Digital Growth And Managed Costs Fuel TVNZ’s Future Investment

TVNZ’s FY23 result demonstrates robust financial management despite challenging economic headwinds. Operational earnings (EBITDAF) of $14.1 million were down $12.0 million year-on-year. Net Profit After Tax (NPAT) of $1.7 million for the period was a decrease of $6.2 million from the previous year.

Total revenue decreased $14.1 million year-on-year to $327.6 million. Total advertising revenue came in at $309.0 million, $12.1 million lower than the previous year. Declines in TV revenue were buoyed by a 14% year-on-year increase in digital revenue. TVNZ remains focused on ensuring digital growth outpaces any anticipated declines in broadcast television, as the business actively transitions its content offering online over time.

As revenue declined, the business responded by reassessing its cost base. Total operating expenses decreased by $2.0 million to $313.6 million, as investment in people and technology to deliver TVNZ’s strategic priorities were offset by savings in other overhead costs. Total content costs of $178.8 million decreased 5.6% year-on-year with some programming deferred to FY24.

“In a tough media market environment, TVNZ has reported a solid result for FY23”, said TVNZ’s Interim CEO, Brent McAnulty.

“Strong audience numbers helped TVNZ outperform the market this past year. Local content including Te Matatini, new seasons of Celebrity Treasure Island and T20 Cricket Internationals resonated with viewers. 1News provided live and breaking coverage to highly engaged audiences - from Cyclone Gabrielle, to Her Majesty The Queen’s funeral, the coronation of King Charles III and the Commonwealth Games in Birmingham. We’re also proud of the performance of TVNZ+, with the platform now reaching over 1.2 million viewers weekly and ending the financial year by bringing New Zealanders the largest free-to-view sports offering in over two decades.

We expect inflationary pressures and slower economic conditions to continue into FY24. While TVNZ will need to navigate this carefully, particularly in the first half of the new financial year, we remain committed to advancing our ambitious digital strategy to secure a sustainable future for the business.”

TVNZ’s digital transformation involves a significant investment in technology. The organisation will begin to draw down on its cash reserves to build a stronger digital backbone for the business. This investment will be reflected in forthcoming results.

In FY23, TVNZ approached the market to procure the services of a Master Systems Integrator to work alongside the business in implementing and delivering a new IP platform. This will move the business from broadcast-based technologies to a cloud-based engine. TVNZ also established a Transformation Office to drive this strategic change internally and to develop the culture and capabilities required for TVNZ’s future.

“People are watching more TV shows than ever before, but how they are watching has changed dramatically. TVNZ+ has provided us with a great start, reaching 27% of New Zealanders daily*, but we’re keen to move faster and create more value for our viewers. Developing a world-class digital offering is one of the most important investments we can make to safeguard quality local content in Aotearoa for years to come,” said McAnulty.

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