Broadcasting Minister Kris Faafoi has confirmed work will begin on a business case for creating a new, super-sized public broadcaster, reported by RNZ last month.
Watch live: Broadcasting Minister Kris Faafoi speaks at the NZ Broadcasting School in Christchurch
Faafoi was making the announcement at the New Zealand Broadcasting School in Christchurch.
He said Cabinet has approved a business case to examine the viability of establishing a new public media entity as an independent multiple-platform, multi-media operation.
The new entity would receive a mixture of both government funding and advertising.
But Faafoi added commercial-free platforms would remain commercial free.
"A core feature of the proposal is that New Zealand on Air will continue to administer a contestable fund to ensure diverse public media content is provided on a range of platforms, as they have done for the last 30 years," he said.
When asked about the impact the proposal would have on the commercial market, Faafoi said he would need to wait for the business case.
"I've spoken to other commercial broadcasters who have long been concerned about the likes of TVNZ's dominance in the advertising sphere and when we come back later this year and make a decision, we will have a clearer idea, because it will be informed by the business case," he said.
Final decisions about the future of RNZ and TVNZ will be made once the business case is completed.
"The government must ensure New Zealanders have a strong independent public media service for decades to come, which means ensuring public media assets are fit for the future and able to thrive amid the changing media landscape," Faafoi said today.
"It's well known that New Zealand's media sector, both public and private, is facing unprecedented challenges with competition from the likes of Google and Facebook, declining revenue shares, and changes in when and how audiences access their information and entertainment.
"That presents risks for the future viability of New Zealand's public broadcasting operators, RNZ and TVNZ, and the government needs to address those risks," Faafoi said.
Faafoi said he wanted the new entity to be more nimble and designed for a digital 21st century environment.
"One example is the different platforms that are popping up all the time that have the ability to deliver to different audiences.
"We have seen the likes of Radio New Zealand try and do things like that, but funding constraints, or because they have traditionally been a radio company may have hamstrung them, [but] a larger scale, nimble public broadcaster I hope would be able to do that," he said.
He said PricewaterhouseCoopers will conduct the business case, and it is expected to report back by the middle of this year.
New Zealand First broadcasting spokesperson Jenny Marcroft said her party supports the decision to commission a business case.
"We need to see what the options are, the design and cost, and the likely timeframes.
"As a former broadcaster myself, I understand that the currency of the media is trust, and New Zealand deserves a media voice that can be trusted, and is independent and fearless.
"In a media environment that is increasingly dominated by digital platforms, and people receiving their news from dubious sources. It is clear that the future of organisations such as TVNZ and RNZ are preserved", Marcroft said.
In the lead up to the election, the National Party has already made clear it does not support the idea of having one big public broadcaster.
The National Party's Broadcasting, Communications and Digital Media spokesperson Melissa Lee criticised the Government for leaving the future of public broadcasting in a state of uncertainty.
"There is no plan still, this is almost three years down the line [and] we are no clearer as to what they are going to do," she said.
Lee was also unhappy with what was known about the proposal so far.
"We want plurality of voice in the media space and anything that reduces that voice is something we would be very concerned about," she said.
Faafoi said the future of RNZ and TVNZ will become a political football whether the Government liked it or not.
"We sat and watched for nine years when TVNZ 6 and 7 were shut down and funding was frozen and if they don't like what we've got,then what have they got?," he said.
Meanwhile the minister said he has spoken with RNZ's decision to cut back investment for its Concert station, instead investing on more youth programming.
"Lets just say there has been a fair bit of feedback over the last 48 hours, some of it has been directed to me and some of it has been directed to Radio New Zealand, we've outlined some concerns to them last week and we are working on it," he said.
Last month RNZ reported that it understood Faafoi's original plan presented to Cabinet in December was to prepare legislation under urgency to disestablish RNZ and TVNZ, and then proceed with a business plan later this year.
However, RNZ understands Faafoi was told to go back and do more work on the original plan.
RNZ also reported last month that the amended proposal puts a specific emphasis on the fact the new company will be primarily a public service media outlet, and to ensure that is made crystal clear in any legislation, and through a charter.
That would also help to alleviate some of the strongly expressed concerns some ministers had about a "culture clash" - namely the risk the public broadcasting ethos could be subsumed by an aggressive commercial imperative once the new company was established and operating in the media marketplace.
As in the original proposal, the company would still have the ability to fund some of its operations through commercial or advertising revenue.
New Zealand stories must continue to be told - Faafoi
Faafoi told his audience that it was important that quintessentially New Zealand stories continue to be told.
He said a new structure could be nimble and fit-for-purpose with different platforms that can deliver to different audiences.
He said RNZ had tried to do this but because traditionally it has been a radio broadcaster it had been hamstrung. A bigger entity may be more nimble to tell the stories that need to be told and challenge the status quo of how content has been delivered traditionally, Faafoi said.
"It is vital that our media showcases our unique identity - and we celebrated that yesterday [on Waitangi Day]- and our culture and languages because foreign content simply can't do this for us."
There are constant challenges for public and commercial media to traverse at present and it was important to talk about how the government hoped to reshape the sector, he said.
"This is an opportunity to design an agile future-focused organisation that has a greater scale and is better-placed to meet audience expectations to access content when, where and how they want it both now and in the future."
It would draw on both the skills and expertise within RNZ and TVNZ but would be designed for a 21st-century environment.
It would enable greater scale and nimbleness to face current challenges such as changing platforms and changing audience habits.
RNZ and TVNZ would struggle to adapt to the challenges at present if they stayed in their current shape, he said.
NZ on Air would continue to provide funding as they have done for the last 30 years. Any new body would operate as a not-for-profit with a mix of both public and private revenue.
He said it was important to stress that current non-commercial platforms would continue to be commercial free.
"We need a voice of truth in media, the government is responsible for public media and we want to strengthen it as much as possible."
The sector needs more stability - commercial and public media need to be strong. "Holding people like me to account is extremely important."
It would be pre-empting the business case to comment on the possibility of fewer staff being employed at TVNZ and RNZ if a new entity is established, he said.
He said RNZ is finding it tough and advertising revenues for TVNZ "don't look great for the next three or four years".
Asked if the issue could become a political football with the election later this year and National saying they were opposed to the move, Faafoi said he would say to the National Party: "Where's the alternative?"
As far as taxing Facebook and Google more, the government was still waiting to see what is going to happen in Europe before Revenue Minister Stuart Nash makes any decision.
Faafoi said he was also looking at ways to mitigate some issues around Concert FM which RNZ announced this week would move to an AM platform. However, he wanted to stress that RNZ was an independent operator for any decisions like this.