Doubts on profits of third TV channel

Press, 12 March 1985, Page 9

Doubts on profits of third TV channel

Doubts about whether a third television channel would be profitable were expressed by the chairman of the Broadcasting Corporation, Mr Hugh Rennie, in Christchurch yesterday. Mr Rennie also said that the quality of programmes shown on Television New Zealand would suffer with a third channel, because of the reduced advertising revenue available to pay for local programme production. Between $5O million and $7O million in advertising revenue would be needed to run a third channel, he said. About $25 million could be drawn away from TVNZ, although it was hard to say where the remainder would come from. If the shortfall was taken out of the advertising market, several daily newspapers would close and some private radio stations would be threatened.

“It is really for the public to say whether that is acceptable.” Demands were placed on State-owned television to provide for minority audiences, educational television, and regular local coverage. r*

“A third channel will not do much for these,” he said. Because TVNZ had a monopoly at present, it was able to obtain overseas programmes at a reasonable cost. These costs would go up with the entry of a third channel. “It will have some impact on the activities of the Broadcasting Corporation. Advertising revenues will go down, and the costs of overseas programmes will go up.” A third channel would impede “constructive programming” of shows such

as “Koha,” which was unpopular initially but had increased its audience by four times, to 400,000, because it was shown at prime time.

Local productions would also suffer, because it was much cheaper to buy them from overseas. Mr Rennie said that the Broadcasting Corporation should not buy into private television companies. However, there was a precedent for State-owned enterprises investing in the private sector, as Air New Zealand had bought 25 per cent of the Mount Cook Group. He criticised newspaper companies that were investing in private television to increase their profitability, rather than because of any interest in what was screened on the third channel. Mr Rennie said that Christchurch was a key TVNZ production centre where many new ideas, such as Teletext and the TVNZ shop, had been started. The TVNZ shop, opened late last year, had made more money in its first five weeks of trading than had been expected in its first year, and other shops would be opened throughout the 5.