wellington Paranormal, and two new dramas commissioned and screening at a later date: The Bad Seed out of South Pacific Pictures, and Fresh Eggs from Warners NZ. And we are starting to see more locally driven international efforts bear fruit with Screentime’s copro Scandi – NZ noir Straight Forward now in post and destined for TVNZ.

And talk about change, there sure as hell seems to be a lot going on at the Film Commission—a new pou whakahaere in the wonderful and talented Karen Te O Kahurangi Waaka-Tibble, new job opportunities with the departures of Development Executive Karin Williams and Investment Executive Chris Moll, and obviously a change of approach that always comes with a new CEO, this time with the arrival of Annabelle Sheehan who has been with us seven months now. Watch this space for more to come.

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