Broadcasting Minister Clare Curran is alarmed the previous government did nothing to address TVNZ's declining revenue, despite being warned about it by officials earlier this year, she says.
Clare Curran Photo: RNZ / Richard Tindiller
Treasury provided a report to ministers in February saying under current settings the broadcaster's revenue and profitability was in a long-term decline and officials did not see that improving.
The statement is part of an Official Information Act response posted on the Treasury website.
"Although TVNZ is looking for opportunities to further reduce its costs, the company has advised in its most recent quarterly report that some form of structural intervention will be required for long-term sustainability.
"This means that without structural change, ministers would eventually need to provide ongoing operating funding for TVNZ to continue broadcasting."
It also suggested the highest value commercial option for the shareholders of TVNZ would be to sell the company.
Former Finance Minister Steven Joyce, who was presented with the report when in government, said the main point Treasury made that all traditional media was in decline was a valid one.
He said the National-led government did not believe selling off TVNZ was the answer.
"We took the view that TVNZ had life left in it in terms of its traditional model provided it develops the online content, but there's no doubt that the old model of controlling distribution in the form of free-to-air television channels is changing.
Former finance minister Steven Joyce Photo: RNZ / Rebekah Parsons-King
"As we all know we are dealing with online content. That has implications for the provision of content, who gets to distribute it, who gets to control it and while for the most part that is good it does bring challenging situations to organisations like TVNZ."
However, Ms Curran said the government had been left with an organisation that had been neglected and had no ministerial oversight.
"I feel some alarm at the strategic challenges that the previous government was aware of and did nothing about.
"[We'll be] seeking some urgent advice from Treasury and we'll be wanting to explore a full range of options from talking to officials and also the board of TVNZ as to approach its strategic challenges.
"There's no doubt that this is a challenging environment for all media, but to have that advice provided to government and - it appears - it was pretty much ignored, is somewhat alarming."
Ms Curran said the government would not sell TVNZ.
TVNZ building Photo: Wikimedia Commons / Gabriel Pollard
In a written statement, TVNZ said its market was being fundamentally disrupted by global competitors, advances in technology and the changing viewing habits of New Zealanders.
"The big focus last year was creating a more sustainable future, including redesigning TVNZ's organisation structure, renegotiating core content agreements, and writing off unsustainable content and accommodation lease commitments.
"This frees us up to put more investment across all screens in local content - our sustainable point of difference - and to accelerate growth in our online business.
"The 2017 financial year started with accelerated declines in the TV advertising market and ended with TVNZ delivering year-on-year growth in TV revenue.
"TVNZ is actively exploring potential growth opportunities and will continue to consult with its new ministers on these matters."
