TVNZ profit slumps 45% on TiVo write-down
March 23 (BusinessDesk) – Television New Zealand Ltd. posted a 45% slump in first-half profit after the State-owned broadcaster took a $14.8 million hit on its ill-fated TiVo investment.
The Auckland-based national broadcaster made a net profit of $4.9 million in the six months ended Dec. 31, almost half the $8.9 million earned a year earlier in trying times.
It was forced to recognise a charge on its share of losses and impaired investment in Hybrid Television Services, which has struggled to bring TiVo, a box that lets viewers record and store television programmes, into Australasia.
Chief executive Rick Ellis said the venture with Australia’s Seven Media Group faced an “extremely competitive market” and its operating margins were unsustainable.
Still, the broadcaster’s operating earnings more than doubled to $33.5 million from $14.2 million a year earlier as advertisers returned to TV. Advertising revenue climbed 8% to $163 million, making up more than three-quarters of the broadcasters income stream.
Advertising Standards Association data showed TV lifted its share of the ad market to 28.4% in 2010 from 27.9% a year earlier.
The broadcaster wound down its capital investment in the six-month period to just $4.6 million, from $20.9 million a year.
Speculation is growing Broadcasting Minister Jonathan Coleman will pull the plug on funding for TVNZ’s digital channels when the initial period ends in June this year.