Unto God or unto Caesar?

Television after the TVNZ Charter

Peter Thompson, Unitec New Zealand

Abstract One of the more significant media events in 2003 was the final ratification of the

TVNZ Bill, transforming TVNZ from a State–Owned Enterprise into a Crown-Owned

Company with a public service Charter. This sets out a range of social, cultural and

democratic objectives which the Labour-led government acknowledges cannot be

fulfilled by a solely commercial broadcaster. However, TVNZ’s new status as a

CROC does not dispense with its obligation to maintain commercial performance.

This raises a number of normative and theoretical concerns about balancing the

seemingly incompatible imperatives of producing quality Charter programming and

maximising audience size and revenue. It also raises a several related policy questions

about the transparency of funding structures and the criteria by which Charter

performance can be gauged. Taking a critical political-economic perspective and

drawing on relevant archival documentation along with interviews/correspondence

with the Minister for Broadcasting and TVNZ managers, this paper intends to explore

the extent to which TVNZ’s ability to fulfill its new role as a public service

broadcaster is likely to be constrained by contradictory pressures imposed by

government and the commercial broadcasting sector. In doing so, it will highlight

some important practical and ideological tensions assumed within the government’s

current approach to regulating the broadcasting sector in New Zealand.

Keywords

Public service broadcasting; TVNZ Charter; state owned enterprise; crown owned

company; media policy

We have a dual remit. Our job is to deliver the Charter while maintaining our commercial performance. I am confident we can do it and at TVNZ we feel a real sense of mission in tackling the challenge… It’s the challenge of rendering unto God and unto Caesar at the same time. A delicate sense of balance is required, matched by a strong unyielding sense of purpose. -Ian Fraser, CEO of TVNZ (2003a). We may recall the euphoric dreams articulated… when mass TV broadcasting was about to become a reality… But the cultural dream was cruelly mocked in its realization. This magnificent technology, more than Wagnerian in its proportions… What does it deliver to the masses? An occasional gem buried in immense avalanches of the ordure of everything that is most banal and insipid or pathological in our civilization. - Joseph Weizenbaum (1980, quoted in Elliott, 1986, p.105-6)

Introduction and approach

This study is the latest in an on-going research programme examining New Zealand broadcasting policy reforms. The article is intended to both update and extend pre-Charter analyses published in the Communication Journal of New Zealand (Thompson, 2000) and the NZ Political Review (Thompson, 2003). As recent publications confirm (Norris et al., 2003; Ministry for Culture and Heritage, 2003), public broadcasting is both a significant and a contentious issue. It is significant because the manner in which a society’s media system operates shapes the balance of relations between polity, economy and civil society, just as those relations in turn establish the conditions under which the media must operate (see Galtung, 1999). It is contentious, because there is both academic and political disagreement about the how specific modes of economic operation and state intervention can ensure or inhibit the provision of particular versions of public service. Developments such as the emergence of a globalised market for media productions, the deregulatory measures ushered in through various international trade agreements, and the convergence of formerly discrete media forms through digitalisation constitute a shift in the material and ideological conditions under which broadcasters must operate as well as in the context in which policy must be understood and evaluated. Moreover, such changes invite questions about the nature of public service broadcasting and its future.

The analysis of recent developments in the New Zealand is important

not only for understanding the specific national broadcasting context but also to understanding how well such a heavily commercialised media sector might be rebalanced to reflect a revitalized conception of public service. The research involves a systematic survey of archival material dating back to 1999. This includes ministerial policy papers and media releases, annual reports and media releases from broadcasters, and also coverage of the broadcasting sector in the NZ Herald online archive. The data is used as the empirical basis for identifying the objectives and rationales behind various decisions, policies and practices in the

broadcasting sector and inferring the extent to which particular political and economic factors motivate or inhibit particular decisions, policies and courses of action.

The political-economic analysis which follows assumes that

interventions in the sector by various government ministries and commercial pressures imposed by audience and/or advertiser demands shape the agency of broadcasting actors in significant ways. However, such influences are not necessarily deterministic or unilinear. Political and economic “base conditions” may delimit the scope of broadcasting practices, for example, by determining “in the first instance” what is legal or affordable (see Murdock, 1997). Nevertheless, part of the reason for the continual debate about broadcasting principles and policy is the variety of ways in which agents in the broadcasting sector may interpret and engage with policy directives and respond to economic possibilities and pressures. Actors involved in the broadcasting sector behave so as to optimise the realisation of particular goals and/or conform to particular norms/ principles in a manner that is rational relative to their institutional contexts and priorities. This means that any particular set of institutional and policy arrangements may potentially be articulated to a range of practices and outcomes. Institutional structures and policies may determine the broad contours of media operations, but they do not preclude contingencies in interpretation and response. Thus policy discourse which serves to legitimate a particular set of arrangements may not always correspond with the way that policy is understood and internalised by those who are charged with implementing it.

Identifying and critiquing the specific modalities of articulation and any

discrepancies between rhetoric and practice in the broadcasting sector involves a degree of informed speculation in attributing particular behaviours to various motives and contextual constraints. The secondary data sources have therefore been triangulated by soliciting primary data through correspondence and interviews with several sources within government and TVNZ. This has helped to confirm and, in some cases, modify initial analyses, thereby allowing a higher degree of academic confidence in the validity of the conclusions being drawn. Indeed, it is precisely the access to the accounts of institutional agency from key actors within government and the broadcasting institutions which permits valid assertions to be made about the how specific political and economic arrangements shape and constrain that agency.

Background: The structural transformation of the public broadcaster? When the new Labour-led government came into office in 1999, its manifesto

promised to reform broadcasting in a manner scarcely imaginable under the neoliberal agenda of the preceding 15 years. Throughout the 1990s, under the previous National-led administrations, TVNZ had successfully maintained its dominant market share through aggressive commercialism. As an State Owned Enterprise (SOE), the primary concession to social responsibility was the payment of significant dividends to the Treasury (over $200 million between 1989 and 1999). The outgoing National-led government’s final contributions to broadcasting policy included positioning TVNZ for privatization (see Ord Minnett, 1998) and the decision to abolish the unpopular license-fee.

Labour’s broadcasting manifesto explicitly acknowledged the inadequacy of a

purely commercial broadcasting system in performing cultural and democratic functions and addressing the public as citizens, not just consumers (Labour Party, 1999). The new Minister of Broadcasting, Marian Hobbs, emphasised the need for broad sector-wide reform, observing that the problem with New Zealand broadcasting was not the shortcomings of any individual broadcaster but with the underperformance of the broadcasting model as a whole (Hobbs, 2000). Although a significant change in policy trajectory was being heralded, specific initiatives remained vague, and it was only after the machinations of several ministerial committees (Office of the Minister of Broadcasting, 2000)ii that the scope and direction of the new broadcasting policies became transparent.

It soon became apparent that several factors would delimit the scope of policy

options available to the broadcasting portfolio. Firstly, Helen Clark’s interventions in broadcasting policy (via her position as Minister of Arts, Culture & Heritage) ruled out a priori any prospect of exploring the possibility of commercial-free television and (following Treasury advice) cancelled TVNZ’s plans to establish a digital platform (Thompson, 2000). Thus two important policy issues were determined before the government had even received policy advice from its own commissioned reports. Importantly, this effectively committed the government to a model of television combining public service and commercial principles which has come to characterise its “third way” philosophy.

Secondly, officials from the Treasury and CCMAUiii were prominent in the various

committees exploring broadcasting and telecommunications policy options (Frewen, 2000). Ministerial bureaucrats and accountants ensured that fiscal considerations would be accommodated in public service initiatives. Consequently, a range of potentially interesting approaches to broadcasting governance and public service implementation were sidelined without substantive debate. For example, the possibility of introducing levies on commercial advertising to subsidise public service policies was discarded, and other potential options such as the “Channel Four” model iv were ignored (Atkinson, 2000) v.

Thirdly, broadcasting policy was subject to the priorities of other ministerial

portfolios, most notably the Ministry of Economic Development (formerly Commerce) and the Communications portfolio, which are responsible for governing telecommunications and radio spectrum rights. Partly because of media convergences, the Communications portfolio overlapped with that of Broadcasting. While the government had changed, a neoliberal mind-set within the Ministry of Economic Development and the Treasury was still very much intact, as evidenced by a range of documentation and policy statements conflating notions of public good with economic efficiency (Thompson, 2000). Apart from the auctioning-off of spectrum management rights, a particularly significant broadcasting policy development determined by the Ministry of Economic Development/ communications portfolio was the decision not to regulate Sky’s set-top box decoder. Given the shelving of TVNZ’s digital proposal and Sky’s first-mover advantage in the digital pay-TV market, this effectively gave the seal of approval to the latter’s continuing monopoly vi without extracting any binding “common carrier” agreement in return.

Fourthly, it became apparent that policy intervention in the broadcasting system

would be limited to the public sector, while the private sector would remain deregulated. For example, when the idea of local content quotas was being discussed, CanWest approached the Treasury and intimated that it would consider disinvesting in

New Zealand if such a policy became compulsory vii (NZ Herald, 10.11.01). Compulsory quota policies were subsequently dropped when it transpired that they might violate New Zealand’s obligations under the GATS and CER trade agreements viii. Along with the telecommunication sector, the commercial broadcasting sector remained highly liberalised. There was no question of extending the public service Charter obligations being developed for TVNZ to its private sector competitors.

These issues highlight the fact that there are competing ideologies and agendas

within and between different ministries and state institutions. Policy is therefore never formulated in a vacuum and is inevitably subject to structural constraint both from within government and from external political-economic pressures. Broadcasting policy therefore has to be understood in the context of the “third way” philosophy espoused by the “New Labour” government (see Eichbaum et al, 1999; Giddens, 2000) ix. This approach attempts to pursue social democratic policies alongside neoliberal economic policies. However, critics have pointed out that while the rhetoric suggests a synthesis of left and right-wing agendas (Fairclough, 2000), in practice, the Third Way tends to promote the pursuit of social-cultural-democratic goals in whatever policy space remains after market imperatives have been accommodated (Thompson, 2000).

This has an important application to broadcasting. Despite the well-documented

contradictions and tensions between the respective priorities of commercial and public service systems (e.g. Graham & Davies, 1997; Thompson, 2000), Labour has been unwavering in its assertion that commercial principles and public service principles are compatible. This is outlined most clearly in a recent policy discussion paper issued by the Ministry of Culture and Heritage (Ministry of Culture and Heritage, 2003). The paper acknowledges that the respective principles and priorities of commercial broadcasting and public broadcasting differ, but maintains that a synthesis is possible:

“It is important to recognise the differences and areas of tension between the principles underpinning public and private broadcasting, but equally that there are areas of intersection. Both sets of principles have a place in promoting and protecting the core values of civil society… The government recognises that the broadcasting sector as a whole can function most effectively for citizens if there is a balance of public and private principles within a mixed economy.” (2003, section 15).

While space precludes a more in-depth interrogation of the argument outlined here

(see Thompson, 2004 for a more detailed discussion) it clearly raises questions about the nature of “balance” and “mixed economy”, and also about the conception of citizenship/ civil society assumed to be underpinned by private/ commercial principles. This ambivalence pervades the political discourse on Labour’s “third way” philosophy, most notably in regard to the promotion of the “knowledge economy” in which the cultural and educational sectors are conceived as an integral dimension of an increasingly postindustrial market. As Fairclough observes, “A crucial assumption [of the “third way”] is that the measures necessary to strengthen enterprise in the new knowledge-based economy are also the means of achieving greater social justice.” (2000, p.22).

In Labour’s first term, Hobbs had faced a steep learning curve in the broadcasting

portfolio. Her challenges included limited expert policy advice (Comrie & Fountaine, 2003), intense pressure (and criticism) from various lobbying interests, and an obligation to shape broadcasting policy in a manner congruent with other ministerial portfolios. It was in this context that the decisions were taken to retain the commercial

basis of TVNZ’s operation but to change its status as a State Owned Enterprise (SOE) to that of a Crown Owned Company (CROC) with a public service Charter. As Hobbs remarked on the compromise,“You have always been driven by returning a dividend. I’m going to ask you now to meet the commercial demand but at the same time I want you to start saying, ‘All right, this programme does not bring in the viewers that advertisers want but it meets a goal that we have.’ ” (Hobbs, quoted in Thompson, 2000 p. 33).

Labour entered its second term of office in 2002 (partnered by United Future and

Progressive Coalition), having appointed a new broadcasting minister, Steve Maharey, to take over from his embattled predecessor. By this time, New Zealand on Air and Te Mangai Paho were being funded directly from the consolidated fund. Although TVNZ remained an SOE, its board and management line-up had undergone some significant changesx, suggesting a somewhat more favourable predisposition toward Charter implementation. Meanwhile, bills for the TVNZ Charter and the Maori Television Service were in an advanced stage of progression, voluntary local quotas for the radio industry (and later, for television) had been agreed, and Radio 531pi had been selected as the provider for the new Pacific Radio Network (Niu FM). When the TVNZ legislation was finally enacted in February 2003, and TVNZ officially became a Crown-owned company with a Charter from March 2003, Steve Maharey announced that;

“The primary value of broadcasters lies in their contribution to the cultural and social wealth of the nation. With a Charter to guide Television New Zealand I am looking forward to seeing more innovative and high quality programming on air. It will better reflect the expectations of all New Zealanders, rather than solely focusing on programmes which attract the biggest audiences… I look forward to seeing our public television broadcaster flourish as a Crown-owned company, no longer restricted to the pursuit of purely commercial objectives. I look forward to its response to the direction provided by the Charter and to the cultural and social benefits that will result.” (Office of the Minister of Broadcasting, 2003).

The final version of the TVNZ Charter (TVNZ, 2002b) included a range

of public service objectives and expectations. These include directives for TVNZ to:

“Strive always to maintain the highest standards of programme quality and editorial integrity; feature programming across the full range of genres that informs, entertains and educates New Zealand audiences; provide shared experiences that contribute to a sense of citizenship and national identity; provide comprehensive, impartial, authoritative and in-depth coverage and analysis of news and current affairs in New Zealand and throughout the world; include in programming intended for a mass audience material that deals with minority interests; [and] play a leading role in New Zealand television by setting standards of programme quality and encouraging creative risk-taking.”

These specifications are certainly a radical break from the limited clause on social responsibility in section 4 of the SOE Act to which TVNZ was previously subject. Indeed, the specific social objectives in the Charter for TVNZ are actually more detailed than those of the BBC Royal Charter (BBC, 2003). This may reflect the extent to which a public service culture was perceived by policy makers to be as lacking in the former as it is taken for granted in the latter. It would certainly be naïve to expect the Charter to transform TVNZ into the New Zealand version of the BBC. However, the extent to which its new public service remit can be realised depends on several inter-related variables over which TVNZ has differing degrees of control.

These factors will be roughly themed and discussed as follows: First,

the theoretical and normative coherence of TVNZ’s dual remit and the balance between public service and commercial functions; second, the extent to which TVNZ’s internal culture has embraced the new Charter requirements; third, the constraints imposed by the funding mechanisms for the Charter (after Treasury expectations for dividend payments are factored in); fourth, the way in which TVNZ has made changes to its programming and schedule, fifth, the legitimation of the Charter and the ethos of public service among different sections of NZ society, and finally, TVNZ’s position within the wider broadcasting sector and its structural relations with other media and government institutions. The following sections will identify the key issues and tension in relation to the above themes, and then draw some conclusions about the extent of the Charter’s success in changing the complexion of New Zealand television.

A discourse on method and policy As Born (2003) contends (drawing on the actor-network theory notion of

“performativity”), the way in which particular conceptions of broadcasting are discursively framed within broadcasting institutions influences how agents internalise and manifest them in practice. A given set of policy and institutional arrangements may circumscribe certain possible responses but still permit more than one mode of articulation between those arrangements and actual broadcasting practices. This does not mean, however, that any set of institutional arrangements is compatible with any intended broadcasting policy outcome, even if the policy directives are specific.

An examination of the relation between the discourse of politicians and

broadcasters on broadcasting policy and their respective regulatory and programming decisions often reveals tensions between the rhetoric and reality. Consequently, there is a need to be precise about what type of policies, funding mechanisms and institutional arrangements are compatible with the desired operational or content outcomes and which are not. Indeed, the interplay of these variables in any specific context will often involve subtleties and idiosyncrasies that cannot be captured by any single theoretical model (Horrocks, 2002). The coherence of the government’s broadcasting policy and its efforts to re-establish the legitimacy of state intervention in the sector and rehabilitate a model of public service broadcasting therefore deserves detailed scrutiny. Likewise, TVNZ’s approach to Charter implementation, given the current funding mechanisms and institutional characteristics of the NZ broadcasting sector also needs to be investigated in order to reveal what models of public service might be realised in practice.

The government’s philosophy is premised on the notion of a “mixed economy” for broadcasting, in which the respective principles of the public sector (cultural/ democratic) and the private sector (economic/commercial) intersect. The recent broadcasting stock-take paper acknowledges that, “The power and pervasiveness of broadcasting as a form of communication and shared experience means that broadcast media play an especially significant role in the functioning of civil society, and can either promote or undermine its core values and goods” (Ministry of Culture and Heritage, 2003, section 6). It duly notes that private/commercial principles became dominant in the broadcasting sector during the 1990s, and that a purely commercial system may not adequately fulfil cultural and democratic functions, hence the need for rebalancing. However, it also contends that, “Private broadcasting may promote, protect, and embody core values in civil society, in much the same way as may private/commercial activity. Private/commercial broadcasting may result in types of desired programming, efficiency benchmarks and industry development that would otherwise not exist.” (Ministry of Culture and Heritage, 2003, section 14). This argument appears to entail a contradiction between, on the one hand, an acknowledgement of the market failures attributable to a predominantly private/commercial model of broadcasting and, on the other, an expectation that private/commercial broadcasting can nevertheless address those failures.

The contradiction is not simple, however. The government’s “third way”

philosophy and insistence on the compatibility of public service and commercial principles is premised on a denial of any dichotomy between them. The Minister of Broadcasting acknowledges that during the 1990s;

“In its embracing of market-driven policies, government distanced itself from what I believe is its responsibility to ensure that New Zealanders have access to a genuinely indigenous broadcasting system … Since 2000 there has been a fundamental shift in the way government in New Zealand thinks about broadcasting and how it sees its own role in broadcasting. The government … has reclaimed the right and the obligation to involve itself meaningfully in the broadcasting sector.” (Maharey, 2003b).

Maharey goes on to argue that;

“We have done much to ensure that we have in place a mixed broadcasting economy in which both public and private interests have a role to play … In charging our publicly-owned television broadcaster with the dual remit of implementing its public service charter while maintaining commercial viability we have created an arrangement to meet our particular needs as a nation. We are forging a new approach that combines social and commercial objectives for public service television. In a country with the tax-base the size of ours, the government cannot hope to make sufficient funding available to fully support a public television service. While the government provides extra money to support the charter, TVNZ nevertheless relies on commercial

revenue from advertising to pay for much of its local content.” (Maharey, 2003b).

The approach to policy outlined above is highly nuanced and requires careful

interpretation. For example, state involvement in the broadcasting sector as a whole is

equated with intervention in the publicly-owned sector. Similarly, the claim that a

“mixed economy” approach incorporating both public and private interests will meet

“our needs as a nation”, suggests that private interests are part and parcel of the

collective interests of civil society. In fact, the notion of “mixed economy” could be

understood in several ways. For instance, it might refer to a television sector

combining state-owned and private-owned commercial media (New Zealand 1989-

2003), a sector consisting primarily of private commercial media but with a public-

owned institution ostensibly serving both commercial and public service functions

(New Zealand present scenario), or a sector where both public and private institutions

with discrete and complementary commercial and public service functions co-exist

(UK present scenario). Such ambiguity may facilitate an expedient conflation of these

very different models so as to legitimate the former two through the connotations of

the latter.

The government’s claim that the tax base cannot provide sufficient funding for a

public television service might be currently realistic, but it nevertheless depends on

assumptions about the legitimate scope of social policy and the political will of the

government (see Frewen, 2003b; Norris, 2003). Moreover, while Maharey

acknowledges the tensions between commercial and public service objectives implicit

in the TVNZ Charter, by demarcating alternative policy options as outside the scope

of realistic consideration and by foregrounding the notion that a “mixed economy”

favours the collective interest, the latent contradictions are obscured. As Fairclough

(2000) observes, the representation of economic reality as fixed and immutable,

coupled with an emphasis on the convergence of commercial and public interests

while downplaying (without completely denying) implicit contradictions is a

characteristic feature of “third way” ideology.

Responding to questions about the way in which TVNZ’s obligation to

maintain commercial performance might limit the extent it can fulfil Charter expectations, Steve Maharey comments, “I am in general comfortable with the ‘mixed economy’ broadcasting model. A dual role for TVNZ is a compromise in way, but I hope not too awkward a one. I think it’s quite significant that the government has moved to re-commit to a public television company with public broadcasting objectives rather than treating it as if it were a private company.” (Maharey, 2003c). The change in policy trajectory certainly is significant, but questions about how far the Charter objectives will be fulfilled remain. The minister concedes that TVNZ’s obligation to maintain commercial performance may limit the extent of its public service functions, suggesting that the Charter’s specified objectives are “indicative, not prescriptive” (Maharey, 2003a). The uncertainty is acknowledged in the following comment: “I wouldn’t pretend that the Government or the company know exactly what the end result of this will be- because no one else in the world has tried to do this before.” (Maharey, 2003, quoted in the NZ Herald, 12.10.03).

Ian Fraser (2004) similarly acknowledges that one of the more difficult challenges

he has faced is in articulating precisely where TVNZ is heading. As CEO, his mandate is to “Deliver the charter but don’t screw the business.” (NZ Herald 4.01.03). Accordingly, a plethora of statements about the Charter, both from government and TVNZ itself come with the suffix ”and maintain commercial performance”. Fraser does make the following clarification, however:

“What will change is the balance. Under the Charter, we will be driven by content considerations, where creative and cultural objectives are as highly valued as commercial ones. This does not mean ‘worthy but dull’. Nor does it mean we are becoming elitist. We are constructing a home place for more New Zealanders, not an ivory tower for a few of them. But the charter encourages us to invest in talent and imagination, to take creative risks and to provide a more diverse menu, particularly in prime time… The Charter is not a licence to bore our viewers. If we do our job well… we expect that our viewers will have difficulty identifying what is, or is not, a Charter programme. Put simply, the Charter becomes the blueprint from which all programming decisions are made from now on.” (TVNZ, 2003a).

The rejection of any simple dichotomy between Charter objectives and commercial

objectives is central to Fraser’s approach to rationalising and implementing the dual remit, but as he readily acknowledges;

“That balance is really hard to find… We’re not running TVNZ according to a discounted cash-flow analysis any more… [But] for all the words of the Charter, we’re not operating in a world where there are two clearly-defined poles, one of which- at one extreme- is hard commercial, and the

other being the commonly accepted definition of public broadcasting. There’s no question that the models of public broadcasting are now many and the definitions have changed… We’re not going back to a particular model of public broadcasting, nor clearly do we have a mandate to turn TVNZ into a version of Radio New Zealand with pictures… The most important thing about the balance is to convince ourselves that the balance is achievable.” (Fraser, 2004).

The precise conception of “public service” in the context of TVNZ’s dual remit

therefore remains contested both in principle and in practicexi. Interviewing Michael Jackson (former CEO of UK Channel Four) at the recent Wellington conference on the future of public broadcasting, Fraser quoted Jackson’s controversial remark that the idea of “public service” has become “A battle standard we no longer need rally to”, “a pointless juju stick of British broadcasting”, and “a term now drained of all meaning and purpose”. Fraser then asks, “So who should define public broadcasting in 2003, the viewers, or the broadcasters or the commentariat, who? Who takes control of the definitions? Because there’s some incredible power in that.” (Fraser, 2003b).

In response, Jackson points to the need for government to engage the public in on-

going debate about broadcasting, and emphasises the importance of a strong not-for-profit broadcaster. Explaining that his suspicion of the term “public service” stems partially from its historical, paternalistic connotations, he also comments, “The other reason I don’t like the term ‘public service broadcasting’ is that all too often it is used by the enemies of intervention in the marketplace to quarantine that intervention, and what I mean by that is we’re happy to have a little bit of public money, provided that it’s going into things that don’t really matter, that don’t really affect the marketplace too much…” (Jackson, 2003).

Bob Collins (former director-general of RTE in Ireland), speaking at the same

conference, expressed similar concerns about politically expedient conceptions of public service:

“No discussion about the role of broadcasting would proceed very far before someone demands a definition of public service broadcasting. Sometimes this call for clarity is genuine and disinterested. But frequently, it is the opening shot in a campaign to reduce its scope and ultimately its resources: The definition that is being sought is limiting and restrictive, rather than clarifying and liberating… And perhaps the reality is that the question to be asked is not, ’what is the definition of public broadcasting?’ but rather, ‘what are the goals of public policy in broadcasting in any given society now and in the medium term?’ The question is no longer one of definition; instead it is about the appropriate scope for public policy to intervene in the broadcasting environment.” (Collins, 2003).

Collins goes on to argue that restricting public service interventions to mechanisms

that merely compensate for market failures in some areas of programming not considered attractive by the commercial sector is “a fraud on the legitimate expectations of the audience”. While acknowledging the challenges, he considers a hybrid public/commercial broadcaster to be viable in principle, suggesting that “the public remit and commercial revenue are not mutually exclusive”. Nevertheless, he warns that;

“[The] public service character and obligations are of the essence and must inform the very fabric and texture of the broadcaster. It is not simply a case of welding on some areas of defined social responsibility to an otherwise wholly commercial organization. It also follows that the public character is reflected in the overall schedule and is not something which inheres in individual programmes which are then distributed across a schedule, somewhat like sultanas in a fruitcake.” (Collins, 2003).

The concerns of Jackson and Collins about the deployment of particular definitions

to circumscribe debate and policy are important. As Fraser rightly suggests, the definitions are contestable, and the control over the definitions of public broadcasting is a politically significant issue. Insofar as policy discourse defines public service as merely the compensatory provision of programming otherwise overlooked by commercial broadcasters, or in terms of local production irrespective of genre or quality, it risks normalising that impoverished conception, thereby delegitimating more progressive alternatives as unattainable or unaffordable. Indeed, that is precisely one of the criticisms of the necessary, but ultimately insufficient, function of NZ On Air in funding local content productions which would otherwise not be attractive to commercial operators (see Thompson, 2002, 2004). The TVNZ Charter is specifically intended to broaden that conception, even if some of the more qualitative outcomes are not easy to evaluate.

However, the Charter is only part of TVNZ’s dual remit, and consequently, there

remain problematic questions about the notion of “balance” between commercial and public service functions. The notion of balancing Charter and commercial functions potentially describes several different approaches. For example, it could take the form of half the programming content decisions being made on the basis of maximising audiences and advertising and the other half being made according to Charter principles (e.g. innovative risk-taking and representation of minority interests), irrespective of ratings and revenue. Finding a balance could also mean implementing Charter principles in approximate ratio to the amount of government funding to commercial funding. Although some Charter programming would be commercially viable, this would currently entail a heavy bias towards commercial operation. Alternatively, TVNZ could continue to operate on a broadly commercial basis but allocate its public funding and any surplus revenue towards maximising the proportion of commercially viable programmes which also met Charter criteria. However, this might entail neglecting key aspects of the Charter which could not be commercially accommodated (e.g. innovative risk taking and minority interests).

The first scenario seems highly unlikely because of TVNZ’s need to maintain

overall commercial performance. If government contributions remain relatively small compared with TVNZ’s dependence on commercial revenue, then there is a chance the second scenario might prevail. Were this to happen, then the danger would be precisely as Collins (2003) describes, i.e. that TVNZ would remain an advertising-dependent broadcaster with some welded-on social responsibilities, providing a few public service sultanas in an otherwise commercial cake. However, it is the latter scenario which is ostensibly most congruent with Ian Fraser’s “blueprint” conception of the Charter (which denies any clear distinction between commercial and public service programming). This may go some way to avoiding the limitations of the first two scenarios. Ultimately though, if an emphasis on the mainstream, commercially-viable aspects of the Charter could lead to higher quality commercial television it would nevertheless be achieved at the expense of compromising on the broader range of public service functions. To gain a more realistic assessment of what kind of

balance between Charter and commercial imperatives will emerge, it is necessary to consider some of the cultural, political and economic challenges facing TVNZ.

TVNZ’s cultural turn Prior to the 1999 election, (with remarkable prescience of his future role) Fraser

himself commented on the notion of TVNZ being restructured as a chartered public service broadcaster funded by commercials, claiming that, “I want a broadcaster that will do better than just making the programmes advertisers want… [but] to achieve the paradigm shift, you’d need inside TVNZ a neutron bomb.” (Fraser, 1999). TVNZ’s commercial success over the past decade reflected an internal culture which identified with beating the competition in the ratings and excelled at making top-rating programmes to deliver big audiences to the advertisers (Drinnan, 2003).

Given TVNZ’s enormous success as an SOE, there was understandable suspicion

and, indeed, resentment (Comrie and Fountaine, 2003) of the Labour government’s plans to fix what, in the eyes of many TVNZ employees, was a system that worked. As Bill Ralston (recently appointed as head of news and current affairs) remarked back in 2000, “The government fears that TVNZ as an organisation will lie, obstruct, and generally sabotage any attempt to turn it into a public broadcaster in the hope that it can delay any restructuring until after the next election- when, perhaps, a new, more sympathetic government might rescue it from the wussy status of public broadcaster.” (2000, pp.40-41). Thus without an internal shift in broadcasting values, TVNZ’s change in status from an SOR to a CROC with a public Charter would be insufficient to ensure the desired changes in content. Hugh Rennie (2003) underlines the problem xii: “I’m slightly depressed by the TVNZ Charter. There’s nothing wrong with it at all except it’s so obvious, it’s disappointing that it ever had to be said.” Yet as Hobbs (2002) points out, it was not necessarily obvious to TVNZ: “Why I actually wrote a Charter was because I had people from TVNZ and the industry saying, ‘What does social responsibility mean?’ ”

The extent to which the commercial mind-set had eclipsed any vestigial sense of

public service within TVNZ, and equated social responsibility with dividend payments is indicated by the fact that the government considered it necessary to specify Charter values in legislation. Asked about his previous assertion that transforming TVNZ’s culture would need a neutron bomb, Fraser (2004) remarks;

“[The] fairly wide-ranging mandate for change… is provided not just by the Charter but by a government which makes it clear, almost on a daily basis, that it does have different intentions for public broadcasting, and you could say that that is the neutron bomb… It’s very easy to underestimate how important it is for TVNZ to have a Charter. If you look back… we’ve never had one before and arguably in the early days of… TVNZ, you didn’t need a Charter. There was a form of consensus about what public broadcasting really meant, but I don’t think it was one that was frequently debated- which is one of the reasons that when we ended up moving down the road… to a very hard commercial model, there seemed not to be a great deal of debate about that either.”

Both Fraser and other TVNZ managers claim that the Charter philosophy has now

been broadly accepted by the staff. Indeed, Fraser (2004) comments that “Everything I hear now… suggests that there is now quite clearly a culture change, and we’ve worked very hard to achieve that. In broad terms, we know that the Charter mandates change… but what we talk about a lot is not just change, but our commitment to be a

better broadcaster… and there aren’t many left in TVNZ who are cynical about [that].” There has certainly been a significant turnover of personnel in TVNZ since 1999, with Roseanne Meo (chair of governors), Rick Ellis (CEO) and Paul Cutler (head of news) being the highest profile departuresxiii.

However, it is interesting to note there has also been some high-profile turnover

even among the new people appointed to implement the Charter. The new chair, Ross Armstrong resigned in the midst of a scandal over misuse of funds, the new head of news Heaton Dyer resigned for “personal reasons” xiv, and the head of business development, Marty Behrens resigned citing TVNZ’s lack of vision and risk-taking:

“I joined TVNZ because I welcomed the new socio-cultural focus and the TVNZ Charter and I also welcomed the challenge of… balancing the business objectives with the social and cultural goals… [but] without a culture of risk-taking and experimentation it’s going to be very difficult to invent the new world of public service broadcasting and commercial performance at the same time” (Behrens, 2003).

Initially, Fraser was certainly cautious about implementing radical major

organizational overhauls, (Drinnan, 2003). According to the (then) head of public affairs, Glen Sowry (2003), the most significant structural changes are intended in the area of programme commissioning and production, where job descriptions and key performance indicators are being changed to better reflect Charter requirements; “The Charter does not call for operational changes- it is very much focused on outputs and outcomes… The area that has seen the biggest structural change with reference to the Charter is the commissioning team. Most other parts of the business will remain structured as they were prior to the Charter.”

Fraser (2004) acknowledges that there has been a significant amount of internal

turmoil generated by the Charter-inspired changes, but suggests this has been exacerbated by the “ferocious” and “absurd” media scrutiny of TVNZ’s every move, regardless of triviality. The evidence of internal disruption at TVNZ may well indicate a shift in internal values, but that still leaves questions about the way the Charter will be implemented in practice. There are still many sceptics who consider the current evidence of progress toward Charter implementation to be inadequate (see Frewen, 2003a; Chalmers, 2004). Even assuming that there is now some degree of conversion to the mission to balance public service and commercial imperatives, there is no guarantee that TVNZ’s cultural turn would be sustained were future changes in management or government to discontinue the current political commitment to Charter values.

Responsibility without power or money There is no escaping from the fact that TVNZ’s primary source of revenue

demands programming which will still attract significant audiences. Some commercially viable content will certainly be compatible with Charter objectives, and the audience’s appetite for content which informs and educates as well as entertains ought not to be underestimated. However, prevailing audience preferences reflect a decade of cultivation on increasingly commercial content. While ratings may indicate relative popularity, they are historical, in the sense that they demonstrate audience responses to existing genres and formats. They do not provide a guide to the potential

appeal of original types of programming. Consequently, a significant tension exists between the ideals of the Charter in promoting innovative, quality programming and the commercial temptation to stick to tried and tested commercial formulae.

Nevertheless, in recognition that fulfilling Charter obligations will require TVNZ

to make programming decisions that reflect criteria other than revenue maximisation, the government decided to directly subsidise TVNZ, beginning with $12m in 2003 and rising to $17m per year by 2006-7 (Maharey, 2003d). TVNZ had originally estimated the costs of Charter implementation to be between $20 and $50 million per year (NZ Herald, 9.05.02) and even $17m of Charter money represents less than 5% of TVNZ’s annual operational revenue. While relatively modest, this direct funding is politically significant for three reasons:

Firstly, the subsidy from general taxation constitutes acknowledgement

that the provision of public service broadcasting requires that programming decisions be insulated from normal commercial criteria (i.e. ratings maximisation). Secondly, it recognises that the government must intervene financially in the broadcasting sector in order to ensure the market does not ignore cultural and democratic considerations. Thirdly, it confirms that the function of New Zealand On Air (itself now funded directly from government) in commissioning the production of local broadcasting content, is a necessary but ultimately insufficient provision for public service broadcasting.

On that point, Maharey’s ministerial briefing papers from the Ministry

of Arts, Culture and Heritage specifically state that, “The Ministry will administer, on behalf of the Minister of Broadcasting, the funding provided in Vote Arts, Culture and Heritage to fund Charter related initiatives by TVNZ. This appropriation is for $12 million per annum (GST inclusive), and is for initiatives that are not commercially sustainable, and for which NZ On Air funding is not typically available. xv” (Ministry of Arts, Culture & Heritage, 2002).

The direct funding of TVNZ was expected to be accompanied by a

diminished expectation of dividend payments and soon after the Charter legislation was ratified, Ian Fraser stated that he would be “really surprised if there was an expectation that TVNZ should continue to deliver any kind of substantial dividend” (NZ Herald, 9.05.02). It would certainly seem obtuse to provide TVNZ with additional funding at the same time as demanding continued dividend payments. However, the Treasury has been reluctant to reverse the flow of revenue from TVNZ to government coffers, and the expectation of a dividend has not been rescinded. Indeed, the TVNZ Statement of Intent for 2004 (TVNZ 2003c, section 12) states that “It is intended that surplus funds generated from operating activities will be distributed annually to the Shareholders. Surplus funds from operating activities has been defined as net operating cash flow less funds invested in an required for the continuity of business activities.” The document lists the estimated surpluses for 2004-2006 as $19.3m, $15.9m, and $20.9m respectively, which is in excess of the Charter subsidy provided by government. Thus according to these figures, the government’s net contribution to the Charter will actually be negative. It would therefore appear that the Ministry for Culture and Heritage is giving TVNZ money with one hand, only for the Treasury to take it back with the other.

Steve Maharey and Ian Fraser were both asked about this seemingly

contradictory dividend payment arrangement. Maharey (2003c) explained that,

“The Crown Company Monitoring Advisory Unit (CCMAU) advises government on the commercial operations of TVNZ (as it does with other Crown entities such as State Owned Enterprises). As, in terms of the legislation, the company [TVNZ] is still expected to be profitable, CCMAU expects it to make a dividend payment. This is based, partly, on the view that a requirement to pay dividends acts as an incentive to the company to maintain its commercial viability.”

Maharey has publicly reinforced this expectation: “I’ve said to them, ‘you

should be under no illusions the government wants a return… Because if we don’t get a return, then our concern will be that the company is not running in a commercially successful way’.” (Maharey, quoted in NZ Herald, 12.10.03). The dividend requirement certainly imposes a bottom-line discipline on TVNZ, but it raises questions about how far the dividend may be a disincentive or impediment to Charter implementation.

Fraser (2004), meanwhile, has a somewhat different interpretation, and

considers that TVNZ’s financial obligation to CCMAU should not be conceived as a conventional dividend: “What the government has accepted is that from hereon in, we will pay back to the government what’s left- the surplus cash flow- at the end of the financial year… I actually don’t see it as dividends at all; I just see it as ‘you didn’t need that money, you didn’t spend that money, we’re going to take it’, and it’s difficult to argue with that.” He contrasts the dividend system under the SOE structure (whereby particular formulas determined a percentage of revenue to be paid to the Crown), with the current system which will allow TVNZ the flexibility to make Charter investments, so long as the company remains solvent and pays back any spare change to the government: “We invest in a generous-spirited but obviously commercially responsible way to the limit of what we believe our cash flows accommodate.” (Fraser, 2004).

Apart from the fact that anticipated dividend obligations would

influence the estimated cash flows and surpluses available for investment, there is evidently a discrepancy between the projected surpluses for 2004-2006 and “generous-spirited” Charter investment. On this point, Fraser concedes that there would always be an internal demand for any available funds, and suggests that the surplus projections in the Statement of Intent could change, citing the mid-financial year separation of BCL/THL from TVNZ as one reason why the calculations were speculative. Whether the Treasury would welcome such apparent financial uncertainty is a moot point. Asked whether it would be tenable for TVNZ to inform CCMAU that no dividend would be forthcoming, Fraser (2004) comments;

“TVNZ could realistically elect to pay no dividend under the current arrangement, and the mopping up of cash left over at the end of the financial year might not be presented publicly as a

‘dividend payment’ in any case… To pay nothing, however, could be construed as a provocative act. We are aware of the climate within which we operate and I think we shall be searching for a balance here”.

This reveals an important contradiction between pursuing the

cultural/democratic imperatives demanded by the Charter and maintaining commercial performance on the terms of the Treasury/CCMAU. On this point Fraser (2004) confirms that, “Of course there’s a tension. It means there’s an on-going debate- and it’s often pretty full blooded- between TVNZ and the financial monitoring agencies.” Asked who ultimately decides the size of TVNZ’s contribution to the Treasury, Fraser candidly concedes, “I don’t know whether it will be determined by the governors or by CCMAU”.

However these tensions are resolved, and irrespective of whether

CCMAU, the Minister of Broadcasting, the TVNZ board or Ian Fraser has the final word on dividend/surplus payments, even the relatively modest amounts money being put towards the Charter are contested. This is evident in the decision to amend the TVNZ Charter Bill prior to ratification, resulting in TVNZ’s transmission subsidiary, BCL, being separated from the TVNZ CROC, and re-established as a stand-alone SOE, Transmission Holdings Ltd. (THL), late in 2003. The original plan would have involved setting up BCL and TVNZ with different sub-boards under a third over-arching board. However, amidst ostensible concern over the governance structure and financial transparency between the television and transmission operations, the Bill was subsequently amended xvi.

Interestingly, the ministerial news release announcing the split prominently

featured Michael Cullen, the Minister of Finance, who remarked, ”The split will result in increased transparency and accountability and allow the two parts to each focus on their core business. A different mix of skills is needed for the governance of each business and this can best be achieved by having separate companies.” (Office of the Minister of Broadcasting, 2002b). In the same release, Steve Maharey also commented that, “The loss of BCL’s earnings will not result in a loss of revenue for TVNZ. Funding decisions about how and to what extent TVNZ should be compensated to fulfill its charter are more appropriately made by the government, not TVNZ directors.” . Be that as it may, it would appear that different interests within the government have different expectations about how much that should be.

When the TVNZ Bill went through its final reading, the Minister of Broadcasting

conceded that the BCL split would have financial repercussions for TVNZ:

“A decision not to separate the businesses would have mean that the TVNZ group might have been inclined to extract revenues from BCL to fund the television interests at BCL’s expense… Clearly there will be a loss of income to TVNZ if it can no longer extract dividends directly from BCL… [but] it is questionable what benefits might have been derived from distracting members of the Board and management of TVNZ onto matters associated with BCL’s operations and development… Under this legislation, the Board of TVNZ will therefore be in a position to focus on

the its primary objective of implementing the charter- while, of course, maintaining commercial performance.” (Maharey, 2003a).

Thus the premise underpinning the decision to split BCL/THL from TVNZ is that

the transmission section’s operation as a profit-driven SOE is incompatible with the television section’s role as public service broadcaster. While this pretext may be valid, it directly contradicts the government’s rationale underpinning the decision to restructure TVNZ as a CROC with a dual commercial and public service obligation.

The Minister of Broadcasting is correct to assert that the split means TVNZ cannot

now extract surplus funds from BCL xvii. Indeed, TVNZ’s dividend payment in the 2003 financial year came entirely from the BCL subsidiary (Fraser, 2004), which was one reason why the Treasury was in favour of the split. Now restructured as part of a separate SOE (THL), BCL will be expected to continue contributing to the consolidated fund. TVNZ will still have access to the contestable NZ On Air funds, of which it has historically been the principal beneficiary, receiving approximately 80% of the $60m allocated to television (Norris, 2003). That source of funding existed prior to the Charter, however, and it is important to recognise that its availability did not prevent the market failures of TVNZ’s operation as an SOE. Fraser (2004) considers the Charter obligations to warrant the allocation of NZ On Air’s entire television budget to TVNZ. However, this is strongly opposed by NZ On Air (which would become largely redundant if this were to occur), TV3 (which currently receives around 20% of that money) and also the independent producers (who fear that their autonomy would be subordinated to TVNZ’s scheduling priorities were it to become the sole outlet for their programming xviii).

The current levels of state funding via NZ On Air and the Charter subsidy provide

TVNZ with around 10% of its overall revenue before any dividend repayments (Fraser 2004), which is considerably less than RTE (the Irish Broadcaster with which TVNZ is often compared because of its dual public/commercial role), which was still receiving 35% at its lowest point of license fee subsidy (see Collins, 2003). While the government’s new Film Commission funding may provide an additional source of revenue in the future, it is unlikely to be on a scale sufficient to make a substantial difference to TVNZ’s heavy dependence on advertising revenue. This puts TVNZ in a difficult situation whereby the public funding is disproportionately small compared with the expectations of non-commercial Charter objectives. As Stephen Carter, (CEO of Ofcom in the UK) poignantly observes, “Experience from elsewhere in the world shows that public funding and advertiser funding make poor bedfellows within a single broadcaster; as it lurches between conflicting incentives, its public service programming suffers” (Carter, 2004). Compromise is therefore inevitable, but to understand the nature of the likely trade-offs between commercial performance and Charter goals, some more specific examples need to be considered.

Twilight of the (NZ) idols? Fraser (2004) accepts that TVNZ’s dual remit will necessitate compromises,

although he hopes to a lesser degree than under the SOE structure. One example of a largely insoluble conflict between commercial and Charter goals is the inclusion of “minority” and “special interest” programmes in peak-time slots, and here Fraser concedes that the commercial imperative makes this hard to justify. As Sowry (2003) likewise points out, “Our primetime schedule must continue to attract strong audiences and ratings. We would expect that quality Charter programmes can be screened in primetime and attract good ratings. Shortland Street, for example, is definitely a Charter programme. A niche Charter programme would not typically

screen in prime time.” This also indicates that existing commercial programming is considered to be an integral part of a schedule that ostensibly fulfils Charter requirements.

The Statement of Intent for 2004 (TVNZ, 2003c, section 4) notes that “The

company will… be looking to find smarter and more flexible means of commissioning and scheduling programmes to deliver our charter mandate without eroding the overall ratings.” The document notes a range of programmes which ostensibly support Charter objectives, including both long-standing programmes (e.g. Fair Go and Te Karere) and more recent productions preceding, but anticipating, the Charter’s implementation (such as Mercy Peak, and Sunday). Nevertheless, developments since the Charter’s introduction include new topical discussion programmes (e.g. Face to Face with Kim Hill, Agenda, and the Maori-oriented Eye-to-Eye), and current affairs/documentaries (e.g. Foreign Assignment and One News Insight ). The range of content is certainly beginning to reflect some progressive developments in line with the Charter service principles, and without such guidelines, some of the aforementioned programmes may not have been developed. However, when the overall schedule is considered, commercial content (including the highly imitative NZ Idol and various “reality TV” shows) remains strongly predominant, especially in prime time. Despite the indications of progress, it would therefore be premature to suppose that TVNZ had undergone a radical transformation.

Meanwhile, TVNZ’s commercial rival, TV3, is less than happy about what it sees

as continuing commercial aggression from TVNZ. CanWest NZ CEO, Brent Impey (2003) expresses TV3’s resentment at TVNZ’s acquisition of the Maori drama series, Mataku. He contends that having taken the initial risk of screening the untested first series, TV3 was in negotiations with NZ On Air and Te Mangai Paho for the second when TVNZ poached it to enhance its Charter profile (using public funds to outbid TV3). His assessment is blunt:

“Surely the concept of funding Charter programming on TVNZ is to allow the broadcaster to provide a broader range of New Zealand programming than was achievable under the old commercial model… TVNZ in my opinion is abusing the funding, by funding already-existing programming and purchasing of foreign programming. This is taking the Charter and making a mockery of it… Do we really believe the Charter was meant to provide an unfair advantage so the state broadcaster can take local programming from other broadcasters?… [TVNZ] seems more interested in beating the competition instead of adding to the fabric of New Zealand.” (Impey, 2003).

CanWest, of course, stands to be the principal beneficiary if TVNZ’s pursuit of the

Charter leads it to be less commercially aggressive, but Impey’s criticism has a validity beyond mere self-interest. The inclusion of existing content as evidence of Charter fulfillment could be interpreted as symptomatic of the modest scope of reform being contemplated. Fraser (2003a) counters by insisting that some pre-Charter programmes would not be viable without public subsidy. While that is a fair assertion, it overlooks the point that had the pre-Charter schedule adequately fulfilled television’s cultural/ democratic function, then there would arguably have been no need for the Charter.

Fraser (2004) acknowledges the need to push some boundaries: “There is a greater

expectation that we need to take some risks around the schedule as well as around the commissioning of particular programmes, whereas five years ago, there was an

automatic assumption that if a decision was to be made, the commercial imperative was always to hold sway.” However, he is also acutely aware of the pressure to maintain ratings in a complex media environment in which audiences are becoming increasingly fragmented, thereby diminishing broadcasters’ capacity to reliably access mass demographic segments. On this point, Fraser (2003b) comments, “If you’re the Chief Executive of TVNZ you look at the possibility with a certain amount of horror. You know we’re in the situation where we typically enjoy around 65-75% of the free-to-air audience and we scare ourselves that if we drop any of that, the commercial consequences could and probably will be dire.”

There is evidently a risk aversion inherent in making content decisions so as to

ensure ratings remain within a commercially viable threshold. Such considerations help explain why several new Charter programmes (such as Agenda or Eye to Eye) have been piloted late in the evening or on weekend mornings. As Fraser (2004) confirms, TVNZ has “a fear, which I think is well founded, of doing something so bold in taking the audience from one programme to the next, from a 16 rating to a 3… that you end up completely destroying the schedule as a means of delivering a decent-sized general audience over the course of a night’s viewing.” This argument suggests that even the “sultanas in a cake” approach (i.e. making Charter content available in proportion to TVNZ’s insulation from commercial pressure) is untenable, since even a single badly-judged programme placement could harm ratings not just for that slot, but across the subsequent schedule. As Behrens’ (2003) earlier comments indicate, the danger here is that the low level of public funding, coupled with the obligation to maintain commercial performance, will encourage aversion to risk, stifling the very innovation and creativity that the Charter seeks to promote.

An examination of news and current affairs will help to illustrate the issues here.

This area of programming is important for two reasons: Firstly, because news and current affairs are a central component of any notion of public service and play an especially vital role in democratic processes; secondly, because the tensions between commercial and public service values become particularly visible in the news-room. Indeed, the increasing tabloidisation and depoliticisation during the 1990s made television news the focus of sustained academic criticism (Atkinson, 1994; Hope & Jesson, 1997; Cook, 2002). Accordingly, the Charter emphasises the need for high quality in this area. However, as Sowry (2003) explained, “The Charter places significant emphasis on News and Current Affairs. Clearly, we also expect this programming to rate well, both for commercial reasons and also as a test of relevance to the audience.” Those expecting the news to exhibit the most significant Charter-driven changes would therefore not have been impressed by creative Director Andy Jacquet’s claims that the new One News studio and theme music represents “a radical and bold move” (NZ Herald, 17.02.03). Indeed, it seemed more reminiscent of the commercial makeover undertaken in the newsroom during the early 1990s than a public service initiative (see Campbell, 1992). Meanwhile, the documentary series Assignment was superseded by the more populist Sunday. The (then) head of news & current affairs, Heaton Dyer, explained the change, saying that, “Last year, we did 26 Assignments, and I don’t think you’d find anyone on the programme who would disagree that there weren’t 26 issues that justified a whole hour.” (quoted in Clifton, 2003, p.21). On a strictly commercial basis, this may be a valid point, but given that the Charter asks for “comprehensive, impartial, authoritative and in-depth coverage and analysis of news and current affairs in New Zealand and throughout the world” it is symptomatic of a serious deficiency in political imagination.

More recently though, under Bill Ralston, news and current affairs recently

underwent a more significant restructuring. Assignment was dropped altogether

because, as Fraser (2004) puts it, “I think it had become fat and lazy… We took it off because it had passed its use-by date.” Meanwhile, operating costs have been cut by $4-5 million. Although the TVNZ Charter legislation expressly forbids the Minister of Broadcasting from interfering with programming, this development prompted Maharey ask the board for reassurance that the cuts were not a “slash and burn” exercise (NZ Herald, 12.10.03). He appears to have accepted Fraser’s explanation that the exercise was intended to rein in excessive overhead expenses and pave the way for investment in better news:

“I want to see more news and current affairs and I want to see better news and current affairs… [but] it’s an area where there has been less proper interrogation of costs than any other within TVNZ. They’ve been protected and cosseted and they no longer are, and that’s a good thing… Bill Ralston would be the first to acknowledge we’re setting out to produce better news and current affairs more in harmony with the values of the Charter. Are we there yet? -Of course we’re not, but it’s a really important thing to have made the commitment.” (Fraser, 2004).

One of the things entailed by that commitment is investment in more specialist

reporters, new regionally-based news offices, and a management commitment to improving the depth of analysis xix (TVNZ 2003c). TVNZ has also committed to more hard-news documentaries (such as One News Insight ) which, according to Fraser (2004) “will fulfill the remit that Assignment was set up to fulfill and seemed to me, and to Bill Ralston, to be fulfilling less and less.” xx There has also been a suggestion that current affairs issues in the evening news might be introduced more into the Holmes programme, although this may not be compatible with the latter’s current emphasis on human interest angles, and would have to be weighed against the risk of reducing its audience appeal. Nevertheless, the decision not to renew Richard Long’s contract and move to a single-presenter format for the evening news may indicate the start of a move away from parasocial banter between the anchors and more emphasis on serious news issues.

Fraser (2004) contends that there is now a commitment to a fuller treatment of

news items that warrant more in-depth attention: “We’re learning to write and construct news in a more direct, straight-forward and hard-edged way. The move to a single presenter at 6 pm was a way of being more straight-forward in our delivery of the news… Judy [Bailey] is doing far more interviews within the context of an hour-long bulletin. You make yourself space to do that by having only one presenter.” Such measures will not fully compensate for the continuing high proportion of advertising, sport and soft news within the evening news-hour, but they may be indicative of more progressive changes to come. Bill Ralston is reported to have encouraged more risk-taking in news and current affairs, but he has also told news workers to find more exclusives and avoid “boring” stories (NZ Herald, 01.07.03). Similarly, the NZ Herald (11.10.03) cites a leaked TVNZ newsroom memo apparently urging reporters to emulate TV3’s “warmer” style after TVNZ’s news lost ratings-ground to its rival. Such developments suggest an on-going tension- directly reflecting TVNZ’s dual remit- between improving the depth and substance of news and current affairs and enhancing its commercial appeal.

It is important to recognise that the evening news is also considered to be a

commercially vital capture-point for the prime-time audience. Accordingly, Fraser confirms that, “At the end of the day, the 6 pm bulletin is a mighty engine- commercially- for the channel, and we’re not going to gamble imprudently with that.” (ibid). The continuing emphasis on ratings and revenue inevitably imposes a limit on

the degree to which innovation and risk can be tolerated. This is not simply a matter of economics however. The ratings also have a cultural and political dimension which, as the next section will discuss, are central to the legitimation of the Charter.

Legitimation crisis Ratings are a critical factor in the attraction of commercial revenue, and while

audience composition/ market segmentation influences the value to an advertiser, for mainstream broadcasters the general rule is that bigger is better. However clumsy and misleading ratings figures may be (see Lealand, 2002), they have an importance to broadcasters as a test of relevance to the public. This is an essential consideration for broadcasting institutions responsible for public moneys, since high ratings can be cited as evidence that it has been judiciously invested. The legitimation of taxpayer contributions to a broadcaster are premised on its content appealing consistently to a significant core proportion of the audience (see Graham & Davies, 1997). As Steve Maharey (2002b), commenting on NZ On Air funding policies, stipulates;

“[The] logic is pretty clear-cut. If you’ve got a dollar to spend and you can hit an audience of 500,000, it is taxpayers’ money you’re spending: You should try and hit that 500,000. You should probably not be spending your money on a smaller audience- which doesn’t mean we shouldn’t be do some things around that, but I guess there’s a natural order… of priorities here which comes from the fact that if you’re spending a taxpayer’s dollar, you should try and maximise the use of that and that tends to mean you’ll spend your money on national broadcasting.”

Accordingly, NZ On Air is quick to point to the high ratings of the programmes it

funds in order to legitimate its continued funding. The institutional arrangements oblige potential beneficiaries to solicit a guarantee of screening from a national broadcaster to be eligible for funding. This raises questions about how much NZ On Air funding is really used to extend the range of content into programming that would otherwise be commercially non-viable (Thompson, 2004) and how far anticipated ratings influence funding decisionsxxi. Similar pressures apply to TVNZ: While the Charter money is specifically intended for functions not addressed by NZ On Air, the legitimacy of the Charter depends on its delivery of content that serves a broad range of audience interests and its apparent degree of public approval. This means that there is political as well as financial capital at stake in regard to the ratings. Retaining two thirds of the audience share would allow both TVNZ and the government to claim that there is robust public support for the Charter initiatives xxii. Ratings are therefore significant in their own right, not just in terms of the revenue they generate, precisely because they help to justify government expenditure on broadcasting.

Meanwhile, maintaining profitability and paying a surplus/dividend to the Crown

will not only satisfy CCMAU but also enhance “shareholder value”, making it more difficult for political opponents to delegitimate the Charter on an economic pretext xxiii. However, since 2000, TV One’s overall ratings have declined by 5%, and TV Two’s by 4% (NZ Herald, 11.10.03). This may reflect a more general trend toward audience fragmentation and any decline in TVNZ’s revenue has been off-set by recent increases in the demand for advertising xxiv. Nevertheless, declines in ratings and revenue would render the Charter vulnerable to criticism from the political right (which regards television as just another sector of business in which the state should not be involved). Don Brash, the new leader of the National party, accordingly articulates the neoliberal position:

“[Where] a Government enterprise is involved in a competitive market, there seems to me no particular reason for keeping it in Government ownership. For example, if TVNZ were a BBC-type broadcaster with minimal or no advertising and high-quality programmes, I could see real benefit in maintaining it in state ownership. But having essentially a commercial television station in state ownership seems to me to be very hard to justify. It's not obvious how TV One differs from TV3.” (NZ Herald, 30.03.03).

Fraser (2003a) actually agrees that Brash’s argument might be valid were TVNZ

really no different from other commercial broadcasters. He also confirms that TVNZ’s Charter plans are premised on a continuation of the current trajectory broadcasting policy, and if National were to form the next government, “It would potentially change everything. All bets are off.” (Fraser, 2004). TVNZ will not be impressed by Brash’s studious ignorance of the Charter initiatives, but the criticism that it remains no fundamentally different from TV3 is not exclusive to the right. This means that TVNZ not only has to maintain its commercial performance, but also has to be seen to be distinguishing itself from its commercial rivals xxv.

In this regard, the government has left the rather problematic task of developing

methods of gauging how effectively the Charter’s principles are being fulfilled to TVNZ. Steve Maharey has expressed an “expectation that TVNZ will establish meaningful performance assessment measures, and report regularly to the government.” (Maharey, 2003a). Accordingly, TVNZ (2003c) has proposed plans for telephone surveys, focus groups, electronic panels and other systems of collating general public feedback to complement the ratings. Interpreting Charter effectiveness through focus groups would certainly be more valid than relying on AC Nielsen “Peoplemeter” statistics. However, gauging abstract value-based notions such as programme quality, reflection of national/cultural identity and enhancement of civic participation in a valid manner involves complex theoretical and methodological issues. TVNZ’s proposals may provide valuable qualitative information about the audience, but one must bear in mind that even demographically representative survey samples are no guarantee that the more abstract ideals of the Charter are being addressed. The audience as a whole will tend to respond to the content that has been made available, not that which is absent. Ultimately, the nation’s collective viewing behaviour is a key factor underpinning the market failures that the Charter is intended to address. Even when we acknowledge the value of public service programming, left to our own devices as consumers, we will tend to watch more sport, movies and trivial reality shows than is sufficient to provide commercial broadcasters with an incentive to offer up more content to serve our cultural and democratic needs as citizens.

Considering Maharey’s argument that the government is more suited to deciding

how much money is needed to implement the Charter than TVNZ, it seems rather curious to then hand it the task of measuring how effectively the Charter is fulfilled. In the current political climate, TVNZ would be playing a dangerous game were it to develop performance criteria which it could not then claim to satisfy. While such a tactic might expose a discrepancy between the government’s rhetoric on the Charter and its willingness to provide commensurate funding, this would be regarded an untenable admission of failure on the part of both TVNZ and the government. Moreover, it would provide the political opposition with the opportunity to criticise the Charter as a demonstrably unattainable waste of public money. On the contrary, therefore, TVNZ may have a perverse incentive to develop imprecise benchmarks that permit claims to be fulfilling or exceeding expectations to be made without fear of refutation.

The citation of pre-Charter commercial programming in TVNZ’s claims to be

developing a schedule to reflect its new remit (TVNZ 2003c) reflects Fraser’s “blueprint” approach whereby there is a synthesis of commercial viability and public service across the schedule. In the context of Charter performance measures, this approach might also be construed as an expedient conflation of commercial and Charter content categories so as to enhance TVNZ’s apparent progress. On that point, Maharey (2003c) concurs with Fraser and remarks;

“I do not see a danger that content may be ‘conflated’ in order to fulfill Charter goals: One of the reasons for this is that I do not regard television programmes as always falling clearly into either a ‘commercial’ or a ‘Charter’ category. The Television New Zealand Charter does, of course, require the broadcaster to show some specific kinds of programmes that a purely commercial broadcaster might avoid; but commercially attractive material can also fulfill objectives of the Charter.”

However, this is not entirely congruent with Maharey’s previously stated

preference for content produced with Charter money to be identified in a manner similar to that of NZ On Air (NZ Herald, 04.03.03). This would have ensured that the use of that funding would be transparent, and prevented its absorption into the general operational budget. Of course, if CCMAU does not share Fraser’s views on the dividend, then identifying the Charter programmes made on the basis of the government’s negative net subsidy would be a pointless and embarrassing exercise. The Ministry for Culture and Heritage and the broadcasting portfolio share a common agenda with TVNZ in regard to the Charter. As Fraser (2004) acknowledges, “There is a government interest in seeing a vindication of the Charter. I happen to share that view.” Frewen (2003a) is less sanguine about such mutual interest:

“When they talk about the Charter turning TVNZ into a public service broadcaster, the government, the board and the chief executive all sing the same tune. Although they claim that the broadcaster is fiercely independent of the government, in reality, it’s responsible for implementing the Labour Party’s incredibly muddled broadcasting policy. It is not going to criticise the policy. Nor is the government going to criticise the broadcaster. For either to do so would be an admission of failure. It’s a very cosy arrangement.”

Any mutual interest between certain government ministries and TVNZ is never

simple, however. They are different institutions with different priorities, and anecdotal comments from both government and TVNZ suggest that there both convergences and divergences of agenda. The danger of a mutual tolerance and reinforcement of a commercially–heavy balance of TVNZ’s dual remit is that it could legitimate and institutionalise an impoverished conception of public service (specifically, the version which restricts Charter implementation to the commercial mainstream and renders risky or limited-appeal ventures peripheral or non-viable).

TVNZ and the government are both aware that the current Charter subsidy is

inadequate to address the full range of public service objectives, but public (and political) support needs to be fostered in order to justify any increase in expenditure xxvi. This is a difficult challenge because, as Fraser (2004) points out, there is a risk of a “Mexican stand-off” whereby TVNZ proposes initiatives contingent on government funding while the government withholds funding until there is evidence of successful

implementation. To circumvent this scenario, Fraser has outlined a commitment by TVNZ to increase its proportion of local content from 34% to 50% across both channels by 2008 xxvii. TVNZ does not currently have the financial capacity to complete this initiative. However, the strategy is to commit its existing resources to making a publicly-visible and measurable difference to the schedule, thereby providing the government with a legitimate pretext to change the broadcasting funding mechanisms and provide TVNZ with the higher level of public subsidy xxviii needed to attain the 50% target. As Fraser (2004) acknowledges;

“For the first year, it will be done on the basis of our investment… [But] it will only be achievable if we get to a different funding model for public broadcasting and television… We will only be able to achieve the goal in the fourth year with extra funding from public sources. It presupposes a rebalancing, not just in TVNZ’s own budgets and investment policies, but at government level. Right now we get around 10% of our revenue from government sources- either direct Charter funding or from New Zealand On Air. There is no question that the balance will need to be tilted more towards public funding if we are to achieve this target.”

This is certainly a bold initiative, and it indicates a shrewd appreciation of way in

which the space for favourable ministerial policy manoeuvring has to be negotiated. However, there are several potential limitations to TVNZ’s cunning plan. For a start, the government could interpret any initial progress to be indicative of TVNZ’s capacity to implement Charter plans without additional funding. The concentration on local content could also be problematic: On the one hand, local production per se is no guarantee of high quality or public service; on the other hand, the emphasis on local content could refocus Charter initiatives so that they become indistinguishable from NZ On Air’s own function xxix (despite the Charter subsidy being intended for purposes not covered by NZ on Air). Meanwhile, the need to maintain public support for increased local content demands that this programming have strong audience appeal, which would limit both risk-taking and attention to specialist/minority interests. Finally, if the next government is National-led, it is unlikely to be sympathetic to the existing funding, let alone any additional Charter subsidies.

Interpretations of how a satisfactory balance between TVNZ’s dual commercial/

public service remit might be found are contested. Consequently, there is pressure to legitimate the Charter among different political, institutional and public interests. TVNZ needs to simultaneously differentiate itself from its commercial rivals while maintaining audience levels and profitability. Its response to that challenge is twofold: Firstly, to emphasise those Charter objectives compatible with audience retention; secondly, to generate measurable increases in local programming and thereby encourage the government to increase (or redirect) funding for television production in TVNZ’s favour. Under the circumstances, TVNZ’s plans are a rational response to contradictory political-economic imperatives and normative expectations. What eventually transpires will depend largely on whether future government policy underpins or undermines TVNZ’s structural position in the evolving television sector.

Conclusions: conjectures and refutations Examples of overseas broadcasters, notably RTE, have been cited by the

government and TVNZ as evidence that a dual commercial/public service remit is potentially workable. However, apart from important institutional differences in history and the level of public funding xxx, a key factor which has sometimes been under-recognised in New Zealand discourse on broadcasting is the way in which

broadcasting institutions are structurally inter-related and mutually constitute each other’s context of operation.

There is perhaps a tacit acknowledgement of this in the Charter requirement to set

standards of programme quality and encourage risk taking. The premise here is that the establishment of a television broadcaster committed to public service principles will help to set benchmarks and cultivate audience expectations so as to oblige the commercial sector to uphold their own content standards. Historically, this “anchoring” has been an important function of the BBC in the UK television sector (Graham & Davies, 1997). As former Channel Four director of programmes, Tim Gardam (2003) points out, the BBC’s public service operation in the UK television sector helped to create the environment in which Channel Four’s complementary public service remit was able to succeed xxxi.

Apart from the two public service institutions, the commercial ITV network also

accepted a broad ethos of social responsibility, creating a sector that, crucially, competed for programme quality, not just advertiser revenue. However, the advent of new media technologies and the proliferation of commercial competition means that no broadcaster can take the capture of a critical mass of the audience for granted (Graham & Davies, 1997; Gardam, 2003), resulting in an intensification of competition for ratings. Accordingly, there has been criticism of the mainstream broadcasters as well as Channel Four for their increasingly commercial orientation (see Born, 2003).

The prospects of a dual-remit TVNZ facilitating a structural correction to a

commercial New Zealand television sector geared to “underperformance” (Hobbs, 2000) seem highly remote. For a start, the TVNZ Charter covers a range of public service functions which require two complementary institutions in the UK. Yet TVNZ’s dual remit mean that it can emulate neither the BBC nor Channel 4, let alone both. TVNZ’s audience share makes it the incumbent, but the programming standards which the Charter seeks to promote still have to be realised before TVNZ could set any meaningful quality benchmarks capable of influencing CanWest and Sky. On the contrary, as Edwards (2003) has suggested, insofar as TVNZ has influenced its rivals, it was in setting the standard for commercial performance. For TVNZ to now become a benchmark for public service provision, it must produce new formats/genres of programming without losing its mainstream audience to the competition. While NZ On Air supports local productions which might otherwise be non-viable, its lack of vertical integration means its current outlets remain the mainstream broadcasters, whose limited scope for misjudging programme appeal without threatening viability inhibits a greater diversity of content. Meanwhile, the new Maori Television Service may help ensure the provision of content for this special interest, but whether it will bring Maori issues to the attention of the broader audience remains to be seen.

Thus Labour’s conception of a “mixed economy” of broadcasting is somewhat less

diverse in its institutional composition than is evident in other countries. This is consistent with its ‘third way’ philosophy which presumes a compatibility between commercial and cultural-democratic principles and policies and a convergence between the interests of capital and civil society. While the market failures of commercial broadcasting and the desirability of public service are acknowledged, the policies that have been developed reflect the deeper tensions between respective ministerial priorities and agendas. Inhibited from intervention in the private sector and convinced that a dedicated public service television channel is both politically and economically unaffordable, government policy discourse has sometimes attempted to frame commercial necessities as public virtues rather than vice-versa.

The TVNZ Charter is a bold restatement of public service values, and insofar as

this has helped to reframe and expand both the public’s and the broadcasting industry’s notion of how television could- and should- function, it has represents an important shift away from the neoliberal ideology which informed broadcasting policy throughout the 1990s. The fact that the government has initiated further debate on broadcasting principles is progressive irrespective of the criticism of its policies to date. Criticism is nevertheless necessary, because the move away from neoliberal discourse has not yet been matched by a commensurate shift in actual policy commitments.

Two key issues stand out in this regard. Firstly, the government has studiously

ignored any direct intervention in the private sector (including telecommunications), preferring to support voluntary regulations which are inconsistent, non-binding, and liable to be ignored as soon as social responsibility fails to coincide with shareholder interests. There appears to be no change from the 1990s in this regard. Secondly, the range of obligations specified by the Charter have not been accompanied by a commensurate level of funding, requiring TVNZ to walk a political tightrope. It has to be seen to make a genuine effort to fulfill Charter requirements, but it must do so in a way that avoids any significant risk to audience appeal and profits. The principal factor determining whether public service criteria can be integrated into programming decisions is the degree of insulation from then pressure to maximise ratings and revenue. TVNZ’s dual remit compromises this, and indeed, serves to increase the political pressure to legitimate the Charter through sustained ratings and revenue. Ironically, this serves to intensify the very commercial imperatives which the Charter was intended to redress. Moreover, even supposing the government finds the political will to provide more Charter money, the funding mechanisms have not been “ringfenced”. Apart from the fact that this makes the broadcaster dependent on the goodwill of the government, there is no guarantee that any future government will continue to provide such funds. It is in the context of these shortcomings that TVNZ’s response to its dual remit must be understood.

Fraser and Maharey are right to point out that many types of programme would be

compatible with both Charter directives and commercial requirements. However, this may exclude content initiatives considered to be of unproven appeal or for minority interests (or at least relegate them to obscure slots in the schedule). If the “blueprint” approach obscures any distinction between commercial and public service programming, then evaluating how effectively the Charter side of the remit is fulfilled will be problematic. Progress could be claimed without significant change, and amidst fractious argument over quality, allegations of underperformance would be impossible to demonstrate. In such a context, the focus of policy debate would most likely default to ratings.

While the overall schedule does have to be taken into consideration, there are

nevertheless specific decisions about content production/commissioning and scheduling which require the relative priority of commercial and Charter principles to be made explicit. For instance, given a choice between funding an hour of local content and purchasing a foreign equivalent of similar audience appeal for a fraction of the price, the respective principles do not synthesise in practice; on the contrary, they dictate that a choice be made between them.

The complexity of the political-economic balancing act facing Fraser thus becomes

apparent. Regardless of whether TVNZ now has an internal affinity with the Charter, the opportunity cost of pursuing a full range of public service objectives requires

insulation from the obligation to maintain commercial performance. Given that TVNZ has neither the resources nor the remit to meet all the Charter objectives, the consequent prioritisation will be largely dictated by the commercial side of its remit. The result will likely be a broadcaster that may well embrace some sense of social responsibility and a commitment to Charter principles, but pursue them within the parameters of commercially viability. Indeed, it on those terms that TVNZ and the government are seeking to rationalise and justify the Charter. The danger, therefore, is that at the same time as some notion of public broadcasting is relegitimated within government and the broadcasting sector, TVNZ’s challenge of balancing its dual remit could institutionalise an overly-pragmatic and impoverished conception. In other words, New Zealand could end up with an improved commercial version of TVNZ which aims to produce content appealing to the highest common factor rather than the lowest common denominator; a welcome change, perhaps, but this ultimately falls short of full public service provision.

The plan to increase the proportion of local content to 50% by 2008 will promote

measurable progress of a kind as well as helping to justify appeals for additional government support. It is a major undertaking, and if it succeeds in its aims, perhaps TVNZ will have a more realistic chance of demonstrating that some kind of balance is workable. It also has potential drawbacks, though. A sharp increase in local content might help differentiate TVNZ from its commercial rivals, but it may also draw charter initiatives more into overlap with NZ On Air’s function. Irrespective of whatever other measures are considered, a focus on local content cannot circumvent the imperative to ensure optimum ratings. The need to legitimate Charter initiatives through sustained popular appeal and profits means that ratings remain the criterion of default in programming decisions. The Charter initiatives are therefore liable to be subordinated to the commercial limitations they are intended to avoid. As Glen Sowry (2003) poignantly remarked, “Ultimately the measure of success will be ratings and viewer feedback.”

If a meaningful notion of public service can be politically legitimated and public

attitudes come to accept (and expect) continuing state subsidies to enhance the quality of broadcasting in New Zealand, this would be the best insulation against commercial subversion. The difficulty is that this could take several government terms to achieve, and other political and economic constraints could undermine the Charter initiatives before then. Thus he problem with television in New Zealand may well remain one of underperformance, but not with TVNZ itself, nor solely with the broadcasting system per se. Political policies are not formulated and implemented in a vacuum, and a range of vested interests in the polity and economy have circumscribed and inhibited many alternative options.

In the meantime, if the government continues to pretend that it is funding the Charter, one cannot blame TVNZ for pretending to implement it. There are two quotations at the beginning of this article, Fraser’s cautiously optimistic, Weizenbaum’s deeply pessimistic. If the challenge for Fraser is to balance TVNZ’s respective renderings unto God and Caesar, his task is made more difficult by government ambivalence about rendering unto TVNZ. Without more specific financial commitments to support specific types of institutional and content outcomes, it will be difficult to escape Weizenbaum’s bleak conclusions. TVNZ has the opportunity to make broadcasting history, but it will have to do so under conditions not of its own choosing.

Post Script

Since the above article was written, some further developments

concerning TVNZ are worthy of note. After the publication of TVNZ’s latest annual report in October 2004, it transpired that the Treasury had been allocated $37.6 million in dividends; more than double the $16million subsidy for the Charter. Despite previous claims that the government had accepted a discontinuation of any substantial dividend payment, Ian Fraser has since protested that TVNZ is “on a money- go- round” (NZ Herald, 13.10.04), insisting that the dividend ought to be waived so as to permit more investment in Charter content. Michael Cullen and Steve Maharey flatly rejected this claim, instead reiterating that while the dividend would be reviewed, it would not be discontinued. More recently, howev er, the government has relented somewhat and agreed to return $11 million of the $37.6 million dividend to TVNZ (Offices of the Ministers for Finance and Broadcasting, 2004). Nevertheless, the government’s net contribution to the Charter remains negative and the process for determining dividend payments remains far from transparent. It is also interesting to note that in TVNZ’s 2004 Annual Report, many of the programmes listed as having been made with Charter funds are also listed as having received NZ On Air money. That suggests that the original rationale for providing a direct Charter subsidy (i.e. to enable TVNZ to extend its range of content beyond both the commercial norm and- crucially- the scope of programming eligible for NZ On Air funding) has been either abandoned or expediently subverted. Given TVNZ’s strategic emphasis on local content, there is therefore a potential risk that Charter functions might be conflated with those of NZ On Air.

Bill Ralston, meanwhile, has announced the establishment of a new investigative journalism unit to enhance TVNZ’s News & Current Affairs. TVNZ has also broadcast (albeit with a conspicuous absence of publicity) Alister Barry’s long-awaited critical documentaries on the Rogernomics era. The most significant recent development was the announcement that Paul Holmes was leaving TVNZ to join Prime TV after declining a new one-year contract (NZ Herald, 09.11.04 a). Despite official expressions of regret, Fraser and Ralston had refused to countenance a longer extension (NZ Herald 09.11.04 b) and it was rumoured that the contract involved a reduced salary offer. Thus insofar as TVNZ effectively made Holmes an offer he couldn’t accept, it seems that his departure was expedited as part of an on-going strategy to improve the evening current affairs content. Given the commercial success of the “Holmes” show, its replacement by a new current affairs programme, “Close Up” is a important initiative. Although the latter’s current format remains essentially identical to its predecessor, it is anticipated that more noticable changes will be made by 2005.

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Acknowledgements

The author would like to thank all of the above persons for their time and knowledge. He would also like to thank Ed Mason and Wayne Hope for their collegial support and comments on various issues discussed in this article, Barbara Cairns and Graham Murdock for their interest and encouragement, and the editors/referees of the Communication Journal of New Zealand- Te Hinga Kōorero for their feedback and patience.

Peter Thompson School of Communication Unitec New Zealand Private Bag 92025 Auckland Ph. +64 9 8154321 x 8804 pthompson@unitec.ac.nz

i In the British context people of Indian, Punjabi or Pakistani descent are referred to as ‘Asian’, and it was that descriptor which has been used in previous publications reporting on this research (Schlesinger et al., 1992 & 2003). However, because the term ‘Asian’ carries a different meaning in the New Zealand context – referring to people from the Asian continent – in this paper I identify the women in terms of whether they were Indian or Pakistani. ii Office of the Minister of Broadcasting. (2000 ). Broadcasting Policy: Objectives and Delivery Mechanisms. Wellington: New Zealand House of Representatives. Office of the Minister of Broadcasting. (2000). Broadcasting Issues: Introductory Paper: Platform and Technology Issues. Wellington: New Zealand House of Representatives. Ministerial Inquiry into Telecommunications (2000). Final Report. 27 September. Wellington. iii CCMAU is the Crown Company Monitoring and Advisory Unit, a Treasury-influenced committee overseeing the commercial activities of state-owned enterprises and other crown entities. iv The Channel 4 model refers to the television station in the UK which was originally established to provide non-mainstream programming funded through a levy on the main commercial stations. Channel 4 carried advertising, but the revenue from this went to compensate the commercial stations. Importantly, because Channel 4’s funding was stable, it could afford to insulate programming decisions from considerations of audience ratings, allowing it the freedom to innovate and commission independent content which would have been considered too risky or unprofitable for mainstream television. This structure became a victim of its own success when Channel 4’s growing ratings (and resentment from the commercial stations forced to subsidise a rival channel) persuaded the government to restructure it as a stand-alone commercial station. v For a useful overview of some alternative broadcasting policy suggestions, see Joe Atkinson’s article, “Putting it Right”. In: NZ Political Review. November 2000. pp.14-17. vi Although TVNZ subsequently signed an MOU to develop digital TV services with Telstra-Clear (which was developing a broadband cable network) it became apparent that direct competition with Sky using different technical standards and STB equipment was not economically viable. TVNZ has since had to negotiate inclusion of its channels on Sky’s signal. While Sky is currently happy to oblige, there is no guarantee that this arrangement will continue indefinitely. vii “CanWest will quit over quotas” NZ Herald 10.11.01. There are a number of other factors to consider here. Firstly, Canwest’s TV operations have been consistently unprofitable, although TV3 recently made a surplus. Consequently, the parent corporation had been considering whether a sell-off of NZ assets might off-set the costs of acquiring Conrad Black’s Canadian press business, irrespective of quotas. viii While a voluntary quota system has now been negotiated in both the television and radio sectors, different broadcasters are permitted to commit to different levels. While the government has praised this apparent commitment to social responsibility, the agreements are not binding, and the inclusion of more local content remains contingent on its commercial viability. ix The theoretical grounding for “Third Way” philosophy stems from the work of UK social theorist Anthony Giddens, e.g. see Giddens, A. (2000). The Third Way and its Critics. Cambridge: Polity Press. For useful material about its relevance to New Zealand, see Eichbaum, C., S. Chatterjee. et al. (1999). The New Politics: a Third Way for New Zealand. Palmerstone North: Dunmore Press. x Most significantly, Roseanne Meo was replaced by Ross Armstrong as Chair of the TVNZ Board, Rick Ellis by Ian Fraser as CEO, and Paul Cutler by Heaton Dyer as head of news and current affairs. Armstrong subsequently resigned in the midst of a political scandal, being replaced by Craig Boyce. Dyer also resigned later, being replaced by Bill Ralston. . xi Horrocks (2002) usefully points out that the notion of “commercial” broadcasting is also contested, for instance in the sense that it can refer to a for-profit operation or to a populist style of programming. However, the Treasury’s notion of commercial performance is unambiguous, so the issue will not be debated further here. xii Rennie’s comment is somewhat ironic, since he was a key figure behind TVNZ’s transformation into a commercial SOE. xiii Glen Sowry, head of public affairs, also left TVNZ later in 2003. xiv The NZ Herald (01.02.03) cites TVNZ sources suggesting that Cutler had been frustrated by internal political struggles in TVNZ. http://www.nzherald.co.nz/storyprint.cfm?storyID=3099013 (viewed 12.03 04). xv Ministerial Briefings 2002- Arts Culture and Leisure. Appendix VI: TVNZ. Interestingly, the same section goes on to note that, “The Ministry does not have primary responsibility for assisting Ministers in their oversight of TVNZ. This function rests with the Crown Company Monitoring Advisory Unit (CCMAU), which will separately advise Ministers on the overall governance and performance of TVNZ. CCMAU retains this responsibility from the period when TVNZ was a State Owned Enterprise with commercial objectives as the sole basis for continue government ownership of the company” (sic). Thus the Treasury bureaucrats will still have a significant role in overseeing TVNZ’s implementation of the charter. xvi Labour’s second-term partner, United Future, refused to support the original TVNZ Bill on that basis. xvii TVNZ management deny that BCL’s profits would be appropriated for programming costs (Private correspondence, March 2003). Nevertheless, it is apparent that the loss of BCL represents a significant loss of revenue for TVNZ as a whole, since BCL generated a profit of around $14m in 2002-3.

xviii Fraser (2004) strongly rejects the criticism that TVNZ is planning to bring more and more programming “in house”, and says the argument is “as stupid as it is self-serving ”, since TVNZ’s role is largely that of a publisher and its plans to increase local content would mean an even greater involvement of the independent programme makers. However, this does not guarantee that that involvement would not be restricted to the production of content amenable to TVNZ’s schedulers. Some smaller independent producers remain concerned that such a move might benefit the larger independent production businesses who have higher profiles and better-established relationships with TVNZ. xix Interestingly, the TVNZ 2004 Statement of Intent notes that Charter money would not be allocated to news and current affairs. As Fraser explained, this was to avoid any allegation that there could be any political influence in this critical genre. There is an irony here because, as Peacock (2003a) suggests, the existence of commercially sponsored news entails a far more obvious risk of compromising editorial independence. xx It is interesting to note that while TVNZ has acquired the rights to Alister Barry’s critical documentaries on Rogernomics, Barry is now considering buying them back to allow screening on Triangle or the new Maori TV Service. Specifically, he fears that TVNZ will be inhibited from using them because they are critical of Don Brash’s policies, and would therefore invite criticism of TVNZ’s apparent lack of political balance now that he is National Party leader. (Barry, 2004). xxi In these cases, NZ On Air might justifiably claim that its funding makes it easier for broadcasters to take chances with new formats that subsequently prove successful. However, the producers have a better chance of persuading broadcasters to accept familiar genres and formats. There have also been cases where the broadcasters themselves have requested money for programmes that were ostensibly not commercially viable, and when turned down, funded them anyway. xxii Note, however, that the maintenance of audience share could equally be interpreted as the continuation of an entirely commercialised and risk-averse approach to programming. xxiii In the current environment where public expenditure on Maori interests is being closely scrutinised, there may a risk that if the newly operational Maori TV Service is embroiled in any financial scandals akin to its unfortunate predecessor, Aotearoa TV, then the political right might use that as a pretext to attack all public spending on broadcasting initiatives. xxiv The NZ Herald (11.10.03) notes that TV3’s ratings have increased by 2% since 2000 and blames the TVNZ decline on the Charter.

xxv Ironically, it is arguably it because of the recent resurgence of National and the prospect of the next government being hostile to the Charter and public broadcasting that the pressure on TVNZ to accelerate Charter implementation has intensified.

xxvi As Peacock (2003b) notes, TVNZ spent heavily ($25m) to acquire exclusive rights to the rugby world cup. Although it was not able to schedule air-time for all the games, TVNZ refused offers from Sky to buy the rights even to the games it was unable to screen, despite lower-than-anticipated ratings and revenue. This can be explained partly as retaliation for Sky’s controversial sale of domestic rugby rebroadcasting rights to TV3, but primarily as an attempt to foster public approval by exclusive provision of free-to-air world cup rugby which would then be conspicuously absent from its rivals’ schedules. How far this fulfils any Charter objective is debatable. It makes a national sporting event available to the public irrespective of ability to pay, but it also reflects commercial aggression on TVNZ’s part. xxvii Fraser (2004) notes that a 1% increase in local content requires 100 hours of programming. xxviii This is very similar to the strategy used by RTE to persuade the Irish government to increase the licence fee. xxix Given Fraser’s view that TVNZ should be allocated all the NZ On Air funding for television, this might conceivably be a deliberate tactic. However, it could backfire if the Charter’s legitimacy came to depend primarily on local content provision, because insofar as that might be a reason to give TVNZ all the NZ On Air money, it would be an equally valid pretext for allocating the Charter money to NZ On Air. xxx Even during its lowest period of public funding, RTE received proportionally over three times more than the total TVNZ currently receives from the NZ government. xxxi Channel Four’s revenue originally came from a levy ion the mainstream commercial stations who in turn were allowed to sell Channel Four’s advertising. It is now funded entirely by sales of its own advertising, but as Gardam (2003) points out, the fact that it pays no dividend to shareholders allows it to take the requisite commercial risks to fulfill its statutory obligation to complement the commercial mainstream.