22 May 2022

Public media's future funding made public - partly

From Mediawatch, 9:09 am on 22 May 2022

After months of behind-closed-doors planning, Budget 2022 has at last put some fresh figures for the government's planned public media entity into the public domain. The increase in public funding is substantial, but the precise mix of commercial and public revenue is still unclear - as is the future beyond 2026.  

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Photo: RNZ / Samuel Rillstone

Back in February, the government finally confirmed it had decided to create a new not-for-profit public media entity (PME) to incorporate RNZ and TVNZ - and then replace them - by 2023.

Not-for-profit is not the same thing as non-commercial - and one big unanswered question so far has been: just how much will the new entity have to hustle for advertising to still break even? 

A heavy dependence on commercial revenue could compromise the public service mission set out in the charter for the PME which is due to be enshrined in new legislation later this year. 

This week Budget 2022 revealed the PME will get $327 million from the public purse in its first three years from 2023. The government heralded this as ‘Funding Certainty For Quality Public Media.’ 

It is a lot more than public media gets from the public purse at the moment - the biggest money boost by far for public broadcasting in decades.   

RNZ currently gets around $48m a year in public funding. TVNZ currently makes around about $300m a year in TV and digital advertising and some of the costs of the local programmes it screens are covered by public funding via NZ on Air.  

The balance of public and commercial money bankrolling the new entity from next year was still not clear in the new funding announcement. 

Broadcasting and Media Minister Kris Faafoi declined to be interviewed on Mediawatch this week but his office told us in a statement the government will provide around $200m a year - about half of the entity’s estimated operating budget - in the first three years.  

The $109m a year until 2026 just announced in Budget 2022 is in addition to $51m per year that currently goes to RNZ, TVNZ and Parliamentary Services. 

How the balance of existing funding will be provided  - about $40m per year - will be decided in Budget 2023, according to the minister’s office statement. (That sum is roughly the amount of public money NZ On Air currently commits each year to programmes and content for TVNZ outlets.)    

But the fine print in Budget 2022 estimates the new PME could make a surplus of $306m over its first six years.  That’s about $50m a year on average - a lot more than any profit TVNZ has returned to the Crown in recent years.

So does that mean public funding will fall if that revenue is forthcoming? 

The minister’s office told Mediawatch the new entity’s precise financial model will be finalised as it gets established. It had to estimate the surplus the new entity might make over its first six years for Budget 2022, but said it expects the entity will make significant commercial revenue in coming years. 

Another unknown is how much public money the government broadcasting funding agency NZ on Air will put into the mix. 

The Budget 2022 estimates for the Arts, Culture and Heritage vote show NZ on Air’s appropriation reducing in 2023 to $169m, down from $181m this year. (NZ on Air also allocates the Public Interest Journalism Fund, a government fund providing $55m to media over three years ending in 2023.)     

That could be a sign of things to come if the new public media entity is expected to use the fresh funds from 2023 on to cover the costs of local programmes - rather than seek to source NZ On Air's contestable funds for productions.

Responses to the Budget boost  

TVNZ chief executive Simon Power was not available for interview because of overseas travel.

TVNZ provided a statement in which he said: "This is useful signposting that provides certainty over one aspect of the new entity’s funding."

He also said TVNZ would carry on producing local content in the meantime and providing "an essential platform for businesses to reach their customers through advertising".

RNZ chief executive and editor-in-chief Paul Thompson said the Budget announcement was “an important step towards a well-resourced and viable public broadcaster”.

The Better Public Media Trust - which campaigns for non-commerical public broadcasting - welcomed the Budget 2022 commitment as “a significant statement of intent” . 

“Public funding has too often been the stumbling block of well-intentioned public media initiatives in Aotearoa New Zealand,” chair Myles Thomas said.

“One of the key challenges ... is the need to ensure that TVNZ’s reliance on commercial revenue would not override the public service priorities of the new entity,” Thomas said.

“Although the public funding still falls short of the levels received by comparable public media platforms, such as RTÉ in Ireland which receives more than half its funds from a licence fee, the new funding is far higher than that provided for the unsuccessful TVNZ Charter model of 2003.

“But if the new entity cannot access NZ On Air contestable funding, any increase in funding will be negated,” Thomas warned. 

“There is no guarantee that the Budget commitments up to 2026 will survive the next election. Without sustainable, long-term funding, such as through a ringfenced levy, the future remains uncertain. If public funding were to go the same way as the TVNZ Charter, it could drag RNZ down with it,” he said.