Broadcasting finances

Jordan commented on public broadcasting a few days ago, suggesting that it would be a good idea to make TVNZ a wholly state funded public service broadcaster.

Broadly I'd agree with this idea, but I thought it would be interesting to look at the figures. The table₁ shows a (rough) comparison between public service broadcasting spend in NZ, Australia and the UK.

As you can see we spend less than Australia and a lot less, even after PPP adjustment, than the UK. In some ways we get better value for money - the BBC makes a lot of purely commercial programmes that simply compete with advertising and subscription funded broadcasters for ratings.

A difference between Aus and UK is that the latter, as most of you know, has a license fee - e.g. a compulsory subscription for BBC content. Australia funds the ABC out of general taxation.

What would it cost to have an advert-free, public service TV1 (and a fully commercial TV2)? Let's assume the $470mln revenues of TVNZ split $270mln to TV1 and $200mln to TV2. We'd be looking at $270mln to fund TV1 as it stands. However, given they would no longer need to chase ad revenue, they could cut their costs quite substantially - we could maybe have a watchable quality broadcaster for $120mln.

It would also be reasonable to assume that the pot of ad spending in NZ is constant - which would mean that if TV1 stopped taking ads, all the other broadcasters (including TV2) would be able to hike their rates - resulting in a revenue windfall.
So one option for additional TV funding would be a tax on ad revenue - if this raised $80mln, then taking $30mln out of NZ On Air would, with the TVNZ Charter money, neatly cover the costs of an ad-free TV1.

Now those on the right will no doubt argue that this would be a horrible confiscation of private funding - personally, I'd see it as a very reasonable amount to preserve our unique culture.

1. Recent spending on public service broadcasting (NZ$)

                Total    Per capita   Adj for PPP2
New Zealand           
 TVNZ Charter     133
 NZ on air        97
 Total           110          28      28
Australia
 ABC             890          44      39
UK
 BBC            7350         123      55

2. PPP adjustment based on the Penn World Table

3. The TVNZ charter amount is a notional figure from the annual report. In physical terms, I think this represents profit foregone by the New Zealand people that would otherwise have been made if TVNZ worked on a purely commercial basis.