TVNZ delivers 55% annual profit increase despite falling advertising revenue
By Fiona Rotherham
Aug. 27 (BusinessDesk) - Government-owned Television New Zealand reported a 55 percent lift in full-year profit, despite declining advertising revenue, after growing its share of the television market and relaunching its online services.
Net profit after tax rose to $28.1 million for the year ended June 30, from $10 million a year earlier, the Auckland-based broadcaster said in a statement. Revenue declined 2.9 percent year on year to $350 million, with total advertising revenue falling 1.9 percent to $314 million.
TVNZ chief executive Kevin Kenrick said it had been a good year for the company although overall financial performance was characterised by softer demand for TV advertising, encouraging growth in online advertising, and continued focus on costs.
“While TVNZ is performing well relative to domestic media competitors, the competition for viewer eyeballs and advertising dollars is increasingly being driven by global scale players,” he said.
Kenrick said TVNZ had increased its share of TV advertising revenue, but wasn't able to bridge the overall softer demand for TV advertising, despite a 19 percent annual increase in online revenues.
The board declared an operating dividend of $8.3 million payable to the government.
TVNZ said it grew its share of prime time TV audiences following strong performances from news and current affairs programmes, including One News, Seven Sharp, Sunday, and Fair Go. The gap between One News and its nearest competitor, TV3's news service, was the greatest it has been in 10 years at year-end, it said.
The state-owned company's online services now has 650,000 registered users and 97 million online video streams were delivered during the year, with streams for One News up 44 percent.
Kenrick said in the year ahead the business will continue to focus on growing local TV share and driving online growth against global competitors.
The results release coincides with the release by Communications and Broadcasting Minister Amy Adams of a green paper examining the increasingly outdated legislative distinctions that exist between traditional broadcasters and online content services, with questions including whether long-standing restrictions on free-to-air broadcasters such as advertising-free Sundays and election campaign advertising restrictions remain relevant or constraints on competition with emerging digital content platforms.