Survival of the TVNZ Charter Depends on Definition

News reports about recent announcements by Labour and National concerning their respective policy positions on TVNZ all overlook a critical issue at the heart of the debate- the assumption of different definitions of ‘public broadcasting’. At least five distinct conceptions can be discerned:

a) Public ownership of broadcasting institutions which otherwise operate commercially and generate revenue for the government (e.g. TVNZ’s operation as a state-owned enterprise up to 2003).

b) Provision of public subsidies to provide local content that might not otherwise be commercially viable in a small, competitive market, irrespective of the provider (e.g. NZ On Air’s contestable fund).

c) Public Service Broadcasting defined in narrow terms of providing public funding to a publicly-owned broadcaster to provide a specific range of programming complementary to the commercial mainstream to help off-set market failure. Thus public broadcasting subsidies are permitted but ‘quarantined’ so as to enable production of non-commercial genres only (compare with the original UK Channel 4 model, also see the European ‘Amsterdam Protocol’; in theory, this is also a principle behind the NZ On Air and TVNZ Charter funding).

d) Public Service Broadcasting as the provision of a diversity of quality programming (including mainstream and minority content) to fulfil a full range of social, cultural and democratic functions enshrined in the charter of a publicly-owned, non-commercial broadcaster (e.g. Radio NZ Charter, UK BBC model).

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e) Public Service Broadcasting in the broadest sense of the entire system/ecology of broadcasting institutions being regulated and funded to ensure a diverse range of institutions provide diverse schedules of programming and together fulfil a full range of social, cultural and democratic functions. This might include some default public service obligations on all broadcasters, including private, commercial broadcasters (e.g. UK model, although this is becoming weaker as commercial operators try to dilute their public service obligations).

The problem is that neither politicians nor news reporters seem to understand these distinctions. The result is that both political policies and news reports on public broadcasting conflate different notions of public broadcasting, stirring up arguments that generate more heat than light. The recent policy announcements on the TVNZ Charter funding from Trevor Mallard and Jonathan Coleman are both illustrative of ambiguous conceptualisations of public broadcasting.

Firstly, the recent decision by Trevor Mallard (the Minister of Broadcasting) to redirect funding for the Charter through NZ On Air retains the earmarking of those funds for TVNZ, but requires NZ On Air to approve its programme proposals before releasing the funding. This is ostensibly intended to increase the transparency of the TVNZ Charter funding. With its dual Charter-plus-commercial remit, there have been concerns that TVNZ’s dependence on commercial revenue has led it to use Charter funds to subsidise its mainstream commercial schedule rather than to deliver public service functions that would otherwise be inhibited by the commercial drive for ratings.

However, providing local content that would not otherwise be commercially viable is also the intended function of the NZ On Air contestable fund. Unfortunately, under current arrangements, the contestable fund is not set up to deliver a full range of quality public service outcomes. That is partly because NZ On Air does not fund key public service genres like news and current affairs, and partly because eligibility for contestable funding requires an agreement from a broadcaster to screen a programme; this gives the broadcasting schedulers the power to decline proposals which are considered too commercially risky (and in a changing digital multimedia environment with fragmenting audiences and revenue streams, broadcasters’ risk-aversion is intensifying).

Consequently, while NZ On Air’s function has successfully promoted local content, it does not address the considerably wider range of public service functions specified in the TVNZ Charter. Indeed, recognition that local content was merely one component of public service, not a substitute for it, was an crucial factor behind the government’s original decision to directly fund the Charter.

The problem here is that neither the direct Charter funding nor the NZ On Air contestable fund have succeeded in insulating programming and scheduling decisions from commercial pressure. By making NZ On Air responsible for administering the Charter money, there is no guarantee under the current institutional arrangements that this underlying policy flaw will be ameliorated.

Without making excuses for some of TVNZ’s more dubious uses of its public funding, the Labour government has consistently refused to recognise that the core problems with the Charter set-up stem largely from the contradictory imperatives of its own policies: TVNZ remains dependent on commercial revenue for 90% of its income, with a disproportionately low level of public funding given the range of Charter obligations and continuing dividend expectations (indeed, no other comparable public broadcaster receives such small public subsidies). Furthermore, there is still no clear system for evaluating Charter delivery given the dual remit and inconsistent expectations from the Treasury and Ministry for Culture and Heritage (although TVNZ itself has started to develop some measures for Charter performance).

Ultimately, Labour’s policy on TVNZ has entailed expedient shufflings between different conceptions of public broadcasting, i.e.; public ownership with commercial functions, limited public subsidy for non-commercial public service content, and limited public subsidy for local content provision. The TVNZ Charter is the centrepiece of Labour’s well-intentioned mission to revitalise public broadcasting in New Zealand after the market failures of the 1990s. But Labour’s attempts to fund the Charter on the cheap while pretending that it is supporting a full range of public service functions has rendered not only the Charter policy but the very desirability of public service broadcasting vulnerable to political criticism. After nine years in office, the tragedy is that the weaknesses of this central policy will likely define Labour’s broadcasting legacy and overshadow the other progress that has been made (e.g. in public radio, Maori television and, in fairness, in TVNZ itself, especially with the establishment of TVNZ 6 and TVNZ 7).

Just when proponents of public service broadcasting might have been wondering how things could get any worse, the National Party duly announced its own policy position on TVNZ. This appears to be little more than a reversion to the free market ‘Rogernomics’ ideology of the 1980s and 1990s. Jonathan Coleman’s proposal to discontinue the TVNZ Charter and reallocate the funding to NZ On Air’s contestable fund will no doubt delight TVNZ’s commercial competitors who object to what they regard as a government bung to a competitor (although ironically, the contestable fund has historically benefited TVNZ far more than any commercial broadcaster, and far more so than the Charter funding!). Under a future National government, TVNZ will apparently be relieved of its Charter duties and thereby enabled to perform to its full capability, by which National means resuming its 1990s role as a commercial operation paying dividends to the government. Four key assumptions underpin National’s position:

Firstly, National is following the neoliberal principle that any public funding made available to a state-owned broadcaster and not the commercial sector constitutes ‘market distortion’, even when it is directed towards off-setting opportunity costs of producing content that would not otherwise be commercially viable. Concerns about market distortion may be valid in cases where a publicly-owned and publicly-funded broadcaster also competes directly for ratings and commercial revenue (which could apply to TV One and TV2, although clearly not to TVNZ 6 and TVNZ 7 which are commercial-free).

However, this perspective overlooks the equally- valid argument that all broadcasters should have default public service responsibilities as a basic condition of being licensed to operate. Making public funding available to private commercial broadcasters to promote local content or provide public service functions makes the taxpayer responsible for subsidising market failure and therefore constitutes corporate welfare.

Secondly, contestable funding models are premised on a conception of public broadcasting that assumes that public service content can be adequately provided by public funding regardless of the broadcasting institution. If that were true, and National abolishes the Charter, then it would appear to have no consistent policy rationale for the retention of TVNZ in public ownership (since National is otherwise generally sceptical about state ownership of commercial businesses). Despite Jonathan Coleman’s denials, this does invite questions about whether National’s ulterior motive for abolishing the Charter may be to set TVNZ up for privatisation (since that was precisely what the last National government was planning until it was thwarted by Labour’s victory in the 1999 election).

Public broadcasting institutions are important as part of a mixed-sector broadcasting ecology, because without a strong public service ethos among the local production industry or the broadcasters, programme proposals will gravitate towards the commercial mainstream. Publicly-owned broadcasters can, if properly funded and incentivised, help set and maintain sector-wide benchmarks for programme quality and help offset the sort of market failures and lowest-common-denominator philosophy evident during the 1990s.

Although contestable funding made available to any media institution may incentivise some higher quality mass-appeal content, as the earlier arguments noted, it will not incentivise the full range of programmes which would be required to fulfil a public service remit like the TVNZ Charter. Broadcasters will not seek funding for programmes which will not fit into a commercial schedule, so the system remains vulnerable to commercial pressure and market failure. Even if funding is allocated to certain genres, this does not prevent news and current affairs from becoming infotainment and serious documentary from becoming reality-TV. Moreover, in a digital multimedia environment, funding local PSB content on a contestable basis to be distributed via a plethora of different channels and platforms means this content may become less visible and readily accessible, thereby fragmenting its potential reach and ostensible public value.

Thirdly, while National’s critique of the TVNZ Charter arrangements and the limitations of the dual public service/ commercial remit is partially justified, its analysis of the reasons for its under-performance is fudged. The principles outlined in the Charter document itself, the institutional, regulatory and funding arrangements underpinning TVNZ (i.e. government policy) and TVNZ’s performance in delivering charter outcomes are all tarred and feathered in equal measure. Although Jonathan Coleman rightly notes the need for a system to evaluate Charter delivery, he prematurely rejects this as a realistic possibility, even though the revised Charter and the performance measures TVNZ has been developing were endorsed in the recent 5-year review of the TVNZ Charter (undertaken by the Commerce Select Committee which featured several National Party representatives).

By obscuring the specific factors that might explain why the TVNZ Charter system has not delivered on its promises and help point to a solution, National is trying to claim a pretext for the wholesale abandonment of the Charter (presumably by lunchtime). This is a rejection not only of a specific institutional/ policy arrangement, but of the very desirability of the wider broadcasting principles and values the Charter represents. This ideological opposition to public service values expediently precludes any consideration of whether there might in fact be ways of making the Charter system deliver on its expectations. With better-designed funding mechanisms and performance measures proportional to the level of public funding, this would be entirely achievable. (There is a certain irony here that, as a doctor of medicine, Jonathan Coleman’s first act, were he to become the next Minister of Broadcasting, would not be to diagnose the Charter’s ailments and prescribe appropriate medication, but to switch off its life support…)

Fourthly, National assumes that free market competition can ensure the provision of public service. Jonathan Coleman has claimed that competition ensures the best projects to get made, which is only tenable if one assumes that ‘best’ is narrowly defined as ‘most profitable’. Commercial broadcasters may indeed contribute to public service provision if incentivised or regulated to encourage competition for quality as well as ratings. But while commercial broadcasters can be induced to provide higher-quality mass-appeal content (e.g. local dramas), they will tend to under-deliver on the full range of public service content/ functions, notably in regard to high quality programming with limited audience appeal (such as hard news and current affairs, educational documentaries, or programming pitched at minority groups).

Consequently, National’s assertion that free market competition among commercial broadcasters can deliver public service outcomes is empirically unsustainable. The accumulated evidence of decades of broadcasting research from around the world is compelling, unequivocal and conclusive: Deregulated free market broadcasting systems tend towards oligopoly and produce schedules geared to the lowest common commercial denominator. Market competition for ratings and revenue does NOT deliver public service outcomes. Public subsidy is needed to ensure that investment in a full range of high quality programming is maintained. Indeed, broadcasting in New Zealand during the 1990s is often regarded by media researchers as a text book case study of market failure. For National to disregard the evidence in its eagerness to serve an ideological doctrine is both wilfully ignorant and politically irresponsible.

In conclusion, then, both Labour and National claim to support ‘public broadcasting’, but they assume radically different conceptions of the term in their policies. Labour continues to pay lip-service to public service ideals, but in practice, pursues policies which support a much more limited version of public broadcasting, augmenting a commercially-dependent TVNZ with modest subsidies to extend the Charter a little beyond the commercial norm. Although Labour undertook to redress the market failures of the 1990s, its inconsistent and often expedient approach to public broadcasting has delivered more soggy compromises than public service.

National, meanwhile, considers public broadcasting merely in terms of continued public ownership of a commercial TVNZ stripped of its Charter obligations. Although it would continue to make contestable funding available through NZ On Air to encourage local content production, its policies are ideologically opposed to the notion of public service broadcasting in its broader sense and would effectively reinstate the deregulated commercial broadcasting model that led to the market failures of the 1990s.

Public broadcasting is not just any other business. It involves social, cultural and civic functions central to the formation of cultural identity and facilitation of democratic engagement. In their efforts to keep up election-year appearances, both Labour and National are selling the New Zealand public impoverished notions of public broadcasting. If Trevor Mallard and Jonathan Coleman are actually serious about developing workable broadcasting policies that serve the public interest, they might start by reviewing the evidence and being honest about just which version of public broadcasting they really support.

Peter Thompson is a Senior Lecturer in Unitec’s School of Communication Studies. He has written extensively on the government’s broadcasting policies since 1999, and chaired the working party which revised the TVNZ Charter in response to public submissions. He has also undertaken policy research projects for the Ministry for Culture and Heritage (on broadcasting funding-setting mechanisms in OECD countries) and NZ On Air (on approaches to measuring broadcasting quality). e-mail: pthompson@unitec.ac.nz

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