Case in support of the N.Z.B.C.

Press, Volume CXII, Issue 32903, 29 April 1972, Page 17

Case in support of the N.Z.B.C.

(By

MORAG MOORE)

The New Zealand Broadcasting Corporation has provided a broadcasting service in New Zealand for more than 40 years, a television service for 11 years. Its resources, financial and technical, have contributed substantially to the development of the country’s musical and dramatic arts and other cultural pursuits associated with broadcasting; and, more recently, the N.Z.B.C. has given substantial grants to the regional orchestras.

This “benevolent monopoly” of the N.Z.B.C. has been broken by the granting of warrants for private radio stations; it is more seriously threatened by the claims of powerful commercial interests to run the second television channel.

Clearly this is a time for the public to take a close look at the record of the N.Z.8.C., and to examine the implications, for the public interest, of present Government policy. The N.Z.B.C. is a public corporation, a public utility, in which every owner of a licence is a shareholder. In spite of suggestions to the contrary, it is a non-profit-making organisation; surplus revenue is used for capital development within the corporation, in the interests of its listening and viewing audiences, or for the promotion of the cultural arts.

First threat The first threat of competition for > the N.Z.B.C. was posed in 1966 by the “pirate” radio station. Radio Hauraki. The corporation was at this time empowered to invite applications for warrants for private radio stations, subject to its own inquiry into the extent of existing broadcasting services, and any established need for new stations. In 1968 this responsibility was taken over by the Broadcasting Authority of three, appointed by the Governor-General on the recommendation of the Minister of Broadcasting, to “consider and adjudicate upon applications for warrants to establish and operate broadcasting stations.” The authority is also bound by act of Parliament to “comply with the general policy of the Government . . . and with any general or special directions given by the Miinster . . . ” Within five months the : authority (the members of i which had- expressed theiri opinion that there was a) place for private radio in New Zealand) had received, no fewer than 75 inquiries into the procedure for obtaining a warrant to operate a private radio station; and the first warrants were issued

in March, 1970, to Radio Hauraki and Radio i in Auckland. Warrants to Radio Waikato, Radio Whakatane, and Radio Otago have since been granted.

New application The authority granted a conditional warrant to the Avon Broadcasting Company, which applied in April last year for permission to establish a privately-operated radio station in Christchurch. The N.Z.B.C.’s appeal to the Supreme Court against the decision was upheld by the Chief Justice (Sir Richard Wild); but the Avon Broadcasting Company has now submitted a new application. Meanwhile, objections by the N.Z.B.C. against private radio stations are being heard in Wellington, Napier and Tauranga. The advocates of private radio point to the supposed advantages of competition in this field, and assert that it will provide for sections of the population as yet not cater'ed for by the N.Z.B.C. The argument is supported by promises of “easylistening music” appealing to middle-of-the-road tastes in the proposed programmes, but the Avon company has also promised to supply the Civic Orchestra with finance from a community fund of $4OOO, set aside from its profits for a period of three years.

No evidence There is no evidence to suggest that private radio, as a financial investment, is likely to be as profitable as this would seem to imply. Radio Hauraki (N.Z.), Ltd., ■made a net profit for its ! first six months (to March |3l, 1970) of $75; in its first 'full year (to March 31, 1971) it made a profit of $1331 on a capital of $240,500, yieldjing an earning rate on shareholders’ funds of 0.05 per cent for the year. Although the N.Z.B.C. has not suffered financially from the competition of private

radio as much as was originally feared, the effect, of inflation has become increasingly serious; the corporation may soon be faced with its first deficit in place of the usual surplus revenue, largely because of increased operating expenses and rising wage rates.

The N.Z.B.C.'s sources of income are licence fees (approximately 40 per cent) and commercial advertising revenue (approximately 60 per cent). An increase in licence fees would be unpopular and would require Government sanction, which might be withheld; increases in advertising rates are subject to the economic law of diminishing returns and probably would give little relief. The fact that it is the consumer who ultimately pays for advertising, whether on public or private radio stations, raises in a special way the question whether New Zealand can afford competitive broadcasting, especially when it has yet to be shown that the programmes of the private stations complement, and not merely duplicate, those of the N.Z.B.C.

Four businessmen In October, 1969, the then Minister of Broadcasting, Mr Adams-Schneider, called for an inquiry by the Broadcasting Authority into the extension of television services—the need for a second channel, and the methods of introducing one. Subsequently, four of New Zealand’s wealthiest businessmen (Sir James Doig, Sir James Wattie, Sir Clifford Plimmer, and Sir Robert Kerridge) united as sponsoring directors of the Associated Network Group, which became the leading contender for a second television channel.

The group later decided not to apply for a warrant, but the Minister of Broadcasting (Mr Walker) has stated that at, least two other parties are interested in obtaining one. The N.Z.B.C. will also apply for a warrant to run a second channel, alternative and complementary to the present one; and it has said that this channel will not carry advertising. Those who maintain that competition in television would give a choice of proprammes and lead to programmes of improved quality are not supported by the experience of independent television in Britain. On the contrary, the struggle between stations under the Independent Television Authority and those of the British Broadcasting Corporation has led to much dissatisfaction among viewers, who complain that the stations competing for the audience endeavour to match a programme on one station with a programme of similar type. Thus the claim of the Associated Network Group, that there need be no difficulty in providing a service that was both competitive and complementary, can hardly be taken seriously.

“For the birds” The managing director of 8.8. C. Television, Mr Huw Wheldon, has this to say: “That you can be, in the long run, both complementary and competitive at the same time ... is strictly for the birds. In terms of hard experience, it is a pipe dream ... It has always been in my experience, at best a pious intention, and generally, in fact, so much eyewash; and indeed has so proved.” Competitive television not only does not lead to programmes of improved quality; it leads to a reduction of time available for all programmes. The more intense the competition, the more time must be devoted to advertising. The N.Z.B.C. acknowledges the difficulty of satisfying all tastes, or at least of meeting all reasonable demands. A competing private television channel would exacerbate that problem, instead of alleviating it, allowing less time instead of more, to be devoted to minority or selective interests. Most viewers in New Zealand would probably agree that the biggest step forward in this country would be the introduction of a channel on which they could watch television programmes without the intrusion of advertisements. The entry of private stations into commercial television would relegate this possibility to the distant future, perhaps forbid it for ever. There is no reason to suppose that New Zealand private television would be allowed the commercial latitude enjoyed by some television stations in the United States, which feature advertisements for up to 50 minutes in an hour. But New Zealand has the opportunity now of establishing principles which will affect the nature of its television services for many years to come. It is important that these should be established in the best interests of the people, who will find television becoming an increasingly powerful influence in their homes, their schools, and even their places of work and play.