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Snakes and ladders: TVNZ trumpets big earnings boost, but TiVo failure and equity loss take gloss off

March 24th, 2011 by StopPress Team

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TVNZ’s half-year numbers have been released and while the national broadcaster is understandably chuffed with a 136 percent increase in operating earnings for the six months to December, there are also a couple of fairly big wounds to lick after a $14.8 million TiVo misfire and an 18 percent drop in taxpayer equity.  

The country’s equity in the company fell to $157 million, compared with $192 million a year earlier and the company’s total assets fell by 23 percent to $231.5m ($301m in December 2009). Operating cashflow was $32.32 million, up $12 million, and capital investment fell to $4.59 million, down from $20.85 million.

But the big stat for TVNZ was the 136 percent improvement in operating earnings to $33.5 million, which was up from $14.2 million for the same time last year.

Chief executive Rick Ellis says the rise reflects continued cost management and strong advertising revenue (with TVNZ the main driver and beneficiary of the increase in TV ad spend and market share from 27.9 percent to 28.4 percent in the latest ASA figures).

Television advertising revenue for the half year was $163 million, an increase of $12.1 million (8 percent) on the same time last year, slightly above the total television advertising market growth of 7.6 percent for the same period.

Had it not been for the “one-off cash accounting adjustment of $14.8 million relating to share of losses and impairment of investment in Hybrid Television Services” (Hybrid is the exclusive licensee of TiVo products in Australia and New Zealand; TVNZ owns 33 percent and Australia’s Seven Media Group owns 67 percent) after tax profit would have been looking pretty sharp too. But as a result of the write-off ($9.8 million at launch, $5 million to prop it up later) that figure sat at $4.9 million, compared with $8.9 million for the same period the prior year.

TiVo is now worth nothing for TVNZ and Ellis told the Herald it was caught “by the dynamic changes in the marketplace”. But, despite what appears to be a distinct failure largely attributable to a confusing offer, an unattractive offer and Prime not handing over its listings, Ellis said TiVo sales had held up and says “looking forward, it has a great position”.

As far as highlights for the national broadcaster go, Ellis says by December ONE News had achieved its ninth consecutive month of year on year audience share growth and on the way had picked up the Qantas Award for Best News for the third year in a row. In total, TVNZ won eight of the 11 News and Current Affairs awards.

TVNZ’s online service was also acknowledged when tvnz.co.nz was voted Best Media Site at the People’s Choice NetGuide Web Awards for 2010.

While TVNZ felt these results were worth celebrating, Ellis says the celebrations were tempered by the effects of the Pike River mine disaster and the first Christchurch earthquake. But beyond the tragedies themselves, he says those disasters reinforced the role TVNZ plays in informing and bringing the country together “and were a potent reminder to every member of the company of the responsibility and importance of what TVNZ does”.

On the other side of that coin, some might say the recent smack on the hand after Close Up got a bit raunchy is a potent reminder of that, too.

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Tags: Media, revenue, Rick Ellis, TVNZ