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

 


CORRECT: TVNZ committed to Igloo, misses targets

CORRECT: TVNZ committed to Igloo despite failing to meet subscription targets

(Fixes source of Igloo subscriptions in 2nd graph, adds Igloo impairment in 5th graph)

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. National Party MP Chris Tremain 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 of $4 million 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

 

Must Sell 20 Petrol Stations: Z Cleared To Buy Caltex Assets

Z Energy is allowed to buy the Caltex and Challenge! petrol station chains but must sell 19 of its retail sites and one truck-stop, the Commerce Commission has ruled in a split decision that acknowledges possible retail price coordination between fuel retailers occurs in some regions. More>>

ALSO:

Huntly: Genesis Extends Life Of Coal-Fuelled Power Station To 2022

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they'd be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up. More>>

ALSO:

Dammed If You Do: Ruataniwha Irrigation Scheme Hits Farmer Uptake Targets

Enough Hawke's Bay farmers have signed up for water from the proposed Ruataniwha Water Storage Scheme for it to go ahead as long as a cornerstone institutional capital investor can be found to back it, its regional council promoter announced. More>>

ALSO:

Reserve Bank: OCR Stays At 2.25%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.25 percent, in a decision traders had said could go either way, while predicting inflation will pick up as the slump in oil prices washes out of the data and capacity pressures start to build in the economy. More>>

ALSO:

Export Values Down: NZ Posts Biggest Annual Trade Deficit In 7 Years

New Zealand has recorded its biggest annual trade deficit since April 2009, reflecting weaker prices of agricultural commodities such as dairy products, beef and lamb, and increased imports of vehicles and machinery. More>>

ALSO:

Currency Events: NZ's New $5 Note Wins International Banknote Award

New Zealand’s new Brighter Money $5 note has been named Banknote of the Year in a prestigious international competition. The $5 note was awarded the IBNS Banknote of the Year title at the International Bank Note Society’s annual meeting. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news