New battle-lines are being drawn between New Zealand’s major free-to-air television networks and NZ On Air as the major networks seek more State support for “commercially attractive” local programmes.

A fresh release of documents obtained under the Official Information Act highlight the tension between the public service obligations of funding agency NZ On Air and the commercial imperatives now driving our two major television networks.

TVNZ triggered the conflict with its first post-charter statement of intent in July last year. It warned that “potential misalignment between the programming objectives of NZOA with the commercial objectives of TVNZ … could result in the inability of TVNZ to attract NZOA funding for commercially attractive local programming.”

 

To mitigate the risk, TVNZ intended to “engage NZOA to align objectives, agree aims for commercially attractive local programming and address potential revisions to funding criteria.”

 

On 8 September, NZ On Air Chief Executive Jane Wrightson and Chairman Neil Walters were scheduled to have a quarterly review meeting with Broadcasting Minister Jonathan Coleman.

In a pre-meeting brief, officials warned Coleman that Wrightson had already raised concerns about TVNZ’s intentions with the Ministry.

 

“NZ On Air has a requirement for a willing broadcaster prepared to screen a programme to be on board before it will commit funding and may find itself under increasing pressure to fund prime time, commercially-driven programmes outside its current criteria or risk having no outlet for its funding,” says the Ministry brief.

 

A post-meeting Ministry e-mail confirms that the “potential misalignment” between the objectives of NZ On Air’s and TVNZ was discussed, but the Crown funding commission seems to have been more sanguine on the matter than the Ministry.

The email says NZOA chairman Neil Waters “observed that so long as there was competition among service providers for NZ On Air funding there would be no real issue. But a problem would arise if Mediaworks were ever to fold”.

Mediaworks has not folded, but its new owner – Ironbridge Capital - is also under increasing pressure to make its channels more “commercially attractive”.

A group of tough Texans has been paying discount prices to buy chunks of the big debt that Ironbridge racked up buying TVNZ’s main commercial rival. They will be pressing for the improved financial performance that Ironbridge’s original lenders despaired of seeing.

The days when NZ On Air could turn to Mediaworks as its soft option service provider whenever TVNZ starts playing hardball are numbered.

Other documents in the latest release show that Mediaworks is an industry leader in the effort to get the current bans on Sunday morning and public holiday advertising lifted. Ad-free Sunday mornings, have been a safe haven for the most commercially-vulnerable NZ On Air-funded “public service” content – like serious current affairs, and special interest programmes for children, Maori, ethnic minorities, church-goers, and people with disabilities.

At two meetings in 2010, Mediaworks lobbied Minister Coleman to review the advertising bans on Sundays and public holidays.

Coleman’s brief before the first meeting on 30 March says “the Ministry is currently looking at options for amending the legislation, including the feasibility and regulatory implications of delegating the ability to vary the regime to the Advertising Standards Authority. This project is part of the planned work to amend the Broadcasting Act 1989, which will be progressed this year. Meantime, it is suggested that you indicate to Mediaworks that the review is proceeding and that you will be looking at options.”

Following the meeting, a Ministry email notes: “There was a brief discussion of Sunday advertising, with Minister confirming it was on the agenda, but had not been top of the list.”

On 30 July 2010, Mediaworks representatives were back on Coleman’s doorstep. This time, his Ministry had armed him with the results of a UMR Research survey it had commissioned on public attitudes towards a reduction in the advertising restrictions. 55% of respondents strongly supported the ad-free status quo on Sunday mornings; 66% supported the ban for ANZAC day mornings and Easter Sunday; 67% want it kept for Good Friday; and 77% strongly support the ad ban on Christmas Day.

The Ministry had also obtained advice from the Television Broadcasters’ Council on the value of additional revenue broadcasters could obtain from the removal of advertising restrictions on Sundays and public holidays. The numbers produced were deleted from all the documents that were released to me. There is no record of the discussion that took place between Mediaworks and the Minister.

Three months later, on 28 October, the Ministry presented Minister Coleman with its recommendations on Sunday and public holiday advertising restrictions.

“In my view, there is no strong policy rationale for the retention of any of the current advertising restrictions,” says Roger Perkins, the Ministry’s principal advisor. “Nevertheless, the public clearly has an attachment to some advertising-free periods, especially on public holidays. The removal of current restrictions is therefore unlikely to be without some controversy.

“It should be noted that currently broadcasters are struggling to find advertising for the slots they already have to sell because of the slow economic conditions… On balance, we recommend the status quo be maintained, at least for the foreseeable future.”

The Ministry review also noted advice it had received from the Television Broadcasters’ Council that “in the current economic climate its members would not be able to sell advertising slots on Sunday mornings”.

This month, the Television Broadcasters’ Council is trumpeting a 1.9% increase in advertising revenue in 2011.

NZ On Air should start preparing for another assault on its Sunday morning safe haven for fragile “public service” content, and for a more intense joint effort by TVNZ and Mediaworks to alter its funding criteria to give more support for “commercially attractive” local content.

Those “inherent tensions” between commercial imperatives and public service obligations are going to grow.