Its CEO resigned after a year in charge. Most of its board will soon follow. Duncan Greive assesses TVNZ as Willie Jackson stares down a generational opportunity for change.
There are growing fears within the upper ranks of TVNZ that a stealth revolution is coming to the organisation – one which will lead to markedly different and less popular programming, risking mass loss of revenue and audience as a result.
The Spinoff has spoken to half a dozen senior figures across executive and governance ranks, all on condition of anonymity due to sensitivity of the situation. They collectively expressed a feeling that, in blaming TVNZ for the failure of the proposed merger with RNZ, broadcasting minister Willie Jackson is determined to bend the public broadcaster to his vision. “It’s tense,” says one TVNZ staffer. “There’s not great awareness [from Jackson] of everything we do”, says another. “He wants to change the mandate without changing legislation,” said a former staffer familiar with the situation.
The backdrop is of an organisation with a once-in-a-generation power vacuum at the top, which Jackson has a rare opportunity to fill with those who are more aligned with his vision for TVNZ. The organisation abruptly lost its CEO in March, when former National minister Simon Power resigned after just a year in the role. The board is meant to appoint a replacement – but all its seven members are up for renewal, and a majority are likely to follow chair Andy Coupe in leaving. As a result, the search for a new CEO has not even begun.
Sources suggest that the current board makeup, which covers disciplines like legal, accounting, marketing and technology, is likely to be replaced by one which is more “ideological”, steeped in public broadcasting principles, with a far more limited emphasis on commercial outcomes. While there are proponents of this change like Better Public Media’s chair Myles Thomas, who says a commercial focus has distorted TVNZ, it would be a sea change from its recent approach. Thus the identity of the incoming board, and particularly the chair, has been the subject of considerable rumour and speculation.
The minister has done nothing to discourage this with recent public statements. He has been openly critical of TVNZ’s content, and in an April interview with the Herald’s media columnist Shayne Currie, Jackson made it clear that the organisation remains squarely within his sights. “I want to have a chat with them about where they’re going,” he said. “I want to see change.” He made reference to “young people growing up across different cultures… We’ve got a lot more ethnic people. Is that being reflected on TV and radio? Well, in my view probably not enough.” (The minister declined to be interviewed for this story, citing the pressures of budget week, but supplied answers to written questions.)
As if all that was not enough instability, linear TV audiences – directly correlated with revenue – are well down in 2023. Covid and lockdowns meant a temporary reprieve from that decade-long trend, but this year’s numbers have wiped out all the gains of the pandemic era. Even without diminished audiences, the company is hugely exposed to a troubled advertising market, which saw TV ad revenue slump more than 15% in March versus the year prior.
Even so, TVNZ remains the single most powerful brand in all of New Zealand’s media. It was born out of the NZBC during an era where media was highly regulated and the government had a monopoly in television. The legacy of that is an institution of unmatched audience scale and presentation, that has extended that power into multiple channels and now digital domains. TVNZ+ is comfortably the most powerful local streamer, its 6pm news routinely attracts over 600,000 viewers, and the most recent Nielsen figures had TVNZ1 with all the top 10 shows, and 18 of the top 20. As linear audiences decay, TVNZ remains the first stop for anyone with a new show to pitch, and where advertisers go if they want to reach people fast.
Yet this media colossus suddenly appears leaderless and vulnerable – a situation that is causing extreme disquiet within many sectors of the industry. Steve Tindall, chief investment officer at ad agency Group M, describes Jackson as having put “a bomb into TVNZ”. A TVNZ source says that if Jackson succeeds it will devastate TVNZ’s revenue, “and the hole will be filled by the taxpayer”. Production industry veteran John Barnett went further still, telling ShowNews recently that Jackson’s moves “could potentially lead to the downfall of public broadcasting”.
How did we get here?
A year ago the situation was very different. The government had announced a hefty $327m funding package to merge TVNZ with RNZ and grow their digital audiences. The broadcasting minister was still Kris Faafoi, but he was at the end of his rope as a politician. He resigned in June, and Jackson was appointed his replacement.
The stylistic contrast could not have been more acute. Faafoi was subdued and passive, content to let TVNZ and RNZ drive the conversation around the merger. Later, that role was taken by former NZ First MP Tracey Martin, who chaired the establishment board of ANZPM, as the merged brands were to be known.
Then Jackson arrived. Unlike Faafoi, who seemed to find the role a heavy burden, Jackson relished it. Media is where he spent the majority of his career, and as a former talkback host, opinions have always come easily to him. For a few months the combination of an energised minister and a vast increase in funding created a honeymoon effect around the merger.
That all changed in a few strange days in September when submissions to a select committee revealed huge concerns about the merger within the private sector, many of which were mirrored at TVNZ. Jackson seemed blindsided by all that – this was the latest in a string of post-Covid measures intended to support the sector, from the Public Interest Journalism Fund on down. In many ways, they seemed to have the opposite effect of that which was intended, with the government coming under persistent criticism over its media programme. Jackson seemed particularly irked by TVNZ’s position, telling a select committee “we need them to change their attitude”. This came to a head with an extraordinary appearance on TVNZ’s political current affairs show Q+A.
Ostensibly there to announce tech bargaining legislation, the interview descended into a rancorous “trainwreck” in which Jackson accused host Jack Tame of deliberately undermining the merger. Jackson ultimately apologised for the way the interview was conducted later in the week. The following month, Hipkins was made PM, and the focus was now on bread and butter. Not long after, the merger was officially toast.
If not a merger, then what?
If money is a way of keeping score, it was immediately obvious how Jackson apportioned blame for the merger’s collapse. RNZ was clearly the favoured child, receiving a permanent $25m annual funding increase, equivalent to more than 50% of its budget – a vast sum in an era when most other media are managing revenue decline. NZ on Air received a smaller increase of $10m, and no guarantee that it would extend beyond this year.
TVNZ, which might have reasonably expected to take the lion’s share of the failed merger’s $327m windfall, received nothing. Or at least, no extra funding. It did receive a lot of feedback from its minister. In a recent interview with RNZ’s Mediawatch, Jackson openly contemplated returning to a charter. TVNZ’s last charter was introduced in 2002 under the Labour government before being scrapped by National in 2011. It was intended to ensure that TVNZ had a set of public media goals, full of eye-of-the-beholder blandishments like a requirement to “provide shared experiences that contribute to a sense of citizenship and national identity”. Reading it today, it’s only the commitment to arts programming that TVNZ could not plausibly claim to be fulfilling.
Jackson has made multiple allusions to a charter, and told The Spinoff in a statement that he is “exploring a number of options to ensure TVNZ plays a strong public broadcasting role, complementing its commercial activities with a collaborative approach to achieving public media outcomes”. While he said there was no work currently in progress on a fresh charter, he said he had “directed officials to begin reviewing the Broadcasting Act 1989, which may have flow-on changes to the TVNZ Act”.
However it is achieved, Jackson has made it clear that he wants to see substantive change in TVNZ’s content mix, something that privately infuriates some at TVNZ who believe it currently does what he asks, if he’d only care to look. Still, he remains resolute. “Obviously there’s going to have to be a commercial strategy in terms of TVNZ,” he told Mediawatch, “but it’s about getting the balance and reminding them they are an essential part of New Zealand as a public media entity.” He went on to reference Māori, Pasifika, Asian, disabled and youth audiences.
What can Jackson do, really?
In ordinary times the broadcasting minister alone has a relatively limited ability to impact TVNZ. Much of that is by design – TVNZ has a major news-gathering operation which covers politics every day, and the Television New Zealand Act 2003 enshrines editorial independence. The act also says the minister should not give certain directions to TVNZ. This has some in and around TVNZ concerned that Jackson’s opining on programming and representation might be in contravention of the act, but Otago University law professor Andrew Geddis says that the language only prohibits “formal, binding directions”, while allowing him to express ideas around the shows he’d like to see.
Yet the resignation of Power coinciding with the end of a number of board members’ tenure has created a large void atop the state’s most impactful media property. Sources familiar with the situation at board and senior executive level expressed a near-identical concern that if Jackson were to follow through on his stated intentions there is potential for a profound and irreversible commercial impact on TVNZ.
One senior source privy to discussions between TVNZ’s board and the minister says Jackson has made it clear privately that commercial considerations will be of significantly lower priority to the incoming board. On one level this is all in the game. The minister is entitled to appoint board members, who must in turn appoint a CEO and oversee the company within the confines of the 2003 TVNZ Act. Jackson has the right to an opinion on his portfolio, and to shape a board that is more likely to implement his vision than the more unambiguously commercial organisation which operated for most of the John Key era.
Still, it would represent a change of philosophy for TVNZ. Cate Slater, TVNZ’s former head of content, recently caused a mini-storm with a comment at the Spada industry conference that “all local content is public media”. This occurred in the aftermath of controversy around TVNZ’s airing of a local version of F Boy Island, a reality show in which women try to figure out who among their suitors are genuine and who are just there to get money. To Myles Thomas, chair of the Better Public Media advocacy group, Slater’s statement is dead wrong, and F Boy Island epitomises why. “Commercial media is about the advertiser, whereas public media is about the audience,” he says.
TVNZ insiders say this misunderstands why the organisation buys big, broad shows like The Chase or My Kitchen Rules. Imported content is a much cheaper way to win big audiences than local productions, and effectively subsidises the large budget TVNZ does deploy locally. Public media enthusiasts like Thomas retort that it’s worth risking some audience decline if you replace a show like F Boy Island with one like Q+A, because they believe the outcome for audiences is superior. Thomas says that some shrinkage in scale of TVNZ is even desirable. “Jackson’s ideas would inevitably create lower audiences and less revenue, and I think that’s a really good thing.”
What even is public media?
In many ways this comes down to the most basic differences of political worldview between left and right leaning governments, expressed in a media context. Left-leaning politicians tend to have a more centralised and prescriptive view of the form and function of public media, emphasising shows like scripted comedy and drama or documentaries, along with prizing local content that helps give a greater sense of national identity. Right-leaning politicians mostly have more of a market-oriented approach, believing what rates is what viewers like and therefore what should be shown. If that’s imported reality TV and cop shows, so be it. The latter view closely aligns with the view of advertisers, who simply want the largest possible audience to sell to.
In normal times, this might simply be the ebb and flow of different governments. Yet sources suggest that TVNZ is currently so delicately poised that making major changes to the content mix risks a catastrophic loss of linear audiences at a time when advertising revenues are already very challenged, and audiences are shrinking faster than ever before. They also point to what they see as an irony in Jackson’s desire to see shows for younger and more diverse audiences in primetime. Linear television audiences are overwhelmingly older and more Pākehā than the population as a whole, and the audiences Jackson seeks are much more likely to want to watch content delivered digitally.
Jackson, for his part, seems to believe that these underserved audiences still deserve to be represented in linear primetime schedules – and that they might return to watching linear television if they were represented there. It’s a chicken-or-egg question – but one with incredibly high stakes. Because TVNZ is both a beloved and widely known cultural institution and a commercial entity operating in a highly competitive sector. Its income is directly connected to the scale of audience it’s able to attract, and while its profitability has ebbed and flowed in recent years, it made just $8m in profit on around $300m in turnover last year, and is no longer paying a dividend to the government. This means it is essentially planning to be a breakeven proposition over the longer term.
According to a source familiar with its revenues, any change to make the content mix on TVNZ less commercial could have an immediate impact on its profitability. For TVNZ, linear advertising is still five times larger than digital advertising (this is not broken out in its annual report), the source says, therefore substituting popular programming for more niche content in primetime could be financially disastrous. The source says TVNZ commands a premium beyond its natural market share due to the scale of its primetime audience. No other local platform can reach as many people simultaneously as live linear television.
As much as $160m of its roughly $300m in advertising revenue is tied to that unique scale. But the source says “you could halve that revenue” – ie, lose $80m in annual income – if TVNZ was to move away from the broad, popular content it currently plays in primetime. The results would be devastating for the company, they say, as once lost, linear audience is unlikely to return. As for the revenue, they believe it would not end up with other local media. Instead “the money will end up going to Google and Meta”. Jackson and Thomas would dispute the scale of audience decline and how it would impact TVNZ, but the fear from those around TVNZ is very genuine.
What will this mean for TVNZ?
TVNZ is poised at a precarious moment. It has heavily invested in digital, both in platforms like TVNZ+ and an extensive array of content to pull in audiences. The Spinoff’s Chris Schulz rated it the second best streaming service in the country – ahead of global giants like Netflix and Disney+. That rich library of movies and shows has largely been rented from overseas partners, and while it has succeeded in creating a large-scale local audience, it has by no means proved it can make that audience financially viable enough to succeed on its own terms.
If Jackson creates a new TVNZ board and it pivots away from glossy international hits like Love Island – which it just bought back after some seasons on Neon – in favour of more local programming, there is a chance that it has a double financial impact. Local shows are more costly to make, meaning TVNZ cannot buy as many imports. Outliers like Country Calendar, the 6pm news and Seven Sharp aside, local shows tend to attract smaller audiences, meaning lower ad revenue.
Yet because many of TVNZ’s content costs are fixed over two or three years, a loss of primetime audiences could flip the company into substantial losses. From that point, it would have to either reduce investment, cut content costs, lay off staff or seek government support. While it has a significant amount of money on hand, with around $100m in cash and short-term investments, it could burn through that very quickly were its primetime audience to significantly decline.
While former CEO Simon Power has made no public statement to this effect, sources suggest it was Jackson’s vision for a less commercial TVNZ which ultimately drove him to resign. General counsel Brent McAnulty has been named interim boss, and is very well-regarded internally. But the incoming board will have considerable potential to impact the organisation, with its first act being to appoint a new CEO. Should they pick someone whose background is more informed by public broadcasting over commercial outcomes, there are fears among senior TVNZ figures that the organisation could irrevocably transform in a very short space of time.
This has happened before. A former TVNZ exec says the last charter saw audience and revenue declines of around 10%. But that was imposed before the iPhone, before social media, before ultrafast broadband and before streaming created a plethora of great alternatives. In linear, TVNZ remains the most powerful brand around, commanding around two thirds of all TV ad revenues. In digital environments, this is far from the case – the last NZ on Air survey in 2021 had TVNZ+ with a 17% daily reach, well below the likes of Netflix and YouTube.
That still makes it the most powerful local streaming brand. But it also reveals the extent to which linear television has been subsidising the construction of its digital platform. There are legitimate fears in and around TVNZ that the decision to move the company in a less commercial direction could create linear audience loss that would provoke a disaster. For all that, Jackson seems utterly committed to ensuring that the state’s biggest platforms are deployed to tell a different type of New Zealand story, and willing to stare down those who imply it will break TVNZ. All of which explains why a few vacant board seats on a relatively small crown company have sent tremors through whole industries.
Correction: An earlier version of this story suggested some contestants on F Boy Island were there to fuck. They were actually there for money. The Spinoff regrets this error.