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Maharey Speech: commercial radio broadcasters

Steve Maharey Speech: Acknowledging the contribution of commercial radio broadcasters

Comments at the Radio Broadcasters Association conference, Sheraton Hotel, Auckland.

Introduction

Hello to you all. It is a great pleasure to be here today to address your conference and to participate in the panel discussion. Since holding the Broadcasting portfolio, John McElhinney, and executive director, David Innes, have kept me regularly briefed on your issues and concerns.

Reallocation of commercial spectrum rights

One issue which has been looming for some time is the impending expiry of spectrum rights and the lack of direction in the Radiocommunications Act 1989 on how they should be reallocated.

I am very pleased to be able to announce that the government has confirmed that it will offer commercial spectrum rights to current rightholders for a further 20 years subject to payment of a pre-determined fee.

This will be undertaken five years before expiry of present rights.

Television rights (UHF) expire in 2010 and sound broadcasting rights in 2011.

I am sure you will all be very relieved to end a period of uncertainty.

The rights will be reallocated on a case by case basis to ensure consistency with New Zealand's international radio obligations and the general objective of ensuring spectrum rights are held by those who value them most.

This is seen to maximise overall value to society.

A price-setting formula that estimates the current market value of the rights will be used and if existing rightholders do not want to pay this price they will be auctioned. The price will also ensure that the government receives a fair financial return for the spectrum, which it administers on behalf of all New Zealanders.

Existing rightholders will be consulted on the development of appropriate formulae for determining the price paid.

The timeliness of this decision should provide you with the certainty you require to make effective planning and investment decisions in the future. It should give you the confidence to explore new and exciting areas of technology.

Ultimately viewers will also benefit from the assurance that this announcement creates for broadcasters.

Government's approach to broadcasting

Holding the Broadcasting portfolio gives me much satisfaction, given my long-standing interest in the field. I welcome the opportunity to contribute my own experience and convictions to the goal of ensuring New Zealanders’ needs are met by our broadcasting sector.

During 1980s and 90s many of you here today will have driven the rapid expansion of commercial radio to the point where New Zealand is often regarded as the world's most competitive radio market.

This government stopped and had a hard look at the broadcasting environment and its real importance. It is clear to us that the market model is part, but not all, of the broadcasting equation; that it leaves many needs unmet.

The fact that broadcast media in some form reach almost every person living in this country gives the broadcasting sector an enormous potential to influence people’s lives positively. At best, broadcast media inform, entertain, challenge; they link people in vastly different circumstances and cultures; and they bring the concerns of groups within the community to the attention of wider society.

This potential was far from being realised by the broadcasting model set up by the previous government. There was a lack of services for minority and special interest audiences, and less than adequate reflection of New Zealand issues on radio and television. These ‘public good’ components of broadcasting cannot exist through the application of the market alone; they require the right mechanisms, and in some cases, ongoing government support.

Mixed broadcasting economy

We would argue, in fact, that the ideal broadcasting environment for this country is by nature a mixed one with some commercial and some public components, together providing a comprehensive, responsive set of services for New Zealanders.

I place enormous value on the contribution of commercial broadcasters, and indeed the sector would be vastly poorer without you. By definition commercial broadcasters must have wide appeal. This undoubtedly provides many New Zealanders with a service they greatly value, and offers a common ground for listeners to participate in and to enjoy.

But that said, there will inevitably be groups within our diverse society that do not fall into the advertising target groups, and in the absence of public broadcasting services, therefore miss out on having programmes that are relevant and appropriate to them. And the general audience too misses out on the richer range of experiences that public broadcasting can offer.

Government's involvement in broadcasting

This government therefore resolved to redress the imbalance by becoming actively involved in broadcasting. This approach was not conceived in isolation, but in the context of our hands-on approach to the wider cultural sector.

We recognised that broadcasting, arts and heritage activities play a key role in defining, in an increasingly globalised environment, what it means to be New Zealanders. All of these in some way express who we are and the issues we face. And they provide significant benefits to our international profile, our economy and our wellbeing as individuals.

Hence the government’s major and ongoing investments in the many components of the wider cultural sector, beginning with the Cultural Recovery Package of May 2000.

You will be familiar with the work we have been doing in broadcasting since that time: increasing support for NZ On Air, Radio New Zealand and TVNZ; encouraging guidelines for local content; supporting local production; working towards an effective Mâori television service; promoting the development of a vibrant screen industry through the Growth and Innovation Framework; and undertaking analysis and development work on key issues such as digital television and screen violence.

Television New Zealand Act and Charter

Of course, a recent achievement has been the passing of the Television New Zealand Act 2003. The Act changes the structure of Television New Zealand, establishing its television business as a Crown-owned company rather than a state-owned enterprise. And it puts in place the Charter which will guide the operation of TVNZ as it functions as a cultural and information resource for its citizens.

The workability of this new model depends on the effective integration of the viewer as citizen and as consumer – given the extent to which the government relies on advertising to make this service possible.

Clearly, in a country with a tax base the size of ours, the trade-offs that would be necessary to make sufficient funding available to fully support a public television service, are prohibitive. The new Act, with its Charter, represents an effective relationship between culture and commerce.

New Zealand music

Another example of how public broadcasting objectives can operate hand in hand with commercial ones is of course the Code of Practice for New Zealand Music Content on Radio.

I congratulate you on once again for your first-rate commitment to local music, particularly in beating targets to achieve an excellent 15.36 percent for the first quarter of this year. As a huge fan of many local bands and musicians I am pleased to see that kiwi music is fast becoming an established component in commercial radio playlists across the country.

The development of the Code shows what can be achieved when members of the broadcasting sector look strategically at the role they can play in giving air to New Zealand creative talent – and giving New Zealanders the opportunity to hear the expression of their own culture on the radio.

As you are aware, I hope that the Code will form a key part of a virtual circle, whereby increased radio play of kiwi music stimulates sales and production, which in turn stimulates audience demand for New Zealand popular songs and music. Domestic success, with your support, is the essential first step to gaining a share of the multi-billion dollar international music industry.

The success of the Code to date is extremely encouraging, and we would be very pleased to see a similarly successful result for the recently convened Television Local Content Group.

Just what has been achieved is put into perspective when you consider that as recently as 1995, the proportion of New Zealand music played on New Zealand commercial radio was just 2%.

Congratulations are also due to contributing members of the recording industry – supporting New Zealand music is not without its challenges and risks. An important role too, particularly in terms of mix and diversity, is played by the independent labels which develop acts from the grass roots.

I would strongly encourage radio broadcasters to keep an open mind when listening to the music that’s out there, and bear in mind that fabulous new music is available from many different sources – in addition to the tried and true. The Tui Awards last month show the quality of New Zealand music across a wide diversity of genres.

New Zealand music is entering a new age of acclaim and recognition both at home and abroad. An indicative example is the figure for New Zealand music sales which reached 9% of total music sales reported to RIANZ for 2002, compared with the previous year’s 6% .

You just have to look at the international success of a band like the Datsuns that featured so spectacularly at the Tui Awards, to get a sense of what is being achieved out there. This year more than 30 New Zealand bands and musicians are on the road gaining exposure for New Zealand music on the international market.

Through you, the broadcasters, New Zealand On Air's Phase Four scheme, the New Zealand Music Industry Commission, Trade New Zealand and Industry New Zealand, we are helping to ensure our music industry is able to make the most of these opportunities.

New Zealand Music Month

It is encouraging to see the collaboration going on from various players, both government and private sector, in terms of ensuring that New Zealand music continues to be heard and celebrated. New Zealand Music Month – which seems to be growing exponentially from year to year - is of course a key focus for this.

The enthusiastic involvement of commercial radio since the old ‘New Zealand Music Week’ back in 1997 has, of course, been instrumental in its success, and I am told that the level of support from radio this year is at an all time high.

Indeed, a good deal of credit is due to the positive contribution of the Radio Broadcasters Association and in particular, David Innes who has done an excellent job of steering the project as chairman.

Assorted issues

I would like to move on now, to look at a few of the issues that have arisen in recent times. I am sure you are all too aware that your sector generates some interesting policy questions for the government to grapple with.

Youth Radio I know that the issue of a Youth Radio Network is one which has exercised you for some time because of the impact you perceive such a network might have on audience share.

The government is still giving consideration to the most appropriate form of radio content and services for young New Zealanders.

BSA and retention of tapes I am pleased to see that in the spirit of industry and regulator working together you’re your association was able to come to a voluntary understanding with the Broadcasting Standards Authority over the sensitive issue of the retention of radio tapes.

I understand that the BSA was concerned that too often radio broadcasters were not keeping tapes in accordance with the Broadcasting Code making it difficult to determine complaints.

I am pleased to learn that the two groups have been able to reach an accord without the need of any form of government or regulatory intervention and the result in the first six months of this year shows the agreement is working well.

Digital audio broadcasting An issue for the medium term is, of course, the impact of digital technology on radio broadcasting. The Labour Party Manifesto states that: Labour will develop, in close consultation with the broadcasting industry, a policy and regulatory framework that aims to give all New Zealanders access to the benefits of digital technology.

In some ways the potential of digital technology is less clear cut in radio than in television, and given the developments overseas which are proceeding with mixed results, it makes sense not to forge ahead too quickly but to take account of experiences elsewhere. I will be interested over the next year to access the Radio Broadcasters Association’s thinking on these issues.

Compliance issues An issue about which there has been some concern relates to iwi licence holders and Te Reo obligations. I acknowledge there are some high profile problems although some other stations demonstrate a commitment to promoting Te Reo that surpasses expectations.

Mâori broadcasting issues are, of course, the responsibility of my colleague the Minister of Mâori Development Hon Parekura Horomia. I am aware, however, that Te Puni Kokiri is working in collaboration with Te Waka Ruruhau and licence holding iwi, and it is expected that a monitoring framework will be in place by September. All outstanding issues are expected to be resolved by that time.

I know some of you are also concerned about the activities of broadcasters who make use of the FM guard bands for low power broadcasting under a General User Licence.

The government has been very active in recent months investigating various complaints about breaches of the terms of the general licence, particularly in Wellington and Auckland. One broadcaster's operation has so far been shut down for non-compliance and investigations continue with other broadcasters.

You will be pleased to know that the government will very soon announce a more clearly articulated policy on the management of the guard bands, and will close some of the loopholes that have resulted in misuse of the bands.

Advertising In recent times we have seen some lively debate around the issue of advertising and its social impact, in particular in relation to fast foods, liquor and pharmaceuticals.

It is important to be mindful of the power of advertisements, and I have urged advertisers to maintain a position of integrity and caution.

Such emotive debates can be difficult to keep in proportion, and we must not lose sight of the fact that the industry in large part demonstrates a strong commitment to responsible advertising.

The advertising codes developed by the Advertising Standards Authority are vital in terms of managing the balance between effectiveness of advertisements and social responsibility.

I strongly endorse the approach taken by the Advertising Standards Authority in establishing a panel to consider the appropriateness and effectiveness of the current liquor code.

There is some careful analysis yet to be done on these issues, and any speculation about where we might end up would be premature. But I can assure you that the government is aware of the benefits of an industry self-regulatory regime - and that in its consideration of these matters we will not be making decisions based on a knee-jerk reaction.

Conclusion

I take the opportunity to assure you that in this, as with broadcasting policy in general, the government is of the strong belief that arrangements put in place to achieve public broadcasting objectives must not work against the viability of commercial broadcasters.

As I expressed earlier, I believe in a mixed broadcasting economy, and the government’s focus will be on how to nurture that environment, not undermine it.

I can therefore reassure you that I value your being ‘in the loop’ as we continue to work towards the best possible broadcasting system and services for New Zealand, and New Zealanders.

This is a complex and dynamic sector - the right strategy and the best practices can sometimes take considerable time to discern, develop and achieve.

It is one of my convictions that an essential component of robust policy-making is to listen and learn – to engage in informed debate with those who participate in the field.

There is a great deal of expertise and energy in this sector and it is simply common sense to draw on that.

Thank you for the opportunity to speak to you today. I look forward now to some challenging discussions on the panel.

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