Hottest big media company: TVNZ
Nominees: NZME, Radio New Zealand
People’s Choice: Radio New Zealand
When TVNZ’s financial results for the six months to 31 December 2018 were released earlier this year, its total revenue was up $3.1 million to $173.5 million, driven by stable TV advertising revenue and double-digit growth in online advertising revenues. Beyond the numbers, TVNZ OnDemand has become a competitor to paid SVODs alongside great sports offerings with the Commonwealth Games and Winter Olympics, and upcoming New Zealand Winter Games and the 2019 Rugby World Cup in Japan. NZ Marketing speaks with chief executive Kevin Kenrick about growth, challenges and local content.
As chief executive Kevin Kenrick reflects on his past seven years at TVNZ, he says due to viewer behaviour and technology having changed massively, so has the network.
“What advertisers need has changed too…you can’t stand still in a moving market.”
Kenrick says TVNZ has been fortunate in that it has been able to build some momentum, so it feels like it is really starting to power ahead in new directions. Explaining that innovations like TVNZ OnDemand haven’t been an overnight success as new vetntures can take many years to get traction, he says it is now reaping the bene ts of many years-worth of build-up and effort.
Managing the migration that’s occurring in terms of viewer behaviour is one of the biggest challenges at present for TVNZ. It would be simple if people were only watching video on television or only watching online but the reality is that they’re doing both, Kenrick says.
“You have to manage both and be able to show up in both these worlds and there’s a bunch of complexity that comes with that. Traditional media are still really signifiant and that’s where most media companies make their money.
“You’ve got to use the resources from that to fund your future growth – it’s all about getting the right balance. If you move ahead of your customers, you create a disconnect, but if you’re lagging behind them then you become less relevant – it’s all about timing”.
In today’s ever-changing media landscape, he says the most critical thing for TVNZ is to try and simplify what they’re doing.
“You can get distracted by all sorts of developments and new things but when you really boil it down our business is essentially built on three things – we need to make sure we’ve got the most compelling content, to make it available where viewers choose to watch it, and to nd a way to turn eyeballs to dollars”.
Talking about profitability and positive results, another challenge for TVNZ says Kenrick is when looking at global competitors that are prepared to lose billions of dollars in the same sector that you’re in, one has to look really hard at the long term versus the short term.
“One of the things we’ve been spending a lot of time on is managing the trade-off between going harder and investing more to build scale in the digital world vs. maximising near-term profitability? It’s relatively easy to maximise near-term profitability but if you don’t have scale in the digital world, you don’t have a future business. In recent time we’ve put more focus on building scale than maximising profitability.”
When asked what he’s most proud of over the past year, it’s always the content, Kenrick says.
“The output of our work shows up on a screen, and for me, some of the local content that we have produced in the last 12 months has been some of the best work we’ve done”.
He’s loved TVNZ1’s The Bad Seed – “amazing drama, brilliantly produced”– and says Wellington Paranormal made a huge impact.
“The growth and the scale that we’re achieving with TVNZ OnDemand is great – for the last 12 months we’ve done 180 million video streams. When you think about a nation of less than five million people to have that many streams, that is quite remarkable”.
TVNZ OnDemand has moved from somewhere you might watch the TV shows you’ve missed, says Kenrick, to an entertainment option in its own right.
“I think it sits alongside the international offers as being one of the key services that people will use to watch content online. It’s something we’re excited about and committed to growing even further”.
Kenrick admits the success TVNZ has had with OnDemand and the bulk of innovation has been geared towards the viewer, but what it is looking at doing in the year ahead is really lifting innovation that it is creating for advertisers.
“Now we’ve achieved critical mass scale of viewers, we’re putting greater focus into developing more targeted and addressable capability and how we can deliver more value for advertisers, and particularly the data-rich advertisers.”
When asked about the general media landscape, Kenrick says the challenges for the sector are clearly evident and have been talked about by many.
“You have to move past worrying about that, to focusing on why we do what we do and what’s the best way to go forward. The need for people to be informed is a long term basic human need…and in the busy lives we lead we all need a bit of escapism and entertainment. If you know that what you’re doing is focused on a long-term sustainable need for consumers, then the only challenge you need to focus on is how do you go about meeting that.”
Kenrick says the main priorities for TVNZ for the rest of 2019 are around growth on OnDemand, providing more innovation for advertisers, as well as continuing to innovate for viewers.
“We get a lot of feedback – both good and bad – because New Zealanders give a damn about what we do, and that keeps us on our game. Our sustainable point of difference in the market when you’re competing with global players is local content, local voices and local stories which is what sustains us and marks as us out as different.”