Mega-merger challenges

Radio NZ reports:

The fate of RNZ and TVNZ may soon be in the hands of Cabinet ministers, with a proposal to disestablish both broadcasters and create an entirely new public media entity.

In principle this could be a good thing. But there are significant challenges.

The advisory group concluded the status quo was “unsustainable” and “collectively recommended the government agree to disestablish TVNZ and RNZ and to establish a new public media entity”.

There are guidelines for how it would operate, including having a “clearly defined public media mandate and purpose, with the core functions of a globally recognised public media entity”.

It would provide public media services across a variety of platforms, “some of which may be advertising free”. TVNZ earns revenue from advertising but RNZ is commercial free.

The new entity would have a “mixed funding model” that would be funded both directly from the Crown, and from a range of “non-Crown” sources including advertising, sponsorship and subscriptions.

This is unlikely to work. Such a model has been tried in the past with TVNZ and failed. You can be a public broadcaster or a commercial broadcaster, but not both. If the broadcaster is reliant on commercial revenue, it will act commercially.

It would operate as a not-for-profit, and would have “statutory protection for and operational independence”.

You need more than statutory protection. That merely means can direct. But would appoint the Board? Ministers! Who would decide its funding? Ministers!

If you’re to go down this path then you would need board appointments to be made only with the agreement of the Opposition. Also it would need funding independence such as a formula 0.05% of GDP ($150 million a year currently) so that parties can’t curry favour by promising more money.

All of this is happening against the backdrop of a commercial media industry struggling with diminishing revenues which are haemorrhaging advertising dollars to online giants Google and Facebook. That in itself presents a problem in a democracy – how to fund a robust news media.

Commercial players have been loudly critical of the current model and what they describe as a “polluted” and unfair playing ground.

It is quite likely this proposal would wipe out TV3. It would also mean just one newsroom replacing TVNZ and so you’d end up with one government funded newsroom dominating the NZ media industry.

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