TVNZ’s chief executive Kevin Kenrick’s decision to stand down early next year could easily be construed as a vote of no confidence in the Government’s plans for the state broadcaster, writes Stephen Parker

TVNZ’s financial and audience performance during the past Covid-plagued trading year has been excellent, so why is Kevin Kenrick getting out now?

He’s been too professional to publicly express any opinions about his political masters or openly criticise the proposed merger between TVNZ and RNZ.

While never overtly defiant, there have been signs Kenrick held serious reservations about the Government’s plans for merging TVNZ and RNZ, and making both answerable to a new charter.

At the start of the year, Kenrick outlined to a parliamentary select committee his concerns about the practicality of meeting charter demands for niche programming while also being expected to deliver commercial outcomes to the Crown.

He has also regularly pointed to the direction and investment TVNZ was taking to secure a viable future.

Plenty can be read into the timing of his departure announcement.

The Governance Group, led by former New Zealand First MP, Tracey Martin, and working on the TVNZ and RNZ merger, has completed its business case. A Cabinet paper is due to be presented in a matter of weeks.

It could be that until now Kenrick couldn’t quite believe the Government was going to restructure, in the eyes of some, a perfectly viable operation. Seemingly, he’s reached a new conclusion.

From his perspective, this must look like poor reward for astute financial management and future proofing the state owned TV network.

TVNZ increased its operating revenue, and announced several weeks ago a $59 million net profit, paying the Crown a $15 million dividend.

In the commercial world, such achievements attract bonuses, rather than proposals for a Charter to bind a chief executive’s operating options. It’s certainly a counter-argument to retain the status quo.

In many respects, there is a gulf between the worldview of Auckland media industry heads and the Wellington-centric “beltway” policymakers.

The beltway justification will become clear soon, when Cabinet makes decisions and announces its Stronger Public Media project: merging TVNZ and RNZ and making both answerable to “Public Interest” imperatives.

Behind closed doors, Kenrick has probably resisted the proposals. He will have had an excellent gauge on the final option favoured by the Governance Group.

Having reached his own conclusions, Kenrick has looked at his future. It’s not at TVNZ.

Where are the Audiences?

And so, on to the timely NZ on Air 2021 survey conducted in April-May by Glasshouse Consulting. The survey asked 1420 New Zealanders aged 15+ about the media they used ‘yesterday’.

As in many surveys, different parties will select the data that suits them best. Yet it’s not unreasonable to view TVNZ as being in the box seat.

The audience survey reveals TVNZ is still defying the odds in the slow drain of the linear TV audience, just.

A trio of three big content providers – TVNZ 1, Netflix, and YouTube – are in a neck and neck tussle for winning the biggest daily audiences.

Remarkably TVNZ 1 has the highest overall daily audience reach of 41 percent but by the barest of margin, Netflix has grown its audience in the past 12 months to reach 40 percent. YouTube viewing has slipped to 40 percent.

We spend more time watching TV each day (118 minutes) be it through free-to-air TV or via the Sky TV platform. Yet we more frequently select online video to watch (YouTube and Facebook) each day, although view it for a lesser amount of time.

Either way, it’s premature to read TVNZ its linear last rites.

Out one door and in the other is TVNZ’s strategy.

NZ On Air’s audience survey has good news on two fronts for TVNZ’s strategy of trying to scoop up a greater share of the sinking TV linear audience and compensating by growing digital On-Demand. 

TVNZ 1 is our most popular linear TV channel, reaching 41 percent each day. Discovery Three’s daily reach has weakened to 20 percent. TV2, once a power house, achieved an abysmal 14 percent.

Yet what may look like a poor story for TV2 is nullified by TVNZ On-Demand, the most popular domestic on-demand site – reaching 17 percent of New Zealanders, compared with 3Now’s 5 percent rating.

This is significant, because TVNZ says the growth of On-Demand is now outpacing the decline in TV, both at an audience level and a revenue level.

In terms of news and who we trust, TVNZ also comes out on top. A very important metric during a Covid pandemic.

TVNZ News is the most widely used source at 50 percent and as trusted source scores 22 percent. That trust score is comparatively high. For example, Stuff is the second most widely used news source at 42 percent but scores low on trust at 10 percent. The NZ Herald scores 35 percent as a news source but slightly higher trust level than Stuff at 12 percent

Back of the pack sees Radio NZ as the fourth most trusted source of news at 9 percent, pipping Discovery Newshub at 8 percent.

Eye-catching is the changing habits of middle-aged viewers. There is a new trend – let’s call it digital, middle-aged spread.

As the researchers say, “there is no longer a single divide between younger or older audiences”.

The pattern for youth being heavy video and social content users has been very well documented over surveys during the past three years.

Previously, the younger were bracketed as digital and social media, the older were traditional and mainstream. This worried policymakers about youth disengagement.

Now it is increasingly blurred as the middle-aged start journeys of digital self-discovery.

The sons and daughters were early adopters of different apps and platforms but the Mum and Dads are following. They are no longer stuck in their ways.

That doesn’t apply to the grandparents, who remain habitually traditional print, linear telly, and radio users. This is what keeps the Herald’s printing press functioning, and pads out viewers and listeners for Hilary Barry and RNZ.

Dwelling on the middle-aged viewers, the pertinent question now is less about how do we lure the kids back and more about where are the adults going?

Just like politics, the commercial fate of many media rests with the centre. The screens their eyeballs view builds the audience and lures the those advertisers selling cars, real estate, and building supplies. They are also the ones more likely to spend on subscription services.

TVNZ looks in reasonable shape on a number of fronts and especially with On-Demand platform used in equal measure by all age groups.

“On-Demand platform/streaming, with a TV in the house has audience appeal evenly over age groups,” say the researchers.

And all the more interesting because it goes to addressing a rationale behind the Government’s public media work – how to stop young audiences from being disengaged from domestic platforms and content.

Kenrick has five months left in the job. It’s a shade early for writing up legacy assessments. But when the time comes to pronounce on his achievements, and there will be many, the emerging TVNZ On Demand platform is going to be near the top of the list.

Overall, what does all this mean for the public media case?

Yet again the media and audience landscape is shape-shifting.

And a don’t-mess-with-success argument has hardened for the TVNZ camp on the back of good corporate agility, strong financial results, high trust levels, and good audience pattern, particularly with the ramp up of On-Demand.

And It won’t be lost on Treasury officials who inevitably will argue against pumping more taxpayer money into public media reform when the trusted family wagon that TVNZ has proven to be is running sweetly.

The TVNZ chief executive has had a first-hand view of what is happening behind closed doors on the future for TVNZ and RNZ.

And he’s not sticking around for it.

Stephen Parker is a former political editor for TV3. More recently he was the Chief Media Adviser at MFAT, and also worked in the Foreign Minister's office of both National and Labour-led governments.

Leave a comment