Apsattv
26-05-2008, 08:03 PM
From http://www.stuff.co.nz/4558256a1865.html
Television New Zealand's bleating for Sky TV to be broken up reflects the inadequacy of TVNZ's own performance and, ironically, makes a compelling case for TVNZ itself to be broken up.
TVNZ's submission to the Culture and Heritage Ministry, which is reviewing broadcasting regulation, contains numerous inaccuracies such as its claims as to the cost of the Sky Sports package. TVNZ is an organisation that has proven itself a failure in a governance, management and financial sense.
It's now running to the skirts of its Wellington matriarch and pleading for intervention. Amongst a host of blunders, it disposed of a strategic stake in Sky in 1999 whilst representing that they had struck an agreement on preferential treatment on content sharing, which it had not.
Importantly, there are no monopolistic elements of Sky TV's service. Aside from Free to Air (FTA) over VHF, there are additional frequencies and technologies (such as Freeview) which demonstrate that there are numerous distribution pathways to the household. Not to mention the imminent prospect of broadband distribution.
As for content, FTA broadcasters have a track record of successfully bidding for premium sports and general entertainment rights including TV3's exclusive coverage of the Rugby World Cup, Aussie V8 Supercars and A1GP. TVNZ itself has exclusive rights for the Beijing Olympics and the 2010 Commonwealth Games.
The major FTA broadcasters have progressively offered lesser value for sports replay rights presumably reflecting their perception of the value of those rights. Sky was re-selling cricket (live) and rugby (replay) FTA rights to Prime, and previously TV3, long before Sky purchased Prime.
There are many examples in Australia of 'anti-siphoning list' sporting events being ignored by FTA broadcasters including the All Blacks v Wallabies games in Melbourne (both 2006 and 2007), which were eschewed by Channel 7 in favour of "The Sound of Music" (dreadful) and "Starsky and Hutch" (much better) respectively.
In 2006, The Australian Government undertook to reform the sports anti-siphoning list in order to address the failings of this policy which included the following: Five of eight weekly NRL matches are not broadcast by FTA networks nor are four of eight weekly AFL matches. Not a single match from the 2006 French Open Tennis Tournament was carried by any FTA broadcaster and only 5 per cent of the Winter Olympics in 2006 made its way to the screens of long-suffering FTA viewers.
Given TVNZ's formerly dominant position and its access to the Government coffers, it is a wonder that Sky TV has managed to succeed at all. Sky TV was launched in 1990 as a three channel service. It was a visionary and high-risk entrepreneurial venture and those investors brave enough to share that vision endured losses for each of the following thirteen years.
Sky TV quietly went about building both its customer base and the breadth of its offering. In the meantime, TVNZ managed to embroil itself in controversy after controversy, lost market share, indulged itself in a culture of largesse and overpayment for news presenters. It required increasing government subsidies particularly following the split from Kordia.
New Zealand rugby is now struggling to retain talent in the face of lucrative Northern Hemisphere player contracts from the likes of teams in the Heineken Cup, which is itself, surprise, surprise, broadcast on pay TV. Broadcast revenue is vital to the health and the success of the game in New Zealand. Would taxpayers be happy to stump up the circa $40 million per annum that Brook estimates Sky pays in annual rugby broadcast rights?
TVNZ has become emboldened by the Government's interventions in telecommunications and airports. Its call for the split of Sky is nothing more than a desperate attempt from a losing organisation to change the rules in a competitive game.
If the Government were to intervene in the television market, it would send a clear message to entrepreneurs that the sort of vision and hard work required to develop a successful business model will be welcomed by the Government by way of expropriation of the value they've created.
We would then finally have to resign ourselves to New Zealand's role as a market gardener to the region and an exporter of entrepreneurial talent to the world. TVNZ's self-interested submission should be treated with the derision it deserves.
*Simon Botherway is executive chairman of Brook Asset Management, which holds Sky TV shares. A Disclosure Statement is available on the Brook website: www.brook.co.nz
Television New Zealand's bleating for Sky TV to be broken up reflects the inadequacy of TVNZ's own performance and, ironically, makes a compelling case for TVNZ itself to be broken up.
TVNZ's submission to the Culture and Heritage Ministry, which is reviewing broadcasting regulation, contains numerous inaccuracies such as its claims as to the cost of the Sky Sports package. TVNZ is an organisation that has proven itself a failure in a governance, management and financial sense.
It's now running to the skirts of its Wellington matriarch and pleading for intervention. Amongst a host of blunders, it disposed of a strategic stake in Sky in 1999 whilst representing that they had struck an agreement on preferential treatment on content sharing, which it had not.
Importantly, there are no monopolistic elements of Sky TV's service. Aside from Free to Air (FTA) over VHF, there are additional frequencies and technologies (such as Freeview) which demonstrate that there are numerous distribution pathways to the household. Not to mention the imminent prospect of broadband distribution.
As for content, FTA broadcasters have a track record of successfully bidding for premium sports and general entertainment rights including TV3's exclusive coverage of the Rugby World Cup, Aussie V8 Supercars and A1GP. TVNZ itself has exclusive rights for the Beijing Olympics and the 2010 Commonwealth Games.
The major FTA broadcasters have progressively offered lesser value for sports replay rights presumably reflecting their perception of the value of those rights. Sky was re-selling cricket (live) and rugby (replay) FTA rights to Prime, and previously TV3, long before Sky purchased Prime.
There are many examples in Australia of 'anti-siphoning list' sporting events being ignored by FTA broadcasters including the All Blacks v Wallabies games in Melbourne (both 2006 and 2007), which were eschewed by Channel 7 in favour of "The Sound of Music" (dreadful) and "Starsky and Hutch" (much better) respectively.
In 2006, The Australian Government undertook to reform the sports anti-siphoning list in order to address the failings of this policy which included the following: Five of eight weekly NRL matches are not broadcast by FTA networks nor are four of eight weekly AFL matches. Not a single match from the 2006 French Open Tennis Tournament was carried by any FTA broadcaster and only 5 per cent of the Winter Olympics in 2006 made its way to the screens of long-suffering FTA viewers.
Given TVNZ's formerly dominant position and its access to the Government coffers, it is a wonder that Sky TV has managed to succeed at all. Sky TV was launched in 1990 as a three channel service. It was a visionary and high-risk entrepreneurial venture and those investors brave enough to share that vision endured losses for each of the following thirteen years.
Sky TV quietly went about building both its customer base and the breadth of its offering. In the meantime, TVNZ managed to embroil itself in controversy after controversy, lost market share, indulged itself in a culture of largesse and overpayment for news presenters. It required increasing government subsidies particularly following the split from Kordia.
New Zealand rugby is now struggling to retain talent in the face of lucrative Northern Hemisphere player contracts from the likes of teams in the Heineken Cup, which is itself, surprise, surprise, broadcast on pay TV. Broadcast revenue is vital to the health and the success of the game in New Zealand. Would taxpayers be happy to stump up the circa $40 million per annum that Brook estimates Sky pays in annual rugby broadcast rights?
TVNZ has become emboldened by the Government's interventions in telecommunications and airports. Its call for the split of Sky is nothing more than a desperate attempt from a losing organisation to change the rules in a competitive game.
If the Government were to intervene in the television market, it would send a clear message to entrepreneurs that the sort of vision and hard work required to develop a successful business model will be welcomed by the Government by way of expropriation of the value they've created.
We would then finally have to resign ourselves to New Zealand's role as a market gardener to the region and an exporter of entrepreneurial talent to the world. TVNZ's self-interested submission should be treated with the derision it deserves.
*Simon Botherway is executive chairman of Brook Asset Management, which holds Sky TV shares. A Disclosure Statement is available on the Brook website: www.brook.co.nz