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

 


TVNZ committed to Igloo despite hiccups

TVNZ committed to Igloo despite failing to meet subscription targets

By Suze Metherell

March 6 (BusinessDesk) – State-owned broadcaster Television New Zealand is committed to Igloo, its joint venture with pay-TV operator Sky Network Television, despite writing down its stake and missing subscription targets.

TVNZ chief executive Kevin Kenrick told Parliament’s commerce select committee the broadcaster anticipates it will be a longer wait of the Igloo joint venture to start making money, which was why the company wrote down the value of the investment last week. TVNZ had previously told the committee it expected Igloo would take between four and six years to breakeven. The broadcaster today said there were about 6,000 subscribers, short of the forecast 15,000.

“Entering into a pay-TV business is not for the faint hearted, there is a long period of investment,” Kenrick said. “The reason we’ve taken the impairment is because we think the indication is that it is going to take longer than what we originally thought for Igloo to be a profitable business.”

“A lot of these new technology businesses you’ve got to be in the long haul really for the results to come through,” he said.

TVNZ invested $12.25 million for a 49 percent share in Igloo in 2012, but reduced its shareholding size to 34 percent last year. The broadcaster recognised a $6.1 million impairment and loss from associates in the six months ended Dec. 31, saying it wrote down its remaining investment in Igloo due to the uncertainty of when future profits from the budget set-top box venture with Sky TV might be seen.

When asked whether TVNZ was repeating the same mistake it made with previous failed subscription service, TiVo, head of television Jeff Latch said TiVo probably failed “because it was using to some degree very old technology, so that was an investment that wasn’t well founded.”

“The decision to go into Igloo was the right one, as it does now give the company the opportunity to participate in a particular market segment that we’re not currently in,” Latch said.

TVNZ affirmed it was on track to reach its 2014 financial year guidance of $16.8 million, and said it was continuing to look for expansion opportunities as it competed in an increasingly “dynamic” market.

In September last year SkyCity Entertainment Group bought prime real estate from TVNZ for $10.6 million. The Auckland land deal saw TVNZ sell off its Hobson St sites which sit directly opposite land already owned by the casino operator.

In tandem with the SkyCity deal, the broadcaster reached an agreement with government last year for a dividend relief to cover refurbishment costs of its main Auckland building on Victoria St West.

Kenrick would not be drawn on what the refurbishments will cost the company, saying he expected that once completed it would reduce maintenance costs.

TVNZ management was questioned over an internal investigation into the use of its building for political meetings by former general manager of Maori and Pacific programmes Shane Taurima, who unsuccessfully sought the Labour Party’s candidacy for the Ikaroa-Rawhiti by-election last year.

Kenrick said he was “absolutely gutted” over the potential misuse of the resources.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

OceanaGold: Man Killed In Waihi Mine Accident

A 29-year-old man had died following a work place accident at OceanaGold mine, Waihi last night. The man was killed after the front end loader he was in rolled down a slope. The accident happened at approximately 6.30pm on Thursday night. More>>

ALSO:

Constructing Consent: Annual Housing Consents Highest In Over A Decade

More than 29,000 new homes gained building consent in the year to June 2016, up 16 percent from the previous June year, Statistics New Zealand said today. More>>

ALSO:

War Against Weevil For Future Peas: “No Peas, No Weevil” Ban Now In Place In Wairarapa

The Ministry for Primary Industries (MPI) has today placed a ban on growing peas within a specified area and placed controls on moving pea material (seed and untreated pea straw) within, in and out of this area for the next 2 years. More>>

ALSO:

Wood Producers: Crisis In New Zealand Log Supply

New Zealand wood processing leaders held a hui with senior government officials and political leaders in Whangarei yesterday to assess the acute log supply shortage to local mills in Northland. More>>

Consents And Taxes: Trustpower 'Very Disappointed' With Judgement

Trustpower is "very disappointed" with a Supreme Court ruling dismissing its bid to claim tax deductions on $17.7 million of project costs in a case closely watched by large-scale infrastructure developers. More>>

ALSO:

Fruitful Endeavours: Kiwifruit Exports Reach Record Levels

In June 2016, kiwifruit exports rose $105 million (47 percent) from June 2015 to reach $331 million, Statistics New Zealand said today. Overall, goods exports rose $109 million (2.6 percent) in June 2016 (to $4.3 billion). More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news