Hard News by Russell Brown


The Soap Opera

It's nice to see Bill Ralston back in the workforce, although I wonder when his respective editors at The Listener and the Herald on Sunday realised he'd be starting new columns for each of them on the same day.

Ralston kicked off for the HoS with a lengthy piece headed What's Eating TVNZ?, which the paper spun off into a news story - also quoting the man who hired Ralston as TVNZ news chief, Ian Fraser -- under the headline PM blamed for turmoil at TVNZ, which summarises Ralston's column thus:

Ralston says TVNZ has been treated as a "political football", and that Clark's "aversion to paying presenters large salaries has cost the company tens of millions of dollars and has been a major factor in bringing the place almost to its knees".

In 2004, Clark commented directly on TVNZ pay negotiations, saying the broadcaster had made a "spectacular mistake" increasing Judy Bailey's pay to a reported $800,000. Clark had earlier commented on Holmes' salary.

Ralston says Clark's opinions heavily influenced contract negotiations which led to Bailey leaving. This created an environment of instability which contributed to Holmes moving to Prime, and a well-publicised scuffle over Wood's pay and her later resignation.

Yes, those people again. Ralston writes in his column:

Now, I know you all want to know the inside gossip on Judy Bailey, Paul Holmes and Susan Wood and I'll get to that …

No. No, we don't actually, and that's the problem. Some of us would rather move on from the employment negotiations of a bunch of highly-paid baby-boomers. We're actually quite glad the TVNZ soap opera is on hiatus.

So Ralston's contention is that the bad PR from a series of unhappy employment contract negotiations, in which politicians had too much to say -- Holmes, Bailey, Wood -- is what fatally damaged the news operation's public image and led to the slump in ratings.

I'm not so sure. The big reversal in the news battle with TV3 came in 2005: Claire Trevett's Herald story from February 2006 charts a ratings annus horribilis. What happened? Some of it was business as usual: TV3 had been steadily picking up Auckland news viewers, and the 18-49 demographic, for some time.

Bailey didn't depart until December 2005, but let's give Ralston his point that public disquiet over her $800,000 salary and the surrounding kerfuffle with the TVNZ board damaged viewer perceptions somewhat. And that, by presenting Paul Holmes with a one-year contract and precipitating Holmes' departure, TVNZ opened a gap for Campbell Live, which had the unexpected effect of helping TV3's 6pm news ratings.

Yet Holmes' poor showing on Prime demonstrated that the audience was loyal to the 7pm slot on One, not to Holmes himself. And it's very hard to say that Susan Wood's departure had any negative impact, with the Sainsbury-fronted Close Up not only objectively better, but rating quite well (In June last year, One News looked to have clawed back some ground, while recent figures find Close Up down on a year ago with its target audience, but clawing back ground over the past five months). But, Ralston notes of Wood's controversy:

This fiasco damaged poor Susan's reputation, hit Close Up's audience and, I think, was a big part in her sad decision to quit a year later, exhausted and discouraged.

Yes, and I'm sure that Maia is really sad about Jay being offed by the Shortland Street serial killer and everything - but can we just move on now?

"Why am I raking up the past?" Ralston asks rhetorically.

Um, because you don't have much new to say?

Because I see the same thing happening again. The Government is keen on Freeview and consequently TVNZ is sinking huge bucks into digital TV with little hope of ever getting much of a financial return. To do this it's getting deeper and deeper into debt with the Government, becoming far too reliant on government cash, rather than its advertising revenue. This means it's now much less independent and has to be more responsive to what the politicians want.

It's also cutting costs to try to fund the expensive digital strategy. This has led to big job losses and rock-bottom morale, propelling many surviving staff into the more tranquil waters of TV3 because they don't want to stay with TVNZ anymore.

We're in for years yet of Freeview-bashing, but let's be clear what we're talking about here. Staying put on analogue television was not an option: quite soon it will be quite difficult to maintain the old gear, let alone buy it new. TVNZ has been tapped by our government and given $80 million (effectively, having its last dividend handed back) to do the same job the BBC did in Britain, albeit with vastly greater resources: be the anchor tenant for a free-to-air digital TV network.

All developed nations are making decisions about how they manage the digital migration. In Britain, Freeview seems to have worked quite well. It has more viewers than Sky and overall 80% of free-to-air television is now watched on a digital platform. They can seriously look at switching off analogue transmission, and freeing up a lot of spectrum, as soon at 2010. In Australia, a regulation-heavy strategy has left them stuck on 30% uptake. So the Freeview model seems a reasonable bet.

Meanwhile, TV news viewership is at its lowest in seven years. People are getting more of their news, as it happens, via the internet. (At the Great Blend in Auckland I asked for a show of hands on who watched broadcast TV news more than three times a week. From a crowd of 300, not many hands went up.) In the most recent Nielsen Media Research survey results, the internet activity to show, by far, the most growth, was watching video clips. And you can take those trends and double them for the advertiser-friendly 18-39 demographic.

Internet news service is something TVNZ current does quite poorly, despite having plenty of good content. But I hope those responsible are treating it as something more than the annoying distraction that Ralston seems to see it as.

Ralston also regards the present management as just another bunch of dupes who'll lose their heads when they fail to meet the board's performance targets, or when the government changes. I think he's missing a few things. The development and launch of tvnzondemand and the creation of TVNZ 6 and 7 have been pretty efficient. The wholesale loss of staff from Breakfast to TV3's forthcoming Sunrise has been fairly bizarre, but it would be wise to wait and see whether TV3 can actually turn a dollar out of a shared break TV audience, which was small enough anyway, before declaring a disaster.

The comparison with the Fraser era is telling: that was marked by some awful recruitment decisions -- which did far more damage than the flaps over star salaries -- and a damaging bout of feuding with major independent producers. Given TVNZ's long history of scorched earth and policy reversal under successive management regimes, the shift under Ellis has actually been fairly civilised. The likes of John Barnett -- whose company has done incredibly well for TVNZ -- are welcome back in the building, and seem comfortable being there. The endless discussion over rights issues continues, but it appears to be businesslike, rather than bitter, in tone.

But oddly enough, I agree with Ralston and Fraser's key points: TVNZ can't have the Ministry of Culture and Heritage sitting on its shoulder forever. There are legitimate expectations of a public broadcaster in fulfilling public policy goals. Freeview, as noted above, is one example. But sooner rather than later, a clear, independent role for TVNZ must be established. That doesn't necessarily mean a split or a sale of part of the business: the present management's demarcation of "public value" and "commercial value" in its activities represents a reasonable way of managing its duties. But whatever solution emerges will come from solid thinking about TVNZ's future; not from a repeat season of the soap opera.

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