Submission to the Ministry for Culture and Heritage Content Regulation in A

SUBMISSION TO THE MINISTRY FOR CULTURE AND HERITAGE

CONTENT REGULATION IN A CONVERGED WORLD

16 OCTOBER 2015

To: Convergence Review Team Media Policy Ministry for Culture and Heritage P O Box 5364 Wellington 6011

This submission is made on behalf of Television New Zealand Limited, in response to the Ministry for Cultural and Heritage’s Discussion Document entitled Content Regulation in a Converged World.

TVNZ is happy for this submission to be made public in its entirety.

Contact Details:

Brent McAnulty General Counsel and Corporate Affairs Director Television New Zealand Limited

Ph: 09 916 7935 M: 027 226 4913 E: [email protected]

INTRODUCTION

1. Television New Zealand Limited (TVNZ) thanks the Ministry for Culture and Heritage (MCH) for the opportunity to make a submission in respect of the Content Regulation in a Converged World Discussion Document (the Paper). TVNZ welcomes the further opportunity to discuss these submissions with MCH, if that would be useful.

2. TVNZ is the country’s leading free to air broadcaster. It reaches approximately 2.2 million New Zealanders every day, predominantly through its two main broadcast channels, TV ONE and TV2, as well as its TVNZ OnDemand and ONE News Now online services. It operates 24 hours a day and produces, commissions and acquires thousands of hours of content per year. TVNZ is owned by the Crown but operates as a self-sufficient, commercial entity by virtue of the Television New Zealand Act 2003, and is supported by advertising revenue.

3. TVNZ is well-positioned to give its views on the issues in the Paper. It is regulated by the Broadcasting Standards Authority (BSA), is a founder of the Online Media Standards Authority (OMSA), frequently interacts and provides support to the Advertising Standards Authority (ASA) and has submitted widely on issues of media regulation. TVNZ is also a partner in ThinkTV, which aims to further the interests of free to air television, and receives funding from NZ On Air and Te Māngai Pāho. TVNZ has a keen interest in all the subjects covered in the Paper, and closely follows developments in this area within relevant overseas jurisdictions.

4. TVNZ has had the opportunity to read draft submissions by OMSA, in respect of content regulation, and ThinkTV in respect of advertising restrictions. It supports their respective positions. However it holds its own views on these subjects too and this submission is intended to be read in conjunction with the OMSA and ThinkTV contributions.

5. This submission will focus on all aspects of the Paper:

5.1. Classification of content;

5.2. Regulation of video content;

5.3. The overlap in jurisdiction between the Electoral Commission and the Broadcasting Standards Authority;

5.4. Advertising restrictions under the Broadcasting Act 1989; and

5.5. Issues regarding New Zealand content.

6. TVNZ has also drafted a joint submission on the Exploring Digital Convergence Green Paper along with NZME., Maori Television Service and MediaWorks.

EXECUTIVE SUMMARY

7. TVNZ believes that it is best placed to classify content for its own audiences. To have a third party manage this on its behalf would be prohibitively expensive and inefficient. (Paragraphs 13 to 16)

8. TVNZ believes in self-regulation and has a strong track record of compliance with the BSA Codes of Practice, with efficiency and expediency. It believes in a principles based approach to content regulation. (Paragraphs 17-54)

TVNZ favours Options 2 and 5, while Option 6 is reserved as a possibility if Options 2 and 5 aren’t successful.

Options 1, 3 and 4 are not supported by TVNZ.

9. TVNZ supports the removal of the advertising restrictions which are placed on broadcasters by virtue of section 81 of the Broadcasting Act 1989. (Paragraphs 55-69)

10. TVNZ submits that broadcasters should not carry any more obligations in regard to election programmes than other media. Furthermore, a narrower definition of election programme should be adopted to avoid uncertainty. (Paragraphs 70-77)

11. TVNZ supports the contestable funding regime, but does not support local quotas. (Paragraphs 78-80)

CLASSIFICATION OF CONTENT

12. TVNZ classifies all of its broadcast content itself prior to transmission, other than live content which is exempt from this practice. Under the BSA Free to Air Code of Practice there are windows within which content of a certain classification can be broadcast.

13. TVNZ OnDemand is a video on demand (VOD) service almost entirely consisting of content which has already been or will soon be broadcast by TVNZ. As such, as soon as content is received by TVNZ it is classified in the same fashion, regardless of whether it is destined for broadcast or on demand. For content being premiered on TVNZ OnDemand (ahead of broadcast transmission) this entire process can take place within hours of content being received from the content distributor. This enables TVNZ to make content available to its TVNZ OnDemand customers within a few hours of first transmission in its domestic market, classified appropriately.

14. The internal team of media specialists who undertake this work provide two roles: content appraisal and editing. For expediency these two roles are carried out simultaneously by the same employee. The content appraisal function is to ensure that content is purposed for the time slot in which it is intended, in line with the BSA Codes of Practice. The editing function is to ensure that the content has a natural flow to it, and fits the timeslot it is scheduled in, while ensuring that TVNZ’s commercial obligations are met.

15. TVNZ submits that this is by far the most efficient and cost-effective way to classify content. The TVNZ media specialists are experts in their craft, by virtue of the volume and pace at which they work. If TVNZ was required to outsource the classification of content to a third party the cost would certainly increase. The lead time required would also increase. Editing for commercial breaks would still need to take place internally. It would, in effect, involve double handling of the same content.

16. TVNZ and other broadcasters have been classifying content in a responsible fashion for many years. Instances of content being classified incorrectly are very rare. In almost all cases where a complaint is upheld for this reason (whether by the TVNZ Complaints Committee, or ultimately by the BSA) the issue has been one of incorrect placement of content. That is, the content was correctly classified but was scheduled incorrectly, particularly in the case of promos which are considered programmes in their own right.

OPTIONS FOR AUDIO VISUAL CONTENT

Principles

17. TVNZ supports the principle of self-regulation. In its view it is in the interests of the New Zealand public, media organisations and the government that the regulation of all content be maintained by a self-regulatory body. This is irrespective of the platform that content sits on. Operated properly, a self-regulatory regime should be more cost effective and expedient. The ASA and the NZ Press Council are excellent examples of how self-regulatory bodies can operate in New Zealand efficiently and effectively.

18. In support of this long-held view, TVNZ was a founding member of OMSA. OMSA is a voluntary, industry-funded, self-regulatory body designed to cover an identified “gap” in the regulatory framework, namely online news and current affairs content. OMSA has been operating since July 2013.

19. TVNZ itself operates a Complaints Committee which determines broadcasting standards complaints in the first instance under self-regulation principles. In the last financial year the TVNZ Complaints Committee processed over 1000 complaints. Except for a handful of complex complaints which required an extension, all complaints were responded to within 20 working days with a fulsome response addressing the standards raised by the complainant. The referral rate to the BSA is extremely low – 4% of complaints received by TVNZ. Further, the BSA uphold rate as a proportion of complaints received by the TVNZ Complaints Committee is 0.4%.

20. Since OMSA commenced operating it has impressed with its efficiency and its processes. Privacy Commissioner John Edwards said of his experiences with OMSA, “The OMSA complaint process is admirably accessible, and efficient. There is an online form and after submitting details on Sunday afternoon, I received not only an acknowledgment, but the broadcaster’s response, and a request for further information from the Chair, in little over 24 hours!”.1

21. The BSA was enacted at a time when television held a more dominant position in the media landscape. It is constrained by legislation (the Broadcasting Act) and is not able to adapt as quickly as non-statutory bodies. For instance, it does not have the luxury of being able to “triage” complaints. That is, it cannot determine complaints without reference to the full four-member Authority. Therefore complaints of little merit take up valuable and expensive time (given that the Authority members convene once a month). It is required to meet the functions of a crown entity such as preparing a Statement of Intent, complying with the

1 http://www.omsa.co.nz/wp-content/uploads/OMSA-15008.pdf

Official Information Act and reporting to MCH. It is submitted that such a body is no longer required.

22. The following table illustrates the efficiency of self-regulatory bodies operating in the video / advertising space in New Zealand, based on most recent figures:

Body Personnel Complaints Cost and Source Average cost (Year) per Complaint ASA2 5 staff 871 $738,000 $847

Self-regulation 9 Authority (FY14) Funded by industry members BSA3 5 staff 149 $1,050,000 $7,046

Statutory Regulator 4 Authority (FY14) Government and members broadcaster funded OMSA 1 staff 12 $31,786 $2,648

Self-regulation 7 Authority (2015 to Funded by members date) members

TVNZ 1.3 FTE staff 1073 Less than $200,000 Under $200 Complaints Committee

Self-regulation 2 Committee (FY15) Self-funded Members

Note that OMSA’s total is high as it has not had time to absorb set-up costs. It is not representative of the cost for VOD providers as the OMSA VOD Code would allow for providers to answer formal complaints themselves and OMSA would only adjudicate on complaints that cannot be resolved.

23. TVNZ has identified 11 principles that it considers important under any converged media standards regime:

 It should be intuitive for both broadcasters and consumers.

 It must be efficient and broadcasters should not be disadvantaged by a VOD regulation process when competing with international content providers.

 It should be low cost for all parties involved.

 There should be consistency around classification of material (as much as possible).

2 ASA Annual Report 2014, http://www.asa.co.nz/wp-content/uploads/2015/06/ASA-Annual-Report-2014.pdf

3 BSA Annual report 2014, https://bsa.govt.nz/images/BSA_Annual_Report_2014.pdf

 Broadcasters / VOD operators should be able classify material themselves.

 Broadcasters / VOD operators should determine complaints in-house first.

 Broadcasters should have the ability to “triage” complaints that are of no merit or are settled between the parties.

 All complaints about online material should be dealt with expeditiously.

 An appellate body should be set up for handling complaints which aren’t handled to the satisfaction of the complainant.

 The appellate body should also be able to “triage” complaints and deal with complaints about online content expeditiously.

 The appellate body should have representation from both broadcasters/VOD providers and the public.

These principles are fundamental for TVNZ in the application of any VOD complaints regime and each option has been assessed with these principles in mind.

24. Given the 11 principles above, TVNZ submits that the two options which would meet best meet these requirements are Option 2 and Option 5, or a combination of these.

Preferred Option 2: Voluntary Code – No Regulatory Intervention

25. TVNZ submits that Option 2 is the best way of promptly and efficiently addressing the issue of VOD content classification. The OMSA model could be adopted immediately as it requires no changes in legislation to enact. This option simply requires the backing of broadcasters and other parties. Presently OMSA has the support of all its members: TVNZ, MediaWorks TV Ltd, MediaWorks Radio Ltd, Maori Television Service, Sky Network Television Ltd, The Radio Network Ltd and Radio New Zealand.

26. OMSA is already well advanced in the development and implementation of a VOD Classifications Code and has an existing Complaints Committee and a Complaints Appeals Board. OMSA members are practised at classification and employ experts in this field to perform this function for their businesses.

27. OMSA has recognised that some newer content providers may not have access to this type of classification expertise in their business and is open to developing a training and certification process to ensure (as far as possible) the consistent application of the classifications by all VOD providers.

28. As outlined in paragraphs 13-15 above, self-classification has the advantage of being cost efficient and timely. VOD providers are not disadvantaged in the day-to-day running of their

business as they would be under Option 4, the extension of the Films Videos and Publications Classification Act to include VOD content.

29. Under Option 2 the complaints regime will allow VOD providers to firstly deal with viewers’ complaints in-house, which is the most cost efficient method of addressing viewers issues. An appellate body such as OMSA can then be left to adjudicate on complaints that cannot be resolved.

30. Where content is found to be incorrectly classified members will be required to remove the content and ensure it is correctly reclassified before it can be made available again.

31. Option 2 only addresses the issue of VOD classification as opposed to wider standards. If a wider change becomes the preferred model then TVNZ favours a mix of Option 2 and Option 5.

Preferred Option 5: Increased Self-regulation

32. While this option will take much longer to implement (as it requires changes to current legislation), it would allow consistency over broadcasting and on-demand platforms. It would also allow broadcasters and VOD providers to remove unnecessary cost and delay to their businesses and to provide a better, more consistent and more intuitive service to viewers.

33. A new self-regulatory standards body (or an existing one such as OMSA) is TVNZ’s preferred appellate body for Option 5. Self-regulation is cost and time efficient. It is also flexible, allowing processes to develop as required, and as the media environment evolves, a factor that broadcasters are dealing with presently. The ASA and the Press Council are excellent examples of established self-regulatory bodies in a New Zealand context and they each provide consistent decisions with few decisions appealed. There can be no criticism that the oversight of the ASA, the Press Council or OMSA has increased the chance of content providers acting irresponsibly or outside the public interest.

34. Presently the Broadcasting Act recognises the difference in delivery of Free-to-Air (FTA), Pay Television and Radio. Classification systems are not consistent across these platforms, and while they have been operating independently for many years they are familiar to viewers.

35. Broadcasters presently maintain classification consistency across their VOD and broadcast offerings; FTA broadcasters use the FTA classifications on their broadcast and VOD offerings, while Pay operators use the Pay Classifications.

36. Using Option 2 as a starting point for Option 5 means that VOD classifications will be consistent over VOD offerings (recognising the uniqueness of this platform) rather than specific to (i) the broadcasting classification system used by the broadcaster (e.g. TVNZ, MediaWorks, Sky), or (ii) the Film and Video Labelling Classifications used by some New Zealand VOD providers (e.g. Lightbox), or (iii) a mixture of classifications used by overseas providers (e.g. Netflix NZ) which presently occurs.

37. Ideally the same classifications would be applied across all platforms and the way that content time bands are applied would be consistent.

38. As detailed in paragraph 15 above, broadcasters are well-versed at classification and employ experts in this field to perform this function for their businesses. TVNZ for example has nine media specialists who classify and edit programmes for screening.

39. With Option 2 used as the starting point for Option 5 a self-regulatory body such as OMSA could develop a training and certification process to ensure (as far as possible) the consistent application of the classifications by all VOD providers. This system has the advantage of being cost efficient and timely so that VOD providers are not disadvantaged in the day-to-day running of their business. Broadcasters who have been performing this classification function consistently well for years do not require this type of intervention, although it could be made available to those broadcasters who wished to avail themselves of this.

40. Under Option 5 TVNZ favours a complaints regime which allows broadcasters and VOD providers to firstly deal with viewers’ complaints in-house. This has the advantage of being the most cost efficient method of addressing viewers’ issues (see the table at paragraph 22 above). This will ensure that the appellate body is not encumbered by a large volume of complaints and therefore keeps operating costs down. If the proposed collective standards body is used as is described in the Paper, it would be dealing with the thousands of complaints that broadcasters cumulatively receive in a year rather than the relatively few complaints (149 in FY2014) managed by the BSA.

Rejected Option 1: Status Quo

41. TVNZ does not support Option 1.

42. TVNZ agrees with the rationale for change set out in the Paper. There is currently uncertainty over the classification and regulation of VOD content which creates an uneven playing field for providers.

Rejected Option 3: Extend Broadcasting Act regime

43. TVNZ does not support Option 3.

44. TVNZ favours a self–regulatory framework for the reasons discussed above.

45. Broadcasters contend that live streaming is implicitly covered by the Broadcasting Act, although this assumption has not been tested. The system prescribed under the Broadcasting Act allows for classification by broadcasters, which is consistent with TVNZ’s principles (see paragraph 23 above). It is not clear why this would be considered to be acceptable under this option but not others in the Paper.

46. Option 3 allows for different broadcasting codes to recognise the differences across delivery platforms. This is desirable; however, Option 5 could also offer the same flexibility.

47. TVNZ prefers that the same classifications regime be applied across all platforms for content to assist consumers (especially parents) in determining whether content is suitable for

viewing. While this may mean some initial cost to broadcasters this approach recognises the availability of technologies which allow the different platforms to operate in the same way.

48. The online environment is different to a broadcast one; presently only material which is illegal is prohibited. The Broadcasting Act is not intended to provide the light-touch required to deal with online material. VOD providers and broadcasters are competing with international VOD providers who are not subject to similar regulatory frameworks. Recent NZ on Air research shows that YouTube is easily the most popular website and matches the daily reach of TV2 with the equivalent of one third of 6-14 year old New Zealanders tuning in4. It is not regulated in New Zealand at all.

Rejected Option 4: Extend Classification Act regime

49. TVNZ does not support Option 4.

50. TVNZ contends that it is appropriate for the Films Videos and Publications Classification Act 1993 to provide the socially important function of determining what is objectionable material, or injurious to the public good.

51. This option would be an extremely costly solution for broadcasters and VOD providers and would cause untenable time delays. This regime is not set up for the fast turn-around of content that viewers now expect from both broadcasters and VOD providers.

Possible Option 6: A new Media Standards Act

52. TVNZ is open to Option 6 as a long term solution but recognises that it involves considerable investment and statutory intervention, at least in the establishment phase.

53. If followed, a fully self-regulatory system would be favoured under this system akin to that described under Option 5 above.

54. TVNZ submits that Options 2 and 5 are adopted first and that Option 6 is reserved in case those options don’t work effectively.

ADVERTISING RESTRICTIONS

55. TVNZ’s broadcast channels are subject to the advertising restrictions contained within section 81 of the Broadcasting Act 1989. However the online assets of TVNZ, such as TVNZ OnDemand and ONE News Now, are exempt.

56. TVNZ submits that the restriction on broadcast advertising on Sunday mornings and certain public holidays is inconsistent with the Paper’s claim that regulation should “treat likes alike”5. As a commercial broadcaster which increasingly sees online video content as its competitor, the current restriction is not equitable. Commercial broadcasters require advertising revenue to support the production and acquisition of content. The ability to monetise broadcast content during these times will enable New Zealand-based broadcasters to compete more effectively with foreign competitors who are not subject to the broadcasting regime.

4 Children’s Media Use Study: How children engage with media today, BSA, 2014, p124 5 Content Regulation in a Converged World Discussion Paper, p10

57. There are no reasonable grounds to maintain the section 81 restrictions. Whatever their original intention, it is clear that they provide almost no benefit to the general public while requiring broadcasters to forgo millions of dollars of advertising sales.

58. The special status given to Sunday mornings and Easter in particular does not reflect the increasingly secular society in which we live. The restrictions in general are not in line with other activities (such as cinema, sporting events, shopping) which have few or no restrictions.

59. In addition, the growing proliferation of smart televisions and personal devices means that a viewer may see advertising on some content on their screen on Sunday mornings, whereas other content delivered to the same device is restricted. In addition, time-shifted viewing of broadcast content may result in advertising being viewed by the consumer during the restricted periods.

60. For those reasons TVNZ submits that the current restrictions should be repealed, and therefore supports Option 4 within the Paper. It does not support the use of maximum time allowances as seen in some other jurisdictions. TVNZ receives no direct government funding for its operations. The sale of advertising air time is governed by supply and demand. If a broadcaster was to increase its advertising minutage, it would pay through disengaging audiences, and ultimately poor ratings.

61. The Paper provides a range of options regarding advertising restrictions. Options 1 (status quo), 2 (allow for one-off exemptions) and 3 (protect programming space) only place restrictions on broadcasters. As such they do not address the inequitable nature of the current restrictions with respect to other methods of content delivery. In particular, TVNZ submits that as a commercial broadcaster any change that requires it to provide special interest programming would be a refocus of its mandate. Option 5 (extending restrictions to online) is not practical and could only be applied to local providers. As platforms such as You Tube and Facebook form part of our competitive landscape, this would be inequitable.

62. TVNZ strongly supports Option 4 (the removal of the current section 81 restrictions) on the grounds that they unfairly constrain television broadcasters’ commercial opportunities, are out of date and do not create any legitimate gain for the public. In our view, these restrictions create an unequal playing field, limit the public’s media choices and stifle competition within the advertising market.

63. The total length of time which is required to be free of advertising is approximately 300 hours per annum, per television channel. Around 60 television channels are affected by these restrictions. During this time, most other media, which directly compete with television for advertising revenue, are permitted to continue normal advertising patterns.

64. Radio, which is also subject to the Broadcasting Act, is prohibited from carrying advertising on only the three full-day public holidays (Good Friday, Easter Sunday and Christmas Day), but is allowed to advertise on all Sunday mornings and Anzac Day morning. Daily newspapers generally do not publish on Christmas Day or Good Friday, but that is a business decision they make for their own reasons; they are not restricted from publishing or presenting advertising

on these days. There are no advertising restrictions for online media, magazines, cinema, outdoor billboards or the distribution of flyers and other unaddressed mail.

65. TVNZ, like all FTA television networks, requires advertising to create revenue. Due to the restrictions under section 81 of the Broadcasting Act it competes with all other media in an uneven playing field for its share of the overall advertising market and to maintain its audience.

66. Annual television advertising revenue is down 30 per cent in real terms since its peak in 20056. The opportunity to provide three more full days of advertising during two very busy retail periods, when other media can advertise, is important so that FTA television broadcasters are not disadvantaged in the day-to-day running of their businesses.

67. Television is New Zealand’s largest single advertising medium, typically attracting some 25 per cent of all advertising expenditure. It is also the most efficient way for advertisers to reach a mass audience. Television advertising historically has a CPM (the cost to reach 1000 people) that is only 25 to 50 per cent of that of magazines, newspapers and radio in New Zealand. It is not unreasonable to conclude that removing 25 per cent of the advertising inventory significantly increases media placement costs for advertisers.

68. It appears that there is no legislative rationale for these unequal restrictions on television broadcasters. As noted above, the restrictions do not apply to the overwhelming majority of the media market, even to radio broadcasters who are regulated by the same Act, so they do not meaningfully reduce the overall exposure to advertising during the prohibited times. During commercial-free times, most broadcasters need to play multiple promotions for their other programmes during the ‘ad breaks’, to ensure they stay on schedule.

69. Finally, the Paper discusses the need for administering the regime. TVNZ notes that there has been general compliance with advertising restrictions, and suggests that the one memorable deliberate breach (which resulted in prosecution) was a commercial gamble by that broadcaster. If Option 4 (removal of current restrictions) is progressed than the need for administering or policing compliance disappears.

ELECTION PROGRAMMES

70. TVNZ submits that the current regulation of election broadcasting specific to television and radio7 is outdated and should be repealed. The regulations place an unfair restriction on broadcasters’ ability to secure advertising revenue during elections, over other advertising platforms. There is no such restriction on other media.

6 2005 revenue = $666 million 2014 revenue = $614 million (source: ASA) Average annual inflation rate over period = 2.3% (source: RBNZ)

7 Section 70, Broadcasting Act 1989

Overlap between Broadcasting Standards Authority and Electoral Commission

71. The BSA publishes an Election Programmes Code of Broadcasting Practice which governs the broadcast of election programmes, that is, a programme which:

 encourages or persuades, or appears to encourage or persuade voters to vote, or not to vote, for a political party or the election of any person at an election; or

 advocates support for, or opposes, a candidate or political party; or

 notifies meetings held or to be held in connection with an election.8

72. The Electoral Commission is an independent Crown entity responsible for the administration of parliamentary elections and referenda.

73. There is considerable overlap between the two bodies. This was accentuated in 2011 by the contrasting decisions of each body in respect of the “Prime Minister’s Hour” radio broadcast on Radio Live.

74. The BSA held that the programme did not meet the definition of an election programme. The Electoral Commission however said of the same programme:

“In the Commission's view it is unrealistic for a programme hosted by the Prime Minister or any other prominent politician to be 'election-free', irrespective of its content, when the host is in the midst of contesting a parliamentary election as party leader and candidate.”9

The Electoral Commission found that the programme was an election programme and referred the matter to the Police.

75. The definition of an election programme is unclear, made even more uncertain by the differing interpretations applied to it by the Electoral Commission and the Broadcasting Standards Authority. The media is left in a position where it simply does not know the correct legal boundaries, yet faces the prospect of criminal liability if it is found to have crossed the line. It is submitted that a much clearer test is required so that media knows where it stands. TVNZ considers that the BSA’s interpretation is to be preferred, as it is more consistent with the right of freedom of expression, which should be strongly protected in relation to election matters.

76. TVNZ submits that the uncertainty as to jurisdiction is unhelpful to media, and oversight should be allocated to one body in time for the next general election.

77. Finally, earlier this year TVNZ made a submission to the Justice and Electoral Committee’s review of Election 2014 regarding the obligation on TVNZ to provide free time during peak viewing for political parties to broadcast their opening and closing addresses.10 TVNZ repeats

8 BSA Election Programmes Code of Broadcasting Practice and Broadcasting Act 1989, section 69 9 Electoral Commission media release dated 8 February 2012 10 Sections 71 and 77A, Broadcasting Act 1989

its submission that this obligation should be repealed. This is an example of inequitable treatment between platforms.

THE GOVERNMENT’S TOOLBOX

78. TVNZ supports the current funding model which is administered by NZ On Air and Te Māngai Pāho. This funding is contestable and merit-based. The availability for this funding is important to ensure that New Zealand stories are reflected in our media. Quality video content is expensive to make and this funding is necessary to ensure relevant local content is made.

79. TVNZ does not believe that content conditions should be placed on broadcasters as part of their allocation of frequencies. There is an imperative with most broadcasters to make money from their activities and conditions that require certain content to be carried across networks undermine this.

80. TVNZ does not support the introduction of quotas for local content. Any establishment of quotas would require substantial funding to ensure that all broadcasters can comply. The use of targeted merit-based funding as applied by NZ On Air and Te Māngai Pāho is the most effective way to produce local content.