NZ IDOL – Funding Provided By NZ On Air

Please note the following background information regarding NZ On Air’s minority funding contribution to the locally-made television programme, NZ Idol.

Overview

NZ On Air contributed $450,000 towards the production of 24.5 hours of NZ Idol. The NZ Idol programme screened on TV2, with 28 episodes going to air over 14 weeks.

This funding represented a small percentage of the total production budget.

The provision of NZ On Air funding was necessary to bridge a gap in the production budget, over and above financing that was available from commercial sources (including TVNZ). Without this “kickstart” it is unlikely the programme could have been made in New Zealand.

Reasons for funding the project

NZ On Air does not normally allocate funding to a series based on a licensed format, but there have been a few exceptions (for example Colonial House and Pioneer House).

The NZ On Air Board may decide to make such exceptions (a) if the programme clearly and strongly fits with NZ On Air’s brief to promote and foster expressions of NZ culture and identity, and (b) when the cost of production requires an element of public subsidy to top up what might be available from other sources.

Colonial House and Pioneer House were two such examples. NZ Idol is a third. In the case of Pop Stars, NZ On Air took the initial risk on what was later to become a successful international format.

Success for NZ On Air is measured in terms of audience satisfaction and enjoyment of the programme, and by the programme delivering on our responsibilities under the Broadcasting Act – to promote and foster expressions of NZ culture and identity through broadcasting.

NZ Idol has certainly achieved this. It has been inspirational to many, many viewers, and has shown that ordinary New Zealanders are capable of achieving extraordinary things. It was public service programming in the sense that it provided a strong, shared experience amongst the widest cross-section of the community. It included insights into communities as diverse as Rotorua and Panguru (where most of the far-north town came out to see Emily Kay have her moment of fame) as the NZ Idol programme included interviews with and footage of the communities that contestants live in.

It was the first television talent show of its type for New Zealand, attracting expressions of interest from more than 20,000 people, and going on to audition 4,000 hopefuls.

Funding arrangements

NZ On Air usually provides funding to independent production companies, rather than broadcasters, but in the case of NZ Idol, NZ On Air entered a production and funding contract with TVNZ. The reason for doing this, rather than contracting with South Pacific Pictures, the producers, was in order to ensure we could recoup our investment from any profits made by the programme.

NZ On Air agreed to negotiate a contract with TVNZ, which identifies our funding as an “equity investment” in the programme, and provides for the recoupment of some or all of the NZ On Air investment under certain circumstances.

If NZ Idol exceeds an agreed threshold, then NZ On Air is entitled to repayments on a “first-out” basis against our investment, in accordance with the shares set out in the production and funding contract.

For us, it is a “win/win”. If the programme is genuinely profitable for TVNZ, money will flow back to NZ On Air, and the taxpayer will not have subsidised the series.

As with any of our funding agreements, NZ On Air is has in place a system of reporting that ensures costs are reported against agreed budgets. This project will not be treated any differently from others in that respect.

NZ On Air originally contributed funding to a proposal for the production of 18 hours of NZ Idol. Prior to contracting with NZ On Air, the network decided to extend the series by an additional 6.5 hours without any request for additional funding from NZ On Air. It is important to note that, contrary to some recent reports, NZ On Air did not provide any production funding for this programme until the contract with TVNZ was signed.

The exact terms of the recoupment arrangement are commercially confidential.

NZ On Air August 2004.

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