Is NZ TV Toast?

Today MTV Networks (Owned by Viacom) announced it
was closing its office in New Zealand. The company is Sky Network Television’s
largest external content contributor representing the MTV, Comedy Central,
Nickelodeon, and Nick Jr Brands.


Upwards of 23 staff will lose their jobs in the decision to
consolidate the company’s New Zealand operations with its Sydney Australia
. This closure is just the latest in a string of offshoreing by Sky
associated Brands. The Discovery Channel’s operations are also to be merged
with Australia in the coming months, and Prime (also owned by Sky) laid-off a
number of employees after sending the majority of its Prime News operation back
to Sydney.


With all these moves to consolidate and migrate
our Kiwi networks to Australia it does raise the question. ‘Can New Zealand
based channels make a profit on the Sky, and Telstra Platforms, and if not,
does pushing jobs overseas have an effect on how kiwis are seen on screen, at
home. And finally, could sending these jobs overseas actually be better for Sky
Subscribers in NZ.


The trouble for NZ pay networks is that most
don’t handle their own advertising and are paid by Sky for how many, or what
percentage of audiences their Channel attracts. Now this was all good back when
Sky had about 5 Channels and most of them were fairly nasty, but with the
proliferation of new channels to the platform (not to mention the different way
of viewing content – iSky is another classic example), audiences have become
more and more fragmented so even if you are fortunate enough to control your
own advertising, advertisers will want to pay less because you have less
eyeballs on your programming.


With Sky running what is largely considered a
monopoly, most non-Sky owned channels operate in an environment of fear, Sky is
their largest source of Revenue, and in some cases their only source. Some
channels like TLC and Bloomberg have survived outside the Sky Nest on Telstra,
but this is somewhat a moot point given they aren’t NZ based anyway, and with
only 40,000ish subscribers TelstraTV is hardly a bread winner
(and let’s not mention with TiVo).


Sky TV’s argument will no doubt be that any job
and Kiwi content losses are negated by the addition of new channels and more
niche content, but they might just be cutting of their nose to spite their
face. By removing more and more of the Kiwi look and feel the Network is
leaving little defining factors to persuade subscribers to pay their monthly
subscription fees when it is becoming more and more easy to download overseas
content for free, and this is before the rollout of ADSL2+ and the National
Broadband Scheme.


Speaking of government, you might argue that with
the Current one in a more harmonious relationship with Sky than any other before
it, Sky is beginning to take the proverbial P($$ a bit.’  Sky it seems has
never been in better shape, with Profits up almost 17% for the year ending June
2010. People are even spending more with average revenue per subscriber up
5.6%. Still it seems like many of the Company’s non-owned and operated content
providers have never been more under the gun. With that in mind you can’t help
but wonder if the likes of Julie Christie and her partners in ‘Food TV’ and
‘The Living Channel’ are looking to offload their interests to Australia’s ‘XYZ
Networks’, particularly given the similarities between the Kiwi offering and
‘LifestyleYou’ and ‘Lifestyle Food’ channels in Aus.


Sky V Hulu? 


There has been a long running discussion (we’re
talking years) of the possibility of Sky New Zealand merging with its
Australian counterpart FOXTEL. FOXTEL is 25% owned by Rupert Murdoch’s ‘News
Corporation’, which also owns over 40% of Sky in New Zealand, if this were to
happen it would no doubt be a serious blow for the New Zealand Television
Industry. Except for the job cuts, and small tidbits of original NZ
programming, the dropping of MTVNZ is probably no huge loss, MTV is if nothing
else, a network that prides itself on its homogeneity of content that can be
beamed into almost any country inexpensively, with a potentially huge financial
return. I’m more interested in the dialogue though. Firstly, do you care that
these channels are being fed in from Sydney, and secondly do you think people
will start asking the question ‘What am I getting here, and is it not better to
cancel my Sky Subscription and upgrade my Broadband connection?’

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  • reece_555

    Sky essentially just relays most of its channels anyway and contributes little to local broadcasting, sport the exception but this is profitable. If they were to merge with Foxtel it would proabably mean more cost to subscribers but more choice although TV Rights may be a barrier to this happening?, theres also less risk to broadcastng new niche channels over here. But what would happen to Telstra’s TV service would it merge too as Telstra owns 50% of foxtel? What operations did Discovery channel have in NZ it had an Australian voice over and promos had the australian website or are you refering to the specific feed such as Animal Planet with promos that feature both NZ & Aus times. It may be small comfort but I do prefer an NZ accent on our channels.

  • Yea I agree with reece about the Sport. Two of the main pulling powers that Sky has is the fact that it has Sport (particularly for unmatched presentation of Rugby) and movies. Before Freeview another plus was all free to air channels had perfect reception.

    The local content production with Sky IMO is not a big issue. They produce the Sport, which gives them the highest return. If Sky produced local content that is shown on Sky only is not going to either have high enough viewership or is not going to attract enough advertising. Why? Because not enough people are watching the specific channels at one time. For example Sky Sport produces the show Reunion which is shown live and in HD on Sky Sport, but it is only watched by 30,000-40,000 people.

    I do prefer a NZ accent as well, but the NZ personalisation that was shown on MTV and Comedy Central was nice I’m not going to write home about it leaving.

    Also, if Sky wants to produce local content they have wider access on Prime.

  • disappointed

    It came as no surprise really.
    Does someone know how many full time staff/journos for Prime News are based in NZ? Obviously the presenter/studio camera operator, but what about producers/control room staff/video operators etc? Cheers..

  • dex

    Prime News laid off their Camera Ops and Studio Crew, their reporters do Camera and Report (even Eric Young sets up his Studio Camera).

    I think they have 2 or 3 Reporters (including Barry Soper who only works part time).

  • reece_555

    Thats hugely grim essentially nothing left so is the Prime News operation just a satellite operation of Sky News even more so now, I thought it was under staffed before. What could be the justification other than greed Sky isnt hard up.

  • mary

    With all these moves to consolidate and migrate our Kiwi networks to Australia it does raise the question. ‘Can New Zealand based channels make a profit on the Sky, and Telstra Platforms,


    Id just like to point out that MTVNZ NZ was making quite a substantial profit for such a small operation.

  • samofthewest

    Sad news about MTV NZ! Hopefully the changes will be minimal!