Statement of Intent for 3 Years Ending 30 June 2015

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Statement of Intent for 3 Years Ending 30 June 2015 Television New Zealand Limited Statement of Intent For 3 Years Ending 30 June 2015 Table of Contents 1. Introduction……………………………………………………………………... 3 2. Who we are and what we do………………………………………………….. 3 3. The operating environment…………………………………………………….. 6 4. What we plan to do: operations and activities……………………………….. 8 5. Statement of Forecast Service Performance………………………………….. 10 6. Capability……………………………………………………………………….. 13 7. Financial performance………………………………………………………….. 14 8. Other Performance Measures.…………………………………………………. 15 9. Dividends and capital expenditure……………………………………………. 16 10. Reporting and consultation………………………………………………………16 APPENDIX I – Board of Directors – Governance and Committees APPENDIX II – Forecast financial statements APPENDIX III – Reporting requirements APPENDIX IV – Consultation, subsidiary and associated companies 27 June 2012 Hon Craig Foss Minister of Broadcasting Hon Bill English Minister of Finance Parliament Buildings WELLINGTON Dear Ministers TVNZ is expected to complete a successful financial year to June 2012 and produce a result that confirms our position as New Zealand’s leading free to air national television and digital media company, in what has become an extremely competitive market. It is a strong operating result, given the tightening of the overall market in which we operate and one which the company is proud of. In addition to disciplined cost management, TVNZ has taken great strides in diversifying its business to ensure it continues to deliver the content New Zealanders want, on the growing number of devices Kiwis are now using in their everyday lives. To be successful TVNZ must continue to deliver content that is accessible, relevant and interesting in both form and delivery, to as many New Zealanders as possible. Despite an expectation that the economy in FY2013 will remain on a slow recovery path the Board believes TVNZ is well positioned to continue to consolidate its position as New Zealand’s leading television and digital media company, grow the commercial performance of our established properties, pursue sustainable financial performance improvement through efficiency, improved productivity and continued sustainable diversification. At a macro level FY2013 will present multiple new experiences and choices for viewers with many moving to new platforms and utilising new technologies such as “smart” broadband-enabled televisions and other devices to better take advantage of a growing Ultra Fast Broadband footprint that will allow for new features and viewing behaviours. These changes of behaviour, while a challenge, present great opportunities for TVNZ as a commercial organisation. The Board has confidence in the Executive team and staff to adapt the business to changing market conditions, increasingly diversified competition and changing behaviours across viewers and advertisers. Our on-going strategy of ‘Inspiring New Zealanders on every Screen’ remains a core commercial focus despite the enormous changes occurring in the industry and economic outlook for FY2013. Yours sincerely Wayne Walden Joan Withers Chairperson Deputy Chairperson Introduction This Statement of Intent provides a range of financial and non-financial information, including desired outcomes and measurements, for those services that are directly funded by the government. Due to the unique nature of TVNZ and that the majority (in excess of 90 percent) of TVNZ’s funding comes from advertising revenue and other commercial sources, as opposed to either from Crown funding or from grants, levies, fees or charges prescribed by or under any Act, TVNZ has been provided an exemption from the requirement to report on non-Crown funded outputs in this SOI. Who we are and what we do TVNZ is a Crown Owned Entity and has a Board of Directors appointed by the Minister of Broadcasting and the Minister of Finance. The Chief Executive has day to day management of the company. The Television New Zealand Act provides the company editorial independence of which freedom from political influence is a fundamental principle. TVNZ’s operations are governed by the: Television New Zealand Act Companies Act Crown Entities Act Owner’s Expectations Manual as published by the Crown Ownership Monitoring Unit Business Planning ‘Outlook Letter’ sent to TVNZ in advance of July 1 start to the financial year Memoranda of Understanding between TVNZ and the Minister of Broadcasting (for TVNZ 7, the Pacific Service and Remote Services) Compliance with the current free-to-air Code of Broadcasting Practice regulated by the Broadcasting Standards Authority and Compliance with advertising codes promulgated through the Advertising Standards Authority. The policy objectives set out by shareholding Ministers is for TVNZ to continue its transition into a successful national television and digital media company providing a range of content and services on a choice of delivery platforms while maintaining a strong commercial performance. In carrying out its functions, TVNZ must provide high quality content that: 3 (a) Is relevant to, and enjoyed and valued by, New Zealand audiences; and (b) Encompasses both New Zealand and international content and reflects Māori perspectives. TVNZ’s services must include the provision of channels that are free of charge and available to audiences throughout New Zealand. Creating sustainable business growth - ‘Inspiring New Zealanders on every Screen’ The FY2013 Business Plan aims to achieve commercial success through the now embedded 5 year strategy of ‘Inspiring New Zealanders on Every Screen’. This strategy was reviewed and reconfirmed in 2009 (see diagram below). As an enterprise focused on achieving the best commercial outcomes the 4 pillars of our strategy are aligned to achieve sustainable business growth by being both consumer and customer led – delivering to their wants and needs. Sustainable business growth Reach more New Zealanders in more ways The preferred partner Inspiring New Zealanders The The on every screen content leader content content leader content Transform our business Consumer and customer led 4 The competitive environment in which TVNZ operates is constantly evolving, both in terms of changing technologies and in the ways in which we can provide content to a diversity of audiences. The four pillars of the TVNZ strategy provide a solid foundation to deliver better outcomes through: Transform our Business: We will achieve organisational agility; build New Zealand’s leading media brands; achieve total advertising revenue share growth; pursue revenue diversification; implement a fully and more efficient digital infrastructure; align our cost structure to achieve sustainable growth and profitability, and continue to improve how we produce, manage and deliver content. The Preferred Partner: We will continue to develop profitable and collaborative partnerships, both domestic and international; and strengthen our position as a preferred content supplier for digital channels and digital media. The Content Leader: We will continue to improve our understanding of what content our consumers want and need; achieve television and digital media leadership in all profitable content genres; build a profitable multi-channel, multiplatform strategy; maximise our share of contestable programme funding; drive local content creativity and innovation; and secure long term local and international multi-platform content rights Reach More New Zealanders in More Ways: We will maximise target audience share on all available screens; seek two-way interaction with consumers; provide and promote opportunities for our clients to engage with consumers across all screens; and sustain our leading position as New Zealanders’ first choice for news and entertainment. The scope of functions and intended operations of TVNZ are: The commissioning, production, purchasing and archiving of audiovisual material, either independently or with others The provision of television production facilities (field, studio and post production), outside broadcast facilities, design and set construction services The programming and scheduling of television channels and related marketing services to commercial and non-commercial partners The provision of advertising and sponsorship services and related marketing activities The broadcasting and narrowcasting of free to air and pay television channels, programmes and signals on all available platforms and devices The provision of online services, development and delivery of content for the television, internet and communications industry 5 The provision of services to the broadcast industry, both domestically and internationally The provision of audiovisual footage, programming, video and DVD rights, programme listing information, channel packaging and all other content related services and materials; and To undertake other media related activities, as determined by the Board. The operating environment FY2013 has a number of long term challenges for the company. They include: Continued fragmentation of the television market and increased competition for viewers An exponential proliferation of alternative avenues for the provision of entertainment services, including pay channels and all types of digital media experiences has allowed viewers to access a vastly richer media experience than 10 years ago. Multiple viewing experiences while improving customer experience has, however, also led to the steady erosion of Free To Air TV audience share. In 2001, TVNZ had 62% audience share (AP 18-54). Today that figure
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