RNZ-TVNZ public media shake-up: What you need to know

Explainer - Billed as the biggest shake-up of broadcasting in more than 30 years, the government is proposing to combine RNZ and TVNZ, its radio and television broadcasting companies.

But what is the plan, what is it aiming to achieve, how will it avoid making things harder, and what will it all cost?

RNZ is here to clear it all up.

Public Entity number 1

Public media means public service broadcasting, and it's usually funded by the taxpayer, with RNZ here in New Zealand, ABC in Australia, and the BBC in Britain. The idea is that trusted information can be provided - freely available to all - to keep the populace informed of what's really happening.

As per the announcement a fortnight ago, the government's proposal would see RNZ and TVNZ subsumed into a new organisation with a new (yet to be decided) name.

So far, it's just been nebulously labelled the "new Public Media Entity" or PME.

Its main features are:

• A single organisation (Autonomous Crown Entity) with trusted brands retained
• Its purpose: providing news and entertainment as a public service
• Editorial and operational independence protected by legislation
• It would also have a focus on under-served communities, particularly Māori, Pacific and young people
• Funding would come partly from the government, partly from advertising
• Ad-free programmes would remain that way, and content would be provided initially free of charge
• It operates as a non-profit, with any extra cash reinvested - it would not be allowed to build up large cash reserves
• It would not be limited to radio or television
• Civil defence emergency management lifeline utility functions would also pass to the new entity

Finer details on exactly what the new organisation will look like and how it will work have been a bit lacking, despite already having gone through more than two years of planning and three groups of consultants.

Broadcasting Minister Kris Faafoi has argued those details shouldn't be left to politicians - so he's leaving it to the (yet to be appointed) establishment board of the new entity to advise on.

According to the Cabinet paper, it would be required to report annually on its performance against its charter and other obligations, and regularly undertake audience research, with the charter reviewed every five years.

But why? And why now?

This Labour government has been planning to make changes to broadcast media for years, and it's gone through quite a process. Read more about the history of the proposal here.

But what's driving it? This is largely laid out in the Cabinet paper and the working group's business case.

First, most comparable countries have public broadcasters that offer radio, television, and online news, usually non-commercially. New Zealand has ad-free RNZ - largely focused on radio - and TVNZ, which operates largely as a commercial business. This is internationally unusual and the reasoning for keeping them separate is hard to justify based on medium alone.

The laws that govern RNZ and TVNZ respectively are also expected to soon be not fit for purpose - they primarily relate to radio or television content, but both organisations are increasingly focusing on an internet audience, where video and audio can sit alongside text and be part of a greater whole. The lines between these previously different mediums is blurring.

Another problem is money. TVNZ has been dominating free-to-air television viewing, but struggling to make significant returns to the government, with TV advertising revenue trending down in recent years due to a loss of television audiences. RNZ operates on a relatively small taxpayer-funded budget.

Both have been squeezed by the move to digital services, with a need to invest in online news and services where the audiences are increasingly going. The internet is also a complication for other traditional news outlets, with advertising revenue for newspapers diverted to online marketplaces like Trade Me, or tech giants like Google and Facebook.

Another concern for the government is living up to its Tiriti o Waitangi obligations, with the business case group concluding media has failed to sufficiently represent Māori perspectives and te reo. Other minority groups are also under-served and going elsewhere for their news, including young people - which poses a risk to the continued ability of RNZ and TVNZ to serve future audiences.

Amid all this, the proliferation of mis- and disinformation is also eroding trust in traditional sources of authoritative information, though RNZ and TVNZ remain the most trusted news brands in the country and New Zealand ranks highly for trust in news compared to other countries.

With that in mind, the government is keen to ensure New Zealand has a public media organisation that keeps the public informed - a basic building block of democracy - while also providing good bang for the taxpayer's buck.

Summing this up, the Cabinet paper says: "Current institutional arrangements are inflexible, inefficient, and disjointed, and the regulatory framework for TVNZ and RNZ is outdated and doesn't meet modern expectations. If structural changes are not made, New Zealand's public media entities will struggle to maintain current levels of public media provision, even with significant increases in public funding."

Funding and competition

Funding remains one of the biggest questions about the new organisation. All details about funding have been redacted from the documentation, and it's unclear just how much the finance minister would be willing to spend in the upcoming Budget, and where cuts may be made elsewhere.

Costs saved by sharing back-office services or infrastructure are unlikely to prop up the kinds of investment that would be required to achieve the PME's goals. Advertising revenue is also unlikely to be enough, especially with its public service purpose intended to override commercial imperatives.

With the PME expected to be doing a range of extra things and investing in new digital services, the government will need to fork out considerably more than in the past if it expects this project to succeed.

It's worth noting however that New Zealand's taxpayer spend on public media is low in comparison to other similar countries, with the business case noting the "overall public media spend per capita is relatively low and real funding per capita has been inflation adjusted but has declined steadily over the past decade. Public funding for local content has not kept pace with the cost of production".

However, a well-funded public media organisation muscling into internet news could pose a problem for commercial media companies, and raises concerns about a loss of competition in the sector - something Newsroom co-editor Mark Jennings said could be a roadblock for media businesses.

Media businesses could also begin relying on the PME's journalism rather than producing their own, which would lead to a loss of differing viewpoints and further erode trust in media.

For these reasons, some of the recommendations have included provisos that the new organisation be both competitive and collaborative: "a broad obligation for the entity to work collaboratively to support the diversity, capability, and sustainability of the broader media ecosystem, wherever this does not prevent it meeting expectations to earn commercial revenue".

Exactly how it will find this balance would be up to the charter, the final legislation, and the board.

The new PME would also be funded directly by the Ministry of Culture and Heritage, while NZ On Air would continue to provide contestable funding to other media - the PME would have contstraints on "its ability to act as a commissioning platform for content funded by NZ On Air - this would allow other public and private media greater certainty about the level of funding available to them".

It would be required to work collaboratively with NZ On Air to fill gaps and avoid duplication in the sector, and further work is proposed to limit how the PME can benefit from NZ On Air content. This would be laid down in the charter, and is a notable difference to RNZ's charter.

Propaganda machine? Editorial protections

One of the government's moves to help buoy journalism has been the $55m Public Interest Journalism Fund (PIJF) launched last year - a contestable source of funding allocated to NZ On Air for worthwhile news and current affairs projects. It has also come under criticism from some who have argued it undermines editorial and financial independence. To be clear, editorial independence is the extent to which news outlets can set the news agenda without interference from their owners or funders. If, for example, a news story portrayed the owner of a newspaper in a negative light, could that owner prevent the story's publication?

Those claims about the PIJF don't really stack up: NZ On Air, which decides if a project is worth funding, is independent of the government, has no control over the project once funded, and any funded content is clearly marked.

Commercial news outlets also depend on public trust for funding their business, and the same is true of outlets like RNZ for fulfilling their requirements. Editorial and operational independence is part of RNZ's mission, laid down in its charter, guaranteeing "reliable, independent, and freely accessible news and information".

The new PME would also be governed by a charter - it's yet to be consulted on more widely but editorial independence enshrined in law has been a bottom-line requirement all the way through the process. Indeed, the Cabinet paper highlights it as a "foundational principle for public media", and recommends:

• The PME as an Autonomous Crown Entity
• Ministers unable to direct the entity on editorial matters
• Ministers unable to remove board members for reasons relating to editorial matters

It is hoped this will protect it from government influence - and with RNZ having functioned under its own charter, with a high level of trust, that seems likely.

However, media commentator Gavin Ellis has warned the structure and protections may not be enough. It can be hoped this gets ironed out in the select committee consultation phase.

What next for the notorious PME

The PME is now in the process of being set up, with legislation to support it and abolish the previous RNZ and TVNZ laws set to go through Parliament and have it fully operational by July next year.

The process will include having an establishment board lay the groundwork, with a final board of six to nine members.

Cabinet papers initially have maintained that both RNZ and TVNZ would be disestablished, but Faafoi has since said exactly when this would happen would depend on the board - and it was possible both would simply remain as subsidiaries of the new entity in perpetuity.

While the recommendations have also argued currently ad-free programmes should remain so, the business case group advised the new entity should be "both delivering new services in new ways and ending those that don't have value", suggesting some changes could well be made to programming.

RNZ also has archiving arrangements with Ngā Taonga Sound and Vision Archives and Manatū Taonga Ministry for Culture and Heritage, and these will be considered by the establishment board.

Other government work on promoting te reo Māori and supporting Māori broadcasting is also expected to be taken account of.

Further reading: Opinion and analysis

• Mediawatch: RNZ + TVNZ = new PME in 2023?
• RNZ boss Paul Thompson: Merger a 'Watershed moment' for NZ media
• Time is tight to finalise a complex merger
• Duncan Grieve: Not-for-profit giant likely to dominate NZ media