John Drinnan is media editor of the New Zealand Herald, New Zealand's largest newspaper. He has written about the media industry for the past 25 years and has a unique overview of the deregulation policies in this sector. In an interview with Werbewoche, he reports on how this system has revitalized the media landscape and also made global cinema successes possible - but also how the government is starving out a radio station it doesn't like.
WW: 25 years ago, New Zealand abandoned the old broadcasting regime, which was based on the model of the British BBC, and instead introduced a strongly private sector-oriented regime, particularly in the television sector. Compared with similar countries and taking into account the general changes in the TV business, is New Zealand generally better or worse off with this approach? In the eyes of the audience and in the opinion of critics and producers?
John Drinnan: I would question whether the restructuring was actually aimed at private entrepreneurship, although that was the premise at the time. Rather, it was to emphasize the market as a control mechanism in broadcasting, thus emphasizing self-regulation rather than government regulation. The new policy 25 years ago ended a long and convoluted process of granting broadcasting licenses to new applicants based on the subjective suitability of the applicant. This was outdated and resulted in new offers to consumers being delayed and limited. And it would never have been able to keep up with the pace of change in the 21st century. The positive aspect of the new policy was that - at least initially - a significant amount of local content made it to the screens. The then newly created broadcasting commission, NZ on Air, became the intermediary between producers and broadcasters and unleashed a great deal of creativity. This independent spirit has since been reined in - but the internet has once again opened up numerous new possibilities. Critics - that is, media critics - were initially harshly negative about commercial fare funded by taxpayers' money. But with the growing number of entertainment options, free-to-air television now has a lower profile anyway.
So when journalism researchers here in Europe conclude that New Zealand's media policy is associated with many disadvantages, such as the strong commercial orientation, news programs of low quality and with little diversity, that the funded productions are often broadcast outside of prime time and that there are not more national program productions: To what extent are they right or wrong?
From a New Zealand perspective, these claims are partly true and partly false. The problem is rooted in the small scale of the New Zealand market and the expectation that investors should be able to make a return from programs in one form or another. Broadcasters and NZ on Air are both only focused on content that reaches enough of an audience for advertising to contribute to production costs. Much of the production costs are paid for by NZ On Air and they have to go to extraordinary lengths to add cultural value to meet their own targets. It is true that there is an effort to put truly valuable - a subjective word, I know - content outside of prime time, but that is the only way to make money. Overall, however, there has been a significant increase in local content, without the need for a legal quota. The quality of this content, however, is an open question.
In retrospect: What could have been done better in shaping the change?
As I said, the main positive aspect is that independent producers can get funding from NZ on Air, which has put them in a better position with the stations. In the meantime, the stations are reasserting their power. All shows funded by NZ on Air must have a guarantee from a station that they will actually be broadcast. The biggest shortcoming - and this is partly due to the small size of the New Zealand market - is that NZ on Air has become a funder for the media industry rather than pursuing its original role as a cultural institution. As broadcasters have no social or cultural obligations, producers and NZ on Air focus on the commercial success of shows, often taking their cue from overseas program formats. Just as broadcasters are focused on ratings and advertising revenue, NZ on Air is focused on calculations based on audience numbers and popularity to prove its performance to the government. Niche programs or intellectual or cultural content are neglected.
What have been the most important changes in media policy since the reform and what effect have they had?
There have been various aspects of a healthy laissez-faire policy towards the media in order to protect business profits and prevent political influence on content. However, this has led to self-censorship in the media itself. For example, there has been a significant loss of satirical content in recent years. There is a continuing skepticism about the 1989 reforms among some sections of the public - usually older people and/or the left - while the right supports the laissez-faire capitalist approach to broadcasting. Critics of this policy have argued vehemently that there is a need for a non-commercial TV station that "deals with viewers as people, not consumers". And indeed, for a period of five years there was a state-funded non-commercial channel, TVNZ 7, which was abruptly abolished when state funding ran out. Politicians from the right and left were openly close to the dominant pay TV company Sky TV - formerly owned by Murdoch. Two decades without pay TV regulation slowed the arrival of new competitors. However, there has recently been an influx of SVOD (subscription video on demand) service providers and many believe this will stimulate competition.
A few years ago there was a discussion about re-establishing TV1 as a public broadcaster, arguing that a system with a broadcasting commission like NZ on Air could not replace a public broadcaster. Where did this discussion lead and what is still going on in this regard?
This comes and goes - and is a real reflection of the concern that the focus of the media - including state media - is on consumer activity and not on ideas or on 'culture'. I would argue that the notion of a non-commercial TV One is highly unlikely to be realized, although there is still the possibility of running a digital channel should there be the political will to fund it. The commercial TV system has become dependent on NZ on Air funding and is lobbying hard - along with producer lobbyists - to discourage any attempt to touch its commercial direction. The latest campaign for a non-commercial TV station coincided with concerns over the freezing of government funding for the state-owned national radio station Radio New Zealand. And as mentioned, support for public service broadcasting is perceived as a left wing concern and is given short shrift by the conservative National Party government, which was the driving force behind the deregulation movement in the 1990s.
To what extent does it seem advisable for similar countries, especially in Western Europe, to adopt the New Zealand model of broadcasting regulation?
I'm generally cautious because I don't know enough about the specifics of each case. But as I said, the system has its advantages in opening up the bureaucracy to new ideas. The weaknesses in New Zealand lie primarily in the fact that deregulation here in the late 1980s was characterized by an orientation that the state was an inefficient and apathetic institution, while the market was better able to meet the needs of the public. In this country, the hand of the state is very light and one can argue that this is a good thing. But it has led to an ideological bias in all media. The concept of media regulation may now be irrelevant as the internet has led to extraordinary fragmentation and access to information is becoming greater and greater. In this case, it can be argued that the public funding system should promote minority values and cultural values and content that would not survive under a commercial system, rather than nurturing the commercial system itself.
Broadcasting legislation in Switzerland attaches great importance to ensuring that minorities receive the same level of programming as the German-speaking majority. New Zealand faces a similar challenge with its indigenous Maori minority. How has this been dealt with and how satisfactory has the experience been in this respect?
This was achieved through the determination of the Maori themselves, who are relatively well provided for. Twenty-five years ago, they fought the Crown Council in London to ensure that the state had a duty to keep the Maori language on television, for which a dedicated taxpayer-funded channel was set up. The funding and facilities for Maori are acceptable, if not lavish. And Maori tribal groups are increasingly able to run Maori TV autonomously. The station reflects the conflict between the traditional, conservative tribal authorities and the younger, liberal urban groups and fulfills an important role in this sense.
A crucial part of New Zealand's broadcasting regulation is the independent broadcasting commission, NZ on Air, which is funded by the government and whose role is to fund media productions that are deemed valuable to the country and that the private sector cannot or will not fund on its own, such as Radio New Zealand, the national radio station. How well does this body work?
The small size of New Zealand leads to the assumption that there are only a limited number of production companies capable of producing a television series. So the fact that many of the major productions are made by foreign-dominated production companies set alarm bells ringing. Eligible projects are selected on the basis of an unusual formula, whereby NZ On Air is not allowed to interfere with editorial or content aspects. As stations come under increasing pressure due to fragmentation, NZ on Air is becoming increasingly generous in funding expensive commercial projects, including overseas formats such as X-Factor [analogous to Musicstar on SRF], New Zealand's Greatest Talent and Let's Dance, on the basis that 'without our support they wouldn't be made'. In that sense, we are paying for New Zealanders to be turned into fodder for the advertising industry.
In 1999, the broadcasting license fee was abolished and NZ on Air has since been funded by the Ministry of Culture and Heritage. In discussions about such a concept, there is often a fear that politicians might take disciplinary measures against unpopular TV programs, for example by reducing the budget. Has anything like this happened in New Zealand? Or are there also voices that want a broadcasting fee again?
Too much of the licence fee has been wasted in the collection processes. In most cases you would say New Zealand's authorities are not corrupt, but the non-commercial Radio New Zealand has been financially starved because it is associated with the left. The state-owned non-commercial radio station has had its funding frozen for seven years and is now desperately hoping to have its budget released in May. There is a valid argument that state funding has paralyzed the entrepreneurial spirit and until two years ago the ongoing funding crisis led to a bunker mentality. Former bosses perceived the current government as the enemy and the government viewed RNZ as part of the left. RNZ is also hampered by the fact that it is based in the capital Wellington, while all commercial media are based in Auckland, the largest city. There have been allegations of interference in state TV over the years - but there have also been similar allegations that private sector companies have been treated more favorably.
To what extent has a deregulated broadcasting system encouraged innovation in the media sector? Are there links to the global successes such as the Lord of the Rings trilogy, Hobbit or Avatar, which are flagships for the performance of the New Zealand film industry?
Deregulation has created a production industry that first had to renew itself in order to provide high-quality content at low cost. As a result, film and TV skills became part of this infrastructure. But this should also be seen in the context of the neo-liberal changes in New Zealand with the rapid decline and waning influence of the unions that kept labor costs high. Peter Jackson [director and producer of the Lord of the Rings and Hobbit trilogies] and company are clearly very skilled, but they were backed by a strong government that locked out unions to keep costs down. There is a concern that New Zealand is now becoming less attractive to American productions because of the rising exchange rate, despite these continuing advantages, so the industry is under increased pressure to get more subsidies.
The public broadcaster [SRF] is criticized here for spending horrendous amounts on broadcasting rights, for example for Formula 1 races, which are financed by broadcasting fees. How is this aspect dealt with in New Zealand, for example when broadcasting the America's Cup or matches of the national rugby team?
Apart from rights for specialty sports, NZ on Air does not participate in this genre and in fact New Zealanders are often forced to pay for pay TV channels to watch the national sports teams play. While some games are shown on the free-to-air channels and coverage of the America's Cup has always been free-to-air, rugby matches are not. This is seen as one of the biggest failures of the system, along with the fact that successive governments have not done anything about it as they have supported the pay-TV broadcaster Sky TV, which holds the pay-TV monopoly, above all else. The issue is becoming increasingly complex with the growth of new video-on-demand services for individual sporting events.
In Switzerland, great emphasis is placed on the need for citizens to be informed about political issues so that they can decide at the ballot box. How do these types of programs thrive in New Zealand's deregulated broadcasting environment?
There is new media enthusiasm for politics in an election year and the impression is created that politics is being discussed, but the commercial broadcast media largely focus on the election campaign between the parties. There are superficial panel discussions where the party bosses debate. But the coverage of politics is Boulvardesque and focuses on the trivial.
How is it possible that New Zealand, which is roughly the same size as the German-speaking part of Switzerland, can finance major TV productions such as dramas or documentaries with advertising revenue?
The aim was to enable producers to sell their productions abroad and use the proceeds to make the production viable here. For both TV and independent films, the focus has increasingly shifted to co-productions abroad, where incentives and government investors can be approached. New Zealand's advantage lies in its lower costs, especially compared to the USA or the UK.
How happy is the advertising industry with an environment that can be described as an Eldorado?
It's a kind of El Dorado. Advertisers are trying to cope with the rapid fragmentation of the media market by booking non-traditional media. Overseas franchises such as X-Factor and New Zealand's Biggest Talents have been the most obvious cases of widespread product placement and joint trading with advertisers. Sports sponsorship is also still very important and there are many opportunities for this, but I have the impression that this is no longer as lucrative as it was.
Interview: Christoph J. Walther
New Zealand at a glance
Land: two islands in the South Pacific with mountains like Switzerland, but also volcanoes and beaches
Population: 4.5 million, of which 74 % European, 15% Māori Aboriginal, 12% Asian, 7% Pacific Islander
Government: independent parliamentary monarchy based on the British model, but without a House of Lords. Two very large parties: the National Party, a center-right, conservative people's party and the Labour Party, a center-left, social democratic people's party. There are also a number of other smaller parties, six of which are represented in parliament and can sometimes be decisive in decisions.
Television:
1. free-to-air
Public broadcaster: Television New Zealand, TVNZ, with mainly two channels: TV One and TV2. Dominant market position; financed by advertising, pays dividends to the state.
Māori Television: A separate TV station is operated to revive the culture and language of the Māori indigenous people.
private: TV3, FOUR, owned by MediaWorks New Zealand, which in turn is owned by an Australian investment company.
2. pay television (pay TV):
Sky-TV (independent of the TV channel of the same name in the UK): Started in 1990 with a range of three channels and today offers a basic package with numerous additional packages (films, sport, music, etc.), which are transmitted digitally terrestrially and via satellite. It is therefore comparable to the offerings of local cable TV operators.
Radio: Radio New Zealand is a public service station funded by the state. There are also private radio stations, which are often grouped together in networks. Residents of New Zealand are allowed to operate their own radio stations with a free license, but these may only have a low transmission power (less than 1 watt), which is often used for community radios.
Freeview: A non-profit joint venture for the digital transmission of radio and TV programs operated by the main free-to-air stations.
NZ on Air: A government-independent authority for the financing of content for radio, television and new media. Since the abolition of the license fee in 1999, the authority has been funded by the Ministry of Culture. The annual budget is currently NZ126 million$, of which 82 million is spent on national TV productions amounting to 877 hours and 32 million on public radio.
Series of articles on media policy
Media policy is increasingly becoming the focus of political attention, particularly in view of the foreseeable public service debate in the Swiss parliament. This debate must also be initiated and supported by the media industry in the broadest sense. With this series of articles, Werbewoche aims to contribute to a well-founded discussion.
These articles have been published in this series so far:
- "No help without a foundation", Werbewoche 05 | 13.03.2015, page 24f
- "From leading medium to stopgap?", Werbewoche 06 | 27.03.2015, page 22
Website for the article series: www.medienwende.ch
