06 / TVNZ ANNUAL REPORT FY2009Chief Executive’s Overview“Despite predicti<strong>on</strong>s tothe c<strong>on</strong>trary, televisi<strong>on</strong>audiences are attheir highest levelsin nearly 10 years”
07 / TVNZ ANNUAL REPORT FY2009The impact of the recessi<strong>on</strong> hasbrought mixed results for TVNZ.In the first six m<strong>on</strong>ths the companyenjoyed steady progress, building<strong>on</strong> a remarkable number of initiativessupporting our strategy of “inspiring<str<strong>on</strong>g>New</str<strong>on</strong>g> <str<strong>on</strong>g>Zealanders</str<strong>on</strong>g> <strong>on</strong> every screen” andreturning profitability to the company.Then in the sec<strong>on</strong>d half of theyear the impact of the globaland domestic recessi<strong>on</strong> tookhold with advertisers, leading toa sharp downturn in revenue.As a result, the priorities we set inour Statement of Intent have taken<strong>on</strong> a form somewhat different tothat envisaged at the start of theyear, and the company has had todem<strong>on</strong>strate a new level of agility andadaptability to bring us to the closeof the year as a profitable entity.The Company’s progress against itsbusiness priorities is set out below:1. TV ONE and TV2 channelturnaround and c<strong>on</strong>tentstrategies implementati<strong>on</strong>Despite predicti<strong>on</strong>s to the c<strong>on</strong>trary,televisi<strong>on</strong> audiences are at theirhighest levels in nearly 10 years.TV ONE has c<strong>on</strong>cluded the year withstr<strong>on</strong>g prime time ratings, particularlyin the critical 8.30-9.30pm time z<strong>on</strong>e.TV ONE has successfully launcheda number of new local programmesincluding The Politically IncorrectParenting Show, The Missing and asec<strong>on</strong>d series of The Investigator aswell as some acclaimed internati<strong>on</strong>aldramas such as Packed to theRafters and Eleventh Hour. Othercore local shows such as Fair Go,Country Calendar and Sunday haveall performed str<strong>on</strong>gly through thelast quarter of the financial year.TVNZ’s multiplatform coverage of theBeijing Olympic Games – <strong>on</strong>e of themost ambitious single projects in ourhistory – has been our most successful.Over 17 days the Olympics waswatched by more <str<strong>on</strong>g>New</str<strong>on</strong>g> <str<strong>on</strong>g>Zealanders</str<strong>on</strong>g>than any other televisi<strong>on</strong> event.More than a milli<strong>on</strong> people watchedthe groundbreaking ONE <str<strong>on</strong>g>New</str<strong>on</strong>g>sYouTube Electi<strong>on</strong> Debate, whichmarked the first time a head ofa nati<strong>on</strong>al government and thechallenger for the top job hadappeared in a live televised debate toanswer questi<strong>on</strong>s posted via YouTube.Electi<strong>on</strong> night coverage itselfreached 1.9 milli<strong>on</strong> viewersduring the course of the night.By January, ONE <str<strong>on</strong>g>New</str<strong>on</strong>g>s had achieveda run of 13 c<strong>on</strong>secutive m<strong>on</strong>ths of year<strong>on</strong> year growth, with the <str<strong>on</strong>g>New</str<strong>on</strong>g>s c<strong>on</strong>tentexpanded and enhanced <strong>on</strong>line viatvnz.co.nz and, from August, msn’slocal news and entertainment website.As part of the implementati<strong>on</strong> of theMaori programme strategy, Te Kareredoubled in length, its producti<strong>on</strong> coststopped up with commercial revenue;its reach has increased substantially,from 735,400 viewers in June 2008to 1,045,000 viewers in June 2009.TV2 has performed excepti<strong>on</strong>ally well,with June ratings up 33% <strong>on</strong> the prioryear. It has enjoyed a str<strong>on</strong>g reboundfrom the impact of the US writers’strike, and a very pleasing publicresp<strong>on</strong>se to local producti<strong>on</strong>s such asGo Girls and Illegal <str<strong>on</strong>g>New</str<strong>on</strong>g> Zealand.For the first six m<strong>on</strong>ths of 2009, TV2’saverage audience in peak time [6pm– 10.30pm] was up 10% <strong>on</strong> the sametime in 2008, and the highest since2006. Daytime audience levels in the5+ demographic were the highestsince 2004. In the commerciallyimportant demographic of HouseholdShoppers with Kids aged 0-14, June2009 was the highest rating m<strong>on</strong>thsince June 1996 – a 13 year high.The channel is well positi<strong>on</strong>ed toc<strong>on</strong>tinue this performance into 2010with compelling new internati<strong>on</strong>aldramas The Mentalist and Fringeand two new local dramas TheCult and This is Not My Life.2. Advertising revenue growth andsales ‘go to market’ transformati<strong>on</strong>This year TVNZ’s sales teamembarked <strong>on</strong> a watershedtransformati<strong>on</strong> of the relati<strong>on</strong>shipwith clients, which shifts the focusfrom a product-driven offering toa tailored, customer soluti<strong>on</strong>.In order to align TVNZ’s sales processto the evoluti<strong>on</strong> of TVNZ as abusiness, TVNZ Sales has become abusiness-focused partner for strategicagencies and clients. This evoluti<strong>on</strong>has filled a void in the market,with advertisers wanting greaterintegrati<strong>on</strong> with media partners.TVNZ Sales has undertaken to fullyunderstand the business issuesof its clients, to become a trustedbusiness c<strong>on</strong>sultant rather than justan implementer of a media idea. Anumber of advertisers have embracedthis new approach to develop andexecute innovative new advertisingscenarios. Notable examples arethe Ford Fiesta “This is Music”vignette series which used TVNZprogramme producti<strong>on</strong> resourcesto create a series of 8 programmelikevignettes playing across TVNZ<strong>on</strong>-air and digital media channels;the fully interactive Noel Leemingpartnership with Wheel of Fortune;and the <strong>on</strong>-air sp<strong>on</strong>sorship and instorepromoti<strong>on</strong>al activity by Tip Topin partnership with Stars in Their Eyes.3. Fiscal turnaround momentumThe impact of global recessi<strong>on</strong> <strong>on</strong>our advertisers was sharply felt atthe start of the March quarter, witha further deteriorati<strong>on</strong> in the Junequarter. From a positi<strong>on</strong> of 1.1%growth over the 2007 calendar year,the company moved to a defensivepositi<strong>on</strong>, taking rapid acti<strong>on</strong> in aprogramme to remove $25 milli<strong>on</strong> ofcost from the business before the endof the financial year. Regrettably, thisincluded more than 80 redundancies.
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