Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Up to six years for Igloo to breakeven: TVNZ

TVNZ, Sky TV to wait up to 6 years for Igloo to breakeven, state broadcaster says

By Paul McBeth

April 3 (BusinessDesk) - Television New Zealand and Sky Network Television may have to wait up to six years before their Igloo budget pay-TV service gets into the black, according to the state-owned broadcaster.

The Auckland-based broadcaster doesn't have any specific sales targets for the first 12 months, and Igloo will take "a number of years to build a subscriber base and to reach a breakeven position," TVNZ said in a written answer to Parliament's commerce select committee.

"We recognise it could (be) anywhere between 4-6 years for the business to breakeven," TVNZ said.

The state-owned broadcaster stumped up $12.3 million for a 49 percent share in the joint venture with Sky TV in a bid to broaden its revenue streams, and has recognised losses of $2.2 million, according to its first half report.

Igloo was slated for a July 2012 launch, though that was delayed until December. Before the delay, partner Sky TV was expecting to have 50,000 subscribers by June 30 this year, though that's since been pared back with chief executive John Fellet telling NBR that Igloo could attract 30,000.

TVNZ told the committee that pay-TV opens up the broadcaster to "consumer paid for content" and is part of a wider move to cut reliance on advertising revenue.

The drive to find new revenue streams comes as the broadcaster is under greater pressure from the government to maintain its return.

In a Dec. 20 letter, Broadcasting Minister Craig Foss told chairman Wayne Walden the government expects at least a 9 percent return on average equity over the next three years, and wants TVNZ to change its dividend policy to a proportion of cash flow rather than net profit.

The broadcaster's existing dividend policy is to pay 70 percent of forecast net profit, and it's targeting a $9.8 million return from the 2013 financial year. The broadcaster's net profit dropped 26 percent to $14.2 million in the final six months of 2012.

TVNZ's operating cash flow shrank to $13.7 million in the six months ended Dec. 31 from $31.8 million, with much of that from reduced government funding. There was a net increase of $3.2 million in the six month period, leaving TVNZ with cash and equivalents of $8.5 million as at Dec. 31.

The broadcaster has scope to take on more debt with $10 million in borrowings amounting to a gearing ratio of just 6 percent, well below its upper cap of 40 percent flagged in its 2013 statement of intent.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news