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

 


CORRECT: TVNZ committed to Igloo, misses sub 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, fixes source of TiVo comments in 6th, 7th graphs)

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, chairman Wayne Walden 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," Walden 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

 

What Winter? Temperature Records Set For June 20-22

The days around the winter soltice produced a number of notably warm tempertaures. More>>

Conservation Deal: New Kākāpō Recovery Partnership Welcomed

Conservation Minister Maggie Barry says the new kakapo recovery partnership between DOC and Meridian Energy is great news for efforts to save one of New Zealand’s most beloved birds. More>>

ALSO:

Tech Sector Report: Joyce Warns Asian Tech Investors View NZ As Hobbits And Food

Speaking in Wellington at the launch of a report showcasing the value of the technology sector to the New Zealand economy, Joyce said more had to be done to tell the country's technology stories overseas. More>>

ALSO:

Mediaglommeration: APN Gets OIO Approval For Demerger Plan

APN News & Media has received Overseas Investment Office approval for its plan to split out its NZME unit ahead of a potential merger with rival Fairfax Media's New Zealand operations. More>>

New Paper: Ninety-Day Trial Period Has No Impact On Firms' Hiring

The introduction of a 90-day trial period has had no impact on hiring by New Zealand companies although they are now in widespread use, according to researchers at Motu Economic and Public Policy Research. More>>

ALSO:

Corrections: Serco Exits Equity Stake, Remains As Operator

Serco has sold its equity stake in the company that holds the contract to design, build and run Wiri Prison in South Auckland but continues as sub-contractor to operate the facility. More>>

GDP: NZ Economy Grows Faster-Than-Forecast 0.7%

New Zealand's economy grew at a faster pace than expected in the first quarter of 2016 as construction expanded at the quickest rate in two years. The kiwi dollar jumped after the data was released. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news