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End of an Error? Death of the TVNZ Charter

The End of an Error? The Death of the TVNZ Charter and its implications for broadcasting policy in New Zealand

By Peter A. Thompson, Senior Lecturer, Media Studies Programme, Victoria University of Wellington.

I was overseas attending a media conference when I learned that the third reading of the Television New Zealand Amendment Bill had passed through Parliament on 12th July. The Act removed the much-maligned TVNZ Charter and strips New Zealand’s principal free-to-air television operator of any substantive obligation to serve the public interest beyond returning a dividend to the Crown. When I mentioned this development to the other delegates at the conference, they were shocked and questioned why any ostensibly developed country would oblige the publicly-owned television service to abandon its commitment to public service principles.

As a researcher specialising in broadcasting policy, I have been following the development of the TVNZ Charter from its inception. Although I was- and remain- strongly supportive of the principles the Charter represented, I was nevertheless critical of the funding and institutional arrangements that underpinned its delivery. Whether it was as reward or penalty for my troubles, I was invited to chair the working party that reviewed public submissions on the redrafted Charter document as part of its 5-year review. Although the revised version we helped produce was endorsed by the Commerce Committee, the election of the current government meant was never implemented. So despite the new legislation, there is a sense of unfinished business here, and some important policy issues need to be clarified before the final chapter in the saga of the TVNZ Charter is closed.

In September 1999, Labour released its new broadcasting manifesto emphasising the cultural and democratic deficits of a television sector that had become so thoroughly commercialised over the preceding decade that the National-led government was seeking to privatise TVNZ. Fortunately, the neoliberal policy trajectory stalled, at least momentarily, when the first of three successive Labour-led governments was elected in November 1999. Labour’s manifesto had proposed the introduction of a public service Charter for TVNZ, and this was to become the centrepiece of the broadcasting policy framework over the next nine years.

One of the first moves by Labour was to shift the locus of policy advice for broadcasting from the (then) Ministry of Commerce (where it has been combined with the communications portfolio under National) to the Ministry for Culture and Heritage, reflecting the political shift in priorities. Marian Hobbs’ direction of broadcasting policy developments was nevertheless compromised by the priorities of other ministerial agendas driven by more senior Ministerial colleagues. On advice from Treasury, Helen Clark ruled out a TVNZ proposal for a digital venture with NTL, dismissing the plan as a ‘white elephant’. The Ministry of Commerce (now Economic Development) set the terms for the 2000 Ministerial Inquiry into Telecommunications which myopically endorsed Sky’s increasing market penetration and ruled out regulation of the set-top-box. Meanwhile, Treasury, led by Finance Minister Michael Cullen, refused to provide any substantial funding for the proposed TVNZ Charter or to forego its expectations of continuing commercial dividends.

With the public broadcasting licence-fee having been disestablished (under National but with the complicity of Labour) and free-trade agreements ruling out the introduction of local content quotas, the the Broadcasting Policy Working Party tasked with developing Labour’s policy options was already locked into a ‘third way’ framework that accepted the monetarist macroeconomic framework. Although the draft Charter proposal was well-intentioned, the proposal to bolt this onto TVNZ’s existing commercial operation was flawed from the beginning. How far the proposed Charter arrangements would succeed in insulating TVNZ’s programming decisions from commercial pressures when it was also expected to maintain commercial performance was unclear. I published two articles in 2000 analysing the intrinsic contradictions of the proposed dual-remit model. Perhaps rather unkindly, I likened the policy to a Frankenstein experiment whereby a public service head was being stitched onto a commercial body. I also wrote to Marian Hobbs explaining why the Charter model was unlikely to work. However, Labour was unreceptive to any proposal for a more fundamental overhaul of TVNZ or the funding mechanisms.

Importantly, the Charter was intended to extend the range of local content beyond that currently provided by the NZ On Air contestable mechanism and redefined public broadcasting in far broader terms than any provision of local content. The contestable fund was subject to market failure in that content proposals still had to gain agreement from one of the mainstream commercial channels whose schedulers acted as de facto gatekeepers. The promise of modest direct public funding for the TVNZ Charter of up to $15m per year represented less than 4% of TVNZ’s (then) $400m revenue, but even this provision was challenged by NZ On Air which regarded it as a threat to their preferred contestable funding model. TVNZ’s commercial rivals, meanwhile, regarded direct funding of a state broadcaster competing directly with them for audiences and advertising as market distortion.

Indeed, TVNZ itself was wary of the plans Labour had for it and there was considerable scepticism- if not resentment- over the Charter proposal within the broadcaster. A number of board members and senior managers, including the (then) CEO, Rick Ellis, moved on before the Charter reforms came into effect. It was only during Labour’s second term that the legislation was passed (March 2003) making TVNZ a Crown Company with a dual commercial-Charter remit (click here for the Original TVNZ Charter). With a new Minister and CEO driving the changes (Steve Maharey and Ian Fraser respectively), the hopes of a new era of public broadcasting were high, but as predicted, short-lived. Ian Fraser had been prescient in his observation that changing TVNZ’s ingrained commercial culture would require a ‘neutron bomb’ and that the challenge of balancing the commercial and Charter priorities was akin to ‘rendering unto God and unto Caesar at the same time’. Fraser’s efforts to ‘deliver the Charter without screwing the business’ soon ran into the contradictory priorities of different ministerial agendas, however.

The new Charter arrangements had raised expectations well beyond what was achievable on the basis of around $15m of public funding per year. Indeed, in October 2004, the Treasury monitoring unit (CCMAU, now COMU) demanded a continuation of dividend payments and extracted TVNZ’s entire operating surplus which was well in excess of the Charter subsidy from the Ministry for Culture and Heritage. In effect, TVNZ was receiving funding from one ministry only for it to be taken back by another. When Fraser publicly questioned the ‘money-go-round’ arrangement, the government relented and returned some of the dividend, but the political fault-lines were becoming clear.

Later in 2004, further controversy surrounding the Charter came to a head. The commercial wisdom of allowing Paul Holmes to leave the eponymous daily current affairs programme and to replace it with Close-Up was called into question, especially after TV3 announced the commencement of Campbell Live in direct competition and Prime snapped up Holmes to host another rival current affairs programme. In the debate over ratings, the indirect structural influence of the Charter in helping to bring about an increase in current affairs programming across the sector was overlooked. Indeed, with TVNZ lobbying government to have the NZ On Air contestable fund reallocated towards non-contestable Charter functions, it certainly appeared that TVNZ’s commercial rivals were being encouraged to schedule a greater proportion and diversity of local content than they might have considered before.

Indirect structural influences on the media ecology are difficult to define and measure, but what is perhaps telling is the way the commercial and political opponents of the TVNZ Charter eagerly pounced upon any opportunity to criticise it. When Bill Ralston restructured the newsroom by removing Richard Long and leaving Judy Bailey as the sole presenter (partly intended to move the evening news away from the tabloid format featuring meaningless but emotive chit-chat between the anchors), TVNZ’s commercial wisdom was questioned. Yet when news about Bailey’s record salary package was leaked (by one of TVNZ’s own board members), the Labour government itself led the criticism of TVNZ’s ‘culture of extravagance’, even though none of the reported $800,000 came from the Charter subsidy and TVNZ’s accountants had advised that the opportunity cost of losing Bailey might lose TVNZ over $20 million.

Whether it made commercial decisions or charter decisions, it seemed TVNZ was inevitably subject to criticism from the opposing perspective. In 2005, another furore over salaries ensued when Susan Wood took TVNZ to the ERA after her salary package was cut in an austerity drive reflecting the government’s demands. TVNZ’s bumbling was again roundly criticised, but this has to be understood in the context of contradictory pressures to deliver the Charter, maintain dividend payments to the Treasury, and maintain a semblance of credibility for the government’s ambivalent and under-funded public broadcasting policies. In October 2005, Ian Fraser resigned, and in a leaked memo, lamented the fact that continuing dependence on commercial revenue had resulted in a schedule ‘profoundly incompatible with any recognisable model of public broadcasting’.

Although the Charter had, in fairness, inspired some progressive changes to news and current affairs introduced programmes like Face to Face, Foreign Correspondent, and Eye to Eye, and increased TVNZ’s commitment to local content, government could not be persuaded to increased the funding. One reason for the government’s hesitation to allocate additional funds was the lack of clarity over TVNZ’s use of its Charter funds (which had in some instances been combined with NZ On Air funding). This had generated criticism about transparency and accountability. In the wake of Fraser’s resignation, a Parliamentary Inquiry was approved. During its 2006 proceedings, further scandal ensued over the TVNZ Board’s efforts to silence Fraser’s criticisms, with the result that it was found in Contempt of Parliament, forcing the resignation of Craig Boyce and Ann Hercus.

Rick Ellis, became both predecessor and successor to Fraser when he returned as CEO in 2006. His reappointment marked, if not a move away from the Charter, then certainly a strategic shuffle of priorities, emphasising TVNZ’s expansion onto digital platforms, including the online catch-up service, TVNZ Ondemand, and (after further terse intra-cabinet negotiations) the two Freeview channels, TVNZ6 and 7. The 2007 review of the Charter arrangements included the development of a revised and redrafted Charter document, which included consideration of 286 public submissions. The Commerce Select Committee (with one religiously-inspired exception) unanimously endorsed the adoption of the new version (click here: Review of the Television New Zealand Charter) along with TVNZ’s provisions for improved performance measures.

By 2008, TVNZ’s ‘inspiring on every screen’ strategy was up and running, but concerns still surrounded the delivery of the Charter, and the revised version still had not been statutorily amended. Despite important programmes such as the funeral coverage of the Maori Queen and Sir Edmund Hillary, and the Return of the Unknown Warrior, the transparency of funding remained a concern, especially when it transpired that Charter money was being used to subsidise existing commercial programming and support bids for the rights to the Olympic Games (which were then not fully utilised). Third-term Labour broadcasting minister, Trevor Mallard, moved to place NZ On Air in charge of administering the fund.

Although the Review of Regulation for Digital Broadcasting/ Content was intended to re-examine the shape of broadcasting provisions, including public service arrangements, from first principles, its development came too late in Labour’s third term to deliver any outcomes. In November 2008, a new National-led government came into office. The election manifesto statements (click here: National 2008 broadcasting statements) proclaimed National’s intention to increase the transparency of Charter funding by making the $15m contestable and thereby ‘unshackle’ TVNZ from its dual mandate.
National was able to remove the TVNZ Charter funding and set up the NZ On Air Platinum fund prior to the repeal of the 2003 Act because this had never specified the funding arrangements. This made the Charter money entirely a matter of government policy, and as I had myself warned in a 2007 article, without a set of ‘ringfenced’ public funding mechanisms ‘there is little to prevent any subsequent administration less sympathetic to public broadcasting values from diverting the policy momentum back to the commercial trajectory of the 1990s’. For once, it would have been better to be proved wrong.

The statutory repeal of the Charter legislation was only formally announced in December 2009, with the introduction of the bill to amend the 2003 TVNZ Act (the third reading of which passed through Parliament on 12 July). Nevertheless the government did not wait for the statutory formalities before making it clear to TVNZ that its commercial obligations were now of primary importance. If any evidence of the broadcaster’s priorities were needed, in February 2010, Close-Up decided to drop an interview with the Prime Minister in favour of an interview with disgraced former All-Black, Robin Brooke. Regrettably, the government failed to take the hint of what its directives implied for the quality of current affairs. Meanwhile, TVNZ turned down the landmark documentary series, 50 years of New Zealand Television, which screened on Prime in 2010 while its own 50th anniversary programme was widely derided by critics.

On one level, National’s criticism of the TVNZ Charter as unworkable under a dual mandate was certainly valid. Public service and profit maximisation are contradictory priorities because optimising commercial revenue generally precludes provision of a full range of programme genres and (in NZ) the commissioning of local content when imported content is cheaper and generates the same ratings and revenue. However, there are examples of European public service broadcasters with mixed public/commercial revenue streams (such as RTE in Ireland) which operate effectively. However, it is significant that none of these are 90-95% dependent on commercial revenue or obliged to maintain dividend payments like TVNZ.

The Minister of Broadcasting, Jonathan Coleman, may also be justified in suggesting that TVNZ’s institutional culture is inextricably commercial and that trying to restructure it as a public service operator was always going to be problematic. Clearly, Ian Fraser’s ‘neutron bomb’ never detonated, and the meek acquiescence with which TVNZ’s board and management responded to the removal of the Charter, (and indeed, the decisions to discontinue the funding for TVNZ 6 & 7) supports the Minister’s contention that TVNZ is not the right institutional vehicle through which to pursue public service objectives. Its institutional willingness to defer to its political masters was underlined by a recent rumour (confirmed by several sources) that, despite initial support from commissioners, senior-level TVNZ management declined to sign off a proposed documentary critical of New Zealand’s military involvement in Afghanistan, ostensibly because of political sensitivities.

However, the Minister’s dismissal of the delivery mechanism for the Charter in no way obviates the intrinsic desirability of Charter principles and objectives, or for that matter, the need for a strong public service television operator within the media ecology. Jonathan Coleman was either being disingenuous or stunningly ironic in dismissing the Charter as academic ‘waffle’ and suggesting the objectives were meaningless. Apart from the fact that the Charter (and especially the revised version) was more specific than comparable documents from other public service broadcasters, it is certainly no less clear than the Radio NZ Charter which (apart from underfunding) is not regarded as problematic. The TVNZ’s Amendment Bill’s watered-down generic requirements to include provision of free-to-air channels available throughout NZ, provision of high quality content relevant to, and enjoyed and valued by, New Zealand audiences, and inclusion of Maori perspectives and international content are far more vague than the Charter and could apply equally well to most commercial broadcasters.

What was never made clear in the Charter arrangements was the precise balance between commercial and Charter objectives that could be realistically expected given TVNZ’s heavy dependence on commercial revenue and the continuing treasury demand for dividends. This is a far more legitimate target for the Minister’s disdain. The contradictory dual remit coupled with relentless hostility from the political right and other commercial media meant that TVNZ was always fighting unrealistic expectations. The three Labour-led governments must also accept some responsibility here. Their intra-cabinet tensions were never resolved and instead of either adequately funding the Charter obligations adequately or clarifying expectations, it maintained the political pretence of public service expectations and left TVNZ to cop the flak for the policy contradictions.

But before the National government congratulates itself on ridding itself of such a turbulent policy arrangement, it should take a good hard look at the principles the Amendment Bill has just dispensed with: A list of the revised, redrafted Charter aims and objectives are listed below. Have a last read. These are the public broadcasting principles National has decided New Zealanders either do not need, do not deserve or cannot afford:

Revised redrafted charter

As a public broadcaster TVNZ will play a leading role in New Zealand television, especially in respect of the principles laid out in its Charter. The Charter shall apply to all of TVNZ’s operations that contribute to making its content available to New Zealanders. In fulfilling the Charter TVNZ will make this content available through free to air broadcasting and other media technologies.

1. An Informed Society
To provide impartial and comprehensive New Zealand and international programmes that
are essential to having an informed and educated society, TVNZ will:
(a) Provide a range of programmes across all genres;
(b) Strive for the highest standards of programming quality and editorial integrity;
(c) Provide independent, comprehensive, impartial and in-depth news and current affairs;
(d) Promote democratic participation by examining the activities of public and private
(e) Provide programmes of an educational nature which support and encourages learning;
(f) Provide programmes that extend the range of ideas and experiences available to New

2. National Identity and Citizenship
To provide entertaining, educational and informative programmes that reflects the diverse range of cultures and interests that contribute to an understanding of who we are as New Zealanders, TVNZ will:
(a) Provide shared experiences that contribute to a sense of citizenship and national
(b) Provide programmes that contribute towards intellectual, scientific, cultural, sporting and spiritual development;
(c) Enhance citizens’ opportunities to participate in public life by featuring programmes that provide a forum for critical and many-sided debate;
(d) Provide programmes about the diverse cultures, history, heritage and natural environment of New Zealand, and its regions;
(e) Provide programmes that cater for minority interests;
(f) Provide programmes intended for general audiences that address minority interests; and
(g) Strive to enable New Zealanders of all abilities to engage with the fullest range of

3. Maori
To provide entertaining, educational and informative programmes that reflect Maori interests, including language, history, culture and contemporary issues, and to convey these interests to a wider New Zealand audience, TVNZ will:
(a) Provide programmes by, for and about Maori, involving significant Maori participation and perspectives; and
(b) Provide programmes intended for general audiences that promote Maori language and culture.

4. Diversity

To provide entertaining, educational and informative New Zealand and international programmes that serve the interests and needs of different audiences, cultures, beliefs, abilities, lifestyles, age groups and regions, and particularly those not provided for in a purely commercial broadcasting environment, TVNZ will:
(a) Provide programmes across all genres;
(b) Provide programmes catering for interests not normally provided for by other national television broadcasters;
(c) Balance the programme needs of general and smaller audiences;
(d) Provide programmes that promote understanding of New Zealand’s diversity of cultures and regions;
(e) Feature New Zealand films, drama, comedy and documentaries;
(f) Provide programmes that educate, inform, entertain and involve children and young people;
(g) Provide programmes that support and encourage awareness of environmental issues and sustainable development;
(h) Provide programmes that support, encourage and feature the sciences;
(i) Provide programmes that support, encourage and feature the arts;
(j) Provide programmes that reflect the role of sport and recreation in New Zealand;
(k) Provide programmes that support awareness of business, commercial and financial

TVNZ will:
(a) Set the highest standards of programme quality, editorial independence and integrity;
(b) Comply with the Free-To-Air Code of Broadcasting Practice, which includes standards on violence and good taste and decency; and
(c) Comply with the codes relating to the level and nature of advertising, particularly that to
which children are exposed.

6. Innovation
To promote innovation in form and content TVNZ will provide programmes that display creative risk-taking and experimentation.

7. New Zealand Talent
TVNZ will support and promote the talents and creative resources of New Zealanders, including the independent television and film industries.

8. Presenting New Zealand Overseas
TVNZ will reflect New Zealand to the Pacific region and to New Zealanders overseas.

To suppose that all these functions will be provided by default in a digital multi-media environment and that, with some modest funding for local content, there is no longer any need for public broadcasting institutions, fundamentally misconstrues the nature and origins of market failure in the media sector. Indeed, such political naivety is akin to believing in the digital tooth fairy. The TVNZ Charter may be a failed experiment, and there is certainly a need to look at new ways of delivering public service outcomes in a digital multi-media environment. Indeed, it would now be political folly for any subsequent government to resurrect the notion of restructuring TVNZ as a dual-remit public broadcaster with a Charter. But it would also be culturally and democratically irresponsible for any government to reject the intrinsic desirability of the objectives listed in the Charter.

The political danger (or for some in the National Cabinet, the political virtue) of removing the Charter is that it politically tarnishes the legitimacy of any future effort to reintroduce public service principles into the New Zealand television ecology. In effect, the baby has been thrown out with the bathwater. Despite the flaws in the institutional arrangements and the contradictory dual remit, the Charter set out a set of normative guidelines- a moral compass, if you will- that had been conspicuously absent from the television ecology throughout the 1990s. If it was idealistic, it was nevertheless a benchmark against which we could gauge how far the commercial television system had deviated from any claim to operate in the interest of the public as citizens as opposed to the interests of consumers, advertisers and shareholders.

The Charter expressed society’s expectations not just for TVNZ but for the broadcasting system as a whole. Even backed by a paltry $15m, it was a nagging statement of public conscience for the sector as a whole; the civic superego moderating the drives of broadcasters’ commercial libido. As TVNZ 7 still demonstrates, a single public service channel can provide an alternative schedule and have increase audience expectations of programme quality and diversity. The fact that the Charter pointed out the gaping holes in the ideological fiction that deregulated free markets will provide us with everything anyone could ever want from broadcasting is perhaps a key reason for the hostility it generated from the political right. But before the politicians, bureaucrats and broadcasters opposed to the Charter smugly congratulate themselves on its demise, they might consider whether New Zealand is likely to be well-served by a reversion to the commercial excesses of the 1990s and whether their children’s and grandchildren’s only legitimate media aspiration is a premium subscription to Sky. The TVNZ Charter set-up may not have been the right answer, but the question of market failure in the broadcasting system that it was intended to address still remains.

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