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TVNZ ANNUAL REPORT FY2011 2 TVNZ ANNUAL REPORT FY2011 Cover: Aftermath of the 22 February 2011 Christchurch Earthquake Table of Contents

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TVNZ ANNUAL REPORT FY2011 2 TVNZ ANNUAL REPORT FY2011 Cover: Aftermath of the 22 February 2011 Christchurch Earthquake Table of Contents 1 TVNZ ANNUAL REPORT FY2011 2 TVNZ ANNUAL REPORT FY2011 Cover: Aftermath of the 22 February 2011 Christchurch earthquake TABLE OF CONTENTS Chairman’s Introduction 4 Chief Executive’s Overview 6 Financial Performance 9 TVNZ in Society 11 General Charter Measures 13 Charter Performance Measurements 15 Financial Statements 34 Corporate Governance 85 Directors’ Profiles 86 Main Locations 87 TVNZ ANNUAL REPORT 3 FY2011 ONE News’ Simon Dallow in Christchurch CHAIRMAN’s IntroDUCTION Sir John Anderson THESE ARE EXCITING TIMES. THERE ARE ENORMOUS CHANGES GOING ON WITHIN THE INDUStry AND TVNZ IS WELL POSITIONED TO RESPOND TO THE CHALLENGES AND OPPORTUNITIES THEY PRESENT. 4 TVNZ ANNUAL REPORT FY2011 TVNZ has reported a positive performance Kua puta te whakatau whai hua ā Te Reo Tātaki this year. The Company delivered a net mo tēnei tau. Ko taua hua nō muri mai ō nga profit after tax of $2.1 million and underlying tākē, kā eke ki te $2.1 miriona, e whakāta āna, earnings of $31.8 million, up 164% from the e $31.8 miriona te painga. Kotahi rau ono previous year. tekau ma wha ōrau te painga āke. The Board is pleased to declare a dividend to the Shareholder E hari ana te rūnanga ki te pānui ki te kāwanatanga ngā hua mo of $13.8 million, an increase on the previous year’s dividend of te tau, kua eke nei ki te $13.8 miriona. He painga i kō noa ātu i $4.9 million. te $4.9 miriona o tē tau kua hori. Credit for this excellent result must go to TVNZ management Ko ngā whakapainga mo tēnei ahuatanga na ngā kaiwhakahaere and staff. The Board thanks them for their contribution and rātou me te hunga mahi i tāea ai. Na rātou, me tō rātou kaha, commitment to bringing to life the Company’s vision of Inspiring mē te tino ū ki te whakatau, Te Whakaaratanga o Aotearoa ki New Zealanders on Every Screen. ngā Rīangi Whakaata Katoa. Advertising-reliant media companies in New Zealand and abroad Na nga tikanga whakatahu o nga Whare Pakihi o Aotearoa, faced a challenging year. TVNZ took effective action to mitigate me rāwahi i uaua ai te ara. Na nga karo a Te Reo Tātaki me nga the impact of the global financial crisis on its business through kaupare atu i nga taumahatanga o nga tikanga ā ao, me te disciplined cost management and an ongoing programme of kukuti anō o nga ahuatanga utu i pai ai. Nā te titiro whānui anō business diversification and transformation. ki ngā huarahi i te wātea mai, i ū ai. The performance of both TV ONE and TV2 has contributed to a lift Nā ngā taumata whakaritenga a TV ONE raua ko TV2 i eke ai in TVNZ’s advertising revenues and television market share. TVNZ nga hua o nga kaupapa whakawai me te wāhanga e tika āna secured 80.6% of all growth in television advertising for the year. mo nga pouaka whakaata, huri noa. E 80.6 ōrau te huanga ō nga tikanga whakawai ō ngā pouaka whakaata mo te tau. The Company continued to expand its digital broadcasting horizons. During the year it completed the implementation of I Ākitia e Te Reo Tātaki ōna pae mamati. I tēnei wā i oti te a multi-million dollar digital infrastructure and playout facility. whakatū i nga taputapu, e hia miriona nei te utu, e taea ai te This allows the Company to reach more New Zealanders in pānui i aua mea mamati. Ma ēnei āhuatanga ē taea ai e mātou more ways as it expands its television and online services. nga kaupapa whakaata, me ōna hononga ki nga ahuatanga maha ki nga rorohiko. The new digital facility enabled TVNZ to launch two new channels: channel U, a free-to-air youth channel aimed at 15 Na ēnei ahuatanga i māunu ai i Te Reo Tātaki nga whakāturanga to 24-year-olds that uses a groundbreaking live interface with hou, kō U tera, ma te hunga taitamariki, me te hono atu ki era Facebook and; TVNZ Kidzone24, a new pay channel on Sky o nga tikanga e whāia nei e te rangatahi, a Facebook me TVNZ serving the needs of pre-schoolers and their parents. KIDZone24. He tino hou ēnei tikanga. He teihana ā utu anō kua timata ma nga tamariki nohinohi me ō rātou mātua kua kanapa In July this year the Government’s amendment to the Television mai ki te ao i runga i a Sky. New Zealand Act 2003 was passed into law. The Act provides confirmation of TVNZ’s role as New Zealand’s national free- I te marama o Hurae i tenei tau i puta he wāhanga hou ki te ture to-air television and digital media company. The legislation o te tau 2003, e pa ana ki ngā Pouaka Whakaata. Kua mana te removed the TVNZ Charter but enshrined TVNZ’s obligation rangatiratanga o Te Reo Tātaki me ōna kārangatanga maha hei to provide high-quality content for New Zealand audiences Pouaka Whakaata Matua mo Aotearoa. I whakakoretia te TVNZ and to maintain a strong commercial performance. Charter, engari kua ūhia ātu te whakahau kia puta i a ia nga taonga mā ngā iwi o Aotearoa, me tōnā kore anō e wareware These are exciting times. There are enormous changes going ki te taha whai hua. on within the industry and TVNZ is well positioned to respond to the challenges and opportunities they present. Ko te wā tēnei hei whakakorikori, hei whakaohooho mo nga mea hou kei mua i ā tātou. Kei te tū matāra ā Te Reo Tātaki ki ngā wero me ngā angitu ka pupū mai ki tōna aroaro i tēnei wā. Sir John Anderson TVNZ ANNUAL REPORT 5 FY2011 CHIEF EXECUTIVE'S OVERVIEW Rick Ellis WE ARE CONTINUING TO BUILD MOMENTUM. A NUMBER OF KEY TRANSFORMatIONAL PROJECTS WERE COMPLETED THIS YEAR WHICH INCREASED PRODUCTIVITY AND EFFICIENCY AND SHARPENED OUR CONSUMER AND CUStoMER FOCUS. 6 TVNZ ANNUAL REPORT FY2011 TVNZ has produced an excellent annual commission, Go Girls, finished its third season as the country’s result that confirms its position as New most popular local weekly drama. Zealand’s leading free-to-air television and Complete the current transformation projects and deliver digital media company. a more efficient and lower operating cost structure across The Company rationalised operating costs, increased the Company. advertising market share and recorded excellent on screen The Company completed the implementation of its new multi- performances. We’ve succeeded by continuing to be agile, million dollar digital infrastructure, on time and under budget. and by pushing ahead with our strategy to grow our business. This marks a major milestone in our evolution as a modern, Despite a challenging economic climate, TVNZ maintained well-equipped television and digital media company. its leadership position in the New Zealand advertising media The new digital playout facility has reduced costs, streamlined sector by keeping customer focus and innovation at the operations and fundamentally changed the way we work. forefront of its business. It provides high definition capability and will continue to TVNZ has evolved from an analogue two channel television improve how we produce, manage and deliver content to network into a multi-channel, multi-platform digital broadcaster screens in the years to come. in the space of a few short years. At the same time, news and current affairs operations A number of key transformational projects were completed have been restructured to fit the Company’s multi-media this year which increased productivity and efficiency and strategy. The transformation involved the introduction of sharpened our consumer and customer focus. Our goal is to new technology, training to develop multi-skilled staff and do even better in the year ahead. a reorganisation of news gathering processes. Instead of a number of different programmes chasing after the same The Company’s progress against the business priorities story and duplicating resources, a reporter and a producer contained in our 2011 Statement of Intent is set out below. are assigned to see a story through the whole day across a number of programmes and platforms. Adapt TV ONE’s brand and content strategies to meet commercial performance expectations and maintain the Align commissioning, production resources and facilities performance of TV2. to support the content strategies and meet agreed TVNZ TV ONE and TV2 are at the heart of TVNZ’s business. Our commercial objectives. two flagship channels dominate New Zealand primetime; Being the nation’s content leader is one of the central pillars between them, they broadcast 19 out of the 20 most of our Inspiring New Zealanders on Every Screen strategy. To watched programmes. survive in this multi-device world where choice is only a click Both channels exceeded all their commercial audience and away, TVNZ must deliver content that is accessible, relevant yield targets for the year. They were the only free-to-air and interesting in form and delivery. channels to grow audience share over the year – up 2.4% – a To this end, TVNZ established an in-house Creative Hub to pleasing achievement in today’s increasingly fragmented and bring our people’s incredible talent and creative work to competitive media market. the forefront of our business. The Hub has consolidated the TV ONE is TV’s answer to the Kiwi backyard. This authentic, creative effort to deliver integrated marketing campaigns confident and passionate brand positioning reflects for our clients, customers and viewers. Bringing our Digital, contemporary New Zealand life and has clearly resonated with Commissioning, News, Sales and Production Facility teams viewers throughout the year.
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