Merging commercial TVNZ and non-commercial RNZ won't be easy – and time is running out

The announcement of the government’s decision to merge RNZ and TVNZ into a non-profit “public media entity” was long anticipated but, coming in the second year of Labour’s second term, underwhelming in its lack of detail.

Cabinet had discussed the proposal back in 2019, and yesterday’s announcement was expected to be the culmination of extensive planning, consulting, expert committees and corporate accounting reports.

The protracted process was intended to give shape to the broadcasting minister’s vision of a multi-platform public service provider capable of fulfilling its cultural and civil remit into the 21st century.

And while it’s significant that the government recognises the importance of strong public media across all platforms in New Zealand, and is committed to its strategic vision, in many respects the announcement raises more questions than it answers.

Commercial tension

Firstly, how will the organisational and governance structures across radio, television and online services function? Minister Kris Faafoi has indicated that these details will now be delegated to a new “establishment committee”, although the Strong Public Media governance group had delivered a business case to cabinet last year.

Complications arise because TVNZ is a commercial entity, which competes directly with other commercial media for (slowly declining) audiences and advertising revenues, while RNZ is a fully funded public service provider with a charter.

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The minister has affirmed that the current non-commercial radio services will be retained. But aligning the commercial television arm and future online services – for example, the integration of the RNZ and TVNZ news operations – entails potentially contradictory priorities, even under the broad directives of a public charter.

Secondly, what funding arrangements will support the new public media entity? The ratio of public to commercial revenues and the mechanisms for ensuring its adequacy across future changes of government are critical, but have not been specified – although some redacted figures in related cabinet papers suggest these have been estimated.

The minister suggests these will be determined through forthcoming budget deliberations. If this implies that the level of funding depends on annual budget wrangling with other cabinet portfolios, then there is little hope of gaining substantial and sustainable commitment over the demands of health, education, housing and other policy priorities.

Budget uncertainty

Faafoi’s predecessor, Clare Curran, ran into this problem in 2018. Having announced an anticipated investment of NZ$38 million to develop RNZ’s services, the budget delivered only $15 million.

Prior to that, Labour’s attempt to restructure TVNZ with a dual-remit charter was compromised by cabinet disagreements. The Ministry for Culture and Heritage allocated $95 million of public funding only for Treasury to extract $142 million in dividends.

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Crucially, balancing public service and commercial expectations requires the organisational structure and funding arrangements to be in sync. But this is unlikely to happen if one is determined by a committee and the other is left to the uncertainties of the budget.

There are successful public service operators, such as RTE in Ireland or CBC in Canada, which have mixed commercial and public funding. In both cases, though, the public ratio is over 50%. It would be wishful thinking to suppose cabinet would provide 50% public funding to align TVNZ’s services with a public charter remit.

That would cost at least $150 million per year – triple the current allocation to RNZ and TVNZ. When reliance on commercial revenue predominates, commissioning and scheduling decisions inevitably reflect the imperative to optimise eyeballs and advertising dollars.

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Time is tight

Even with base-line funding assured for the non-commercial RNZ services, without any mechanism to ensure adequate ratios are maintained, there is a risk that future revenue increases will come to depend increasingly on developing commercial spin-offs online.

This would inevitably affect the new entity’s capacity to use the expansion of its online services to deliver more diverse content to a full range of audiences.

The minister has suggested the new entity will be established by 2023. Given the legislation has yet to be drafted, that time-line is already tight. Any further delays or announcements of bold intentions without concrete substance will risk pushing Labour’s public media plans further toward the 2023 election.

If the new entity has not been established before then, and with Labour slipping in the polls, all bets on the future of public media in Aotearoa New Zealand are off.