Why Newshub Failed.

Too Small To Survive: Was it ever realistic to believe that two commercial television networks could profitably share such a tiny market?

TO UNDERSTAND WHY NEWSHUB FAILED, it is necessary to understand how TVNZ changed. Up until 1989, the state broadcaster had been funded by a broadcasting licence fee, collected from every citizen in possession of a television set, supplemented by a relatively modest (compared to present levels) amount of commercial advertising. This arrangement reinforced both the public character and the public obligations of the state broadcaster. As the network’s primary funders, the viewing public constituted TVNZ’s most important clientele. These were the citizens to whom TVNZ’s professional broadcasters believed themselves accountable.

And then everything changed. The Broadcasting Act (1989) transformed TVNZ from an entity dedicated to serving the public, to an entity legally required to conduct its affairs in the manner of a private company. The Broadcasting Licence Fee survived (until it was finally abolished in 1999) but under the new act the funds it raised were funnelled into NZ On Air – a body whose hi-falutin objectives would be forever compromised by its obligation to first obtain a commitment, from what were now commercial broadcasters, to screen the productions they were being invited to commission.

This was a devastating Catch-22 for all those producers and directors dedicated to producing high-quality television programmes. Why? Because before switching-on a single camera, they had to satisfy TVNZ – and later TV3 – that the product they were pitching would deliver the right number of eyeballs to the right number of advertisers. It didn’t really matter to the executives compiling the broadcasters’ schedule if the proposed programme was topical, powerful, much-needed, or culturally outstanding: what they needed to know was whether it could meet – or exceed – the opportunity-cost of not slotting-in a high-rating/high-earning programme in the schedule upon which the production house was asking to be placed?

What this meant was that drama and documentary features – the most expensive to make – had to work so much harder than the makers of the relatively cheap “Reality TV” shows in order to secure that all-important sign-off from the networks. Once those same networks saw how well Reality TV rated, the difficulties confronting the makers of programmes not tailored to the tastes of “ordinary viewers” became practically insurmountable.

For the Minister who drafted the Broadcasting Act this was not a bug, but a feature. Richard Prebble wanted his new State-Owned Enterprise, TVNZ, to tailor its production and its schedule to the signals it was receiving from the entertainment marketplace. The commercial enterprises with advertisements to place before the network’s viewers’ eyeballs, the enterprises now funding the networks’ running-costs, would, henceforth, be the ones sending the most important signals. But the viewers who rated the shows in which the ads were being broadcast, they sent signals that were only marginally less important.

The signals communicated to the networks’ schedulers and programme-makers by viewers could hardly have been clearer. They liked to watch programmes in which one group, or multiple groups, of people were pitted against each other in a highly competitive environment. They lapped-up the nastiness and pettiness that such environments elicited. They relished the betrayals and laughed at the tears. Ancient Rome knew the type – they had filled its amphitheatres and cheered-on its bloodiest gladiators.

Those programme-makers who believed the public deserved something better than these crude theatres of cruelty were scorned. The schedulers demanded to know why they thought their product was superior to the output of Reality TV. Wasn’t it just the teeniest bit elitist, they inquired, to think that your sort of television – which rates like a dog – should take precedence over shows that rate through the roof? Who are you to tell the people what they should be watching? Who are you to defy the rough-and-ready democracy of the remote control? Cultural snobs – that’s who!

There were those who watched, as TV3 attempted to carve out a profitable niche in this increasingly cut-throat broadcasting environment, and shook their heads sadly. New Zealand was a country with a population smaller than Sydney’s – so television’s infamous “money trench” was never going to be all that big. Which raised the questions: Was it ever realistic to believe that two commercial television networks were going to profitably share such a tiny market? Wasn’t it inevitable that one network would claim the lion’s share of viewers and revenue; while the other was condemned to fight off every hungry hyena and vulture for the rest?

It is not well understood (outside broadcasting circles) just how viciously TVNZ fought, from the very beginning, to be the network that claimed the lion’s share. It fought TV3 every single inch of the way: moving heaven and earth to head it off at every conceivable strategic pass; competing with it aggressively for every pair of eyeballs; scheduling against it with ruthless precision.

Ever since 1989, the truth of the matter has been that it was TVNZ that behaved like the rapacious capitalist television network, and TV3 that strove, against all the odds, to produce programmes that had something more to offer than carefully contrived schadenfreude. This weird reversal of roles is attributable to the fact that, from the very beginning, TV3 was driven by the sort of cussèd under-doggery that always brings out the best in New Zealanders. It was the founders of TV3, not the administrators of TVNZ, who believed most fervently that, given the chance, Kiwi broadcasters could astonish the world.

(Which isn’t to say that there weren’t broadcasters in TVNZ who shared their TV3 counterparts’ faith in the possibilities of television, merely that in the years that followed the passage of the Broadcasting Act (1989) they were purged from the TVNZ payroll with an efficiency that would have made Stalin proud.)

Perhaps the saddest part of the lopsided battle between TVNZ and TV3 is that it simply never needed to have happened. The answer to the problem posed by two competing commercial networks in an advertising market as small as New Zealand’s was always blindingly obvious. Turn TVNZ into a genuine public broadcaster. That is to say, a state-owned, commercial-free, broadcaster, paid for by redirecting most of the taxpayer dollars currently funding New Zealand on Air. That would leave the television advertising market, which, even in this digital age, remains large enough to support one (carefully managed) private television network. (Especially if the Government waived its transmission charges.)

Imagine, then, a scene reminiscent of the prisoner exchanges between Ukraine and Russia. All the hard-nosed bastards who regard Reality TV has high-culture trooping in a body from TVNZ headquarters to the studios of the newly resurrected private network. While moving past them, in the opposite direction, go the mavericks, the dreamers, and the journalists who still understand the meaning of the word. All of them eager to claim their place in the genuine public broadcasting network that should always have been their home.

This essay was originally posted on the Interest.co.nz website on Monday, 4 March 2024.