Half the truth and nothing but, Joe Atkinson

The Remaking of Television New Zealand 1984-1992
Barry Spicer, Michael Powell and David Emanuel
Auckland University Press (in association with the Broadcasting History Trust),
$34.95, ISBN 1 86940 151 4

This is a story about a far-sighted and determined group of politicians, government officials, board members and managers who transform a moribund, flabby public service broadcasting monopoly into a highly efficient and profitable electronic communications business. The story is told by three Auckland University professors (of management accounting, public sector management and accounting respectively), which accounts for both its high level of factual detail and its clear if stolid prose.

The dustjacket promises a narrative of “personality and power”, based on “inside information” from the Treasury and Television New Zealand (TVNZ) but this is at best a half-truth. Initial drafts were “read and commented upon by the chairman of the board, senior managers of TVNZ, Treasury officials and the executive director of the Broadcasting Commission”. (p4) The price of access was a confidentiality agreement signed with TVNZ which forced the authors to exclude “commercially sensitive” information but, according to them, “did not affect the analysis or materially affect the form or content of the discussion in the book”. (p4) Thus, within the limits imposed by their focus on “the perspective of TVNZ’s managers and those government officials, ministers and committees involved in making and implementing new broadcasting policies”, (p3) the authors purport to provide “wherever possible … a balanced presentation of opposing viewpoints”. (p5)

When the only viewpoints allowed a proper hearing are narrowly ideological, however, balance is a forlorn hope. Far from being the disinterested scholars they pretend to be, the authors turn out to be blinkered apologists for Rogernomics and the state-owned enterprise (SOE) reform process. Their heroes are invariably apostles of change — dissenting 1986 Royal Commissioner Laurie Cameron, officials committee chairman Jim Stevenson, Broadcasting Corporation of New Zealand (BCNZ) board chairman Hugh Rennie, his deputy and later TVNZ board chairman Brian Corban, State-owned Enterprises Minister cum political-enforcer Richard Prebble and anonymous Treasury officials. Their extra special hero is the charming, single-minded, visionary figure of Julian Mounter, BCNZ director-general and later TVNZ chief executive, ruthless champion of commercialism and “transformational leader” of corporate change.

Their villains, by contrast, are timid, curiously vague figures, apparently wedded to reactionary procedures and blind to their own mistakes — people such as political studies Professor Robert Chapman, chairman of the 1985-86 Royal Commission on Broadcasting, whose “long, rambling report” made “heavily interventionist” recommendations which “ignored many of the economic and technological pressures on the industry” and were “out of tune with the growing importance of neoclassical market economics … [and] with the government’s programme of economic deregulation”. (p9) The Royal Commission’s report is reckoned so disreputable that the professors can’t bring themselves to name its principal author (lest he be acknowledged as one of their own?) while not only does Cameron, as author of a brief dissenting report, get mentioned by name but so does his economist son, Robert, who reportedly ghost-wrote his father’s dissent. And while the commission majority’s arguments against commercialisation are unheard, the minority view is reinforced by quotation. (pp25-26)

Thus the uncritical reader is made to think it entirely fitting that “the broad recommendations of the commission’s majority report were largely ignored and quickly forgotten [while] a number of the suggestions made in Cameron’s minority report were later to be incorporated into government policy”. (p10) Unfortunately, since no “interventionist” voices actually get to speak, the fact that one option triumphed while others fell by the wayside is the sole basis available for accepting the superiority of the former. In effect, the “balanced presentation” promised on p5 is lost by p10 and the authors make no later effort to rescue it. In this they mimic their Rogernomic heroes who habitually promised open consult-ation without delivering it.

2

Preoccupied with the SOE model and its narrowly commercial objectives, the authors admit: “We have not attempted to tell the story in cultural or political terms. We leave this for others more skilled in these forms of analysis”. (pix) The admission is unpersuasive, however, because the bedrock assumption of the book — that shareholder profit is what really matters — is already a form of cultural and political assessment. Far from alleviating the need for qualitative assessment, the authors’ refusal to survey the outputs of the industry they are studying replaces analysis with prejudice. The refusal to evaluate programme quality effectively values it at zero. As Alan Cocker recently remarked of a similar vacancy in the Institute of Economic Research’s report Broadcasting in New Zealand: Waves of Change (1994), “it is as if the authors observed the waves without noting the changes they wrought”.

The authors repeat the neoliberal myth that corporatisation was the inevitable result of technological change. It is true that new communication technologies introduced channel (if not programme) profusion but the newly-discovered feasibility of market supply does not establish its desirability. In none of its many guises is the “free” market value-free and this is acutely so in the case of broadcasting. It doesn’t matter whether broadcasting is looked upon as an economic or a political phenomenon. It is in any event intrinsically a common good and as such prone to market failure.

Even a group of business school academics might have cited some of the long-acknowledged economic difficulties with commercial broadcasting. Considering broadcasting as an information market, for instance, they might have noted:

• Information markets work most efficiently on the demand side when covering marginal costs only. But these extra costs are zero in broadcasting because, once equipment and personnel costs have been incurred, it is no more expensive to address three people than 3 million.

• Information markets tend to work badly in the short term where the nature and consumption of the product are determined at the same time, as they are in television and radio. Viewers and listeners don’t know what they’re “buying” until they’ve experienced it and, having experienced it, they no longer need to buy it. So serial genres, formats, or timeslots are sold, rather than specific programmes. So unlike markets where one product is indistinguishable from another of the same brand or type, information markets are not very good at self-correction.

• Information markets are even less efficient where the tastes of the consumer and the consumption of the product are highly interdependent. Television viewers are unavoidably ill-informed about their own long-term interests because they are in no position to predict how viewing will affect them, including how it will influence their own preferences about television programming. That is why viewers tend to underinvest in the development of their own tastes and capacities — not because viewers are stupid, but because the costs and benefits of certain types of viewing are only apparent in retrospect.

The foregoing are deficiencies of commercial television in consumption; they do not exhaust the equally obvious market failures either in production or in the interaction of consumption with production. And, because they fail to consider commercial broadcasting as a system of production, they blithely ignore the problem of satisfying the needs of viewers as a community of citizens rather than merely as individual consumers. They falsely assume that television viewers are just like ordinary consumers whereas the truth is that viewers are the product being sold, while advertisers are the consumers.

As soon as you figure this out, the neoliberal model of broadcasting, with its bedrock assumption of individual acts of choice-making by viewers, turns into ideological claptrap. The whole notion of “consumer sovereignty”, so prized by the free marketeers, is actually a sick joke because the “consumers” who benefit most from these transactions are multinational conglomerates whose only interest in the local community of viewers is to extract from it the maximum amount of profit.

The broadcasting conglomerates are anti-competitive oligopolies who drive prices higher while reducing both choice and quality. The programmes are merely a means to generate higher and higher profits. Like toothpaste brands, the proliferating channels are virtually indistinguishable from one another, because it is cheaper to “repurpose” old programmes, existing archival footage and ratings-proven formats than it is to produce new ones. Under these circumstances Saatchi and Saatchi might as well buy TVNZ. Nothing important would change if it did.

The important relationships engaged by broadcasting, politically speaking, are not those between individuals, but those between groups and social structures. The main issue is not whether utilitarian pleasures can be delivered to the maximum number of individuals but whether resources for cultural and social identity are enriched or impoverished by commercial television. What cultural messages does it convey? What range of social identities does it posit? Whom does it encourage viewers to fear or trust? The issues of democracy, community and empowerment, so conspicuously absent from the Treasury model, then move centre-stage.

None of these questions is tackled by the professors.

3

Fortunately, the TVNZ story has a robust life of its own. There is much of value here. The book’s account of what was wrong with TVNZ before deregulation, for instance, is almost worth the cover price by itself.

But the best insights will be garnered by reading against the grain. Read in this way, the book is a mine of useful information about the mentality of the commercial managers who run our television system. There is even the odd unsung hero lurking in the footnotes.

An example of the latter is the former Australian broadcaster, Nigel Dick, one-time chief executive of BCNZ , who lost the boardroom battle of wits with Julian Mounter but whose judgment in all matters was extraordinarily prescient. When he left the BCNZ in 1988 Dick wrote a paper for the Rennie committee recommending that channel 1 be made the sole “chartered” broadcaster in television with a lower advertising load, a premium level of local content and a wider range of social service content. In return, he argued, it should get all the public funding going to television, leaving channel 2 as an unsubsidised commercial competitor to TV3. The authors acknowledge this in a brief footnote but are so entirely out of sympathy with Dick’s proposal that they cannot take it seriously. In my view Dick’s solution came closest to the optimal.

But nobody was listening. Indeed, the corporatisation process was expressly designed to muffle opposing voices. One example was the tactic devised by the Treasury to sidestep opposition at the time when TVNZ’s asset values and financial structures were being determined.

The procedure for valuing broadcasting assets differed from those adopted for earlier corporatisations which allowed prospective board members to play an active role. In the TVNZ case, however,  a procedure was imported which had been employed earlier to corporatise Auckland Airport when “there was going to be the possibility of a lot of conflict”. (p40) The broadcasting company’s asset values and financial structure were fixed prior to the appointment of the TVNZ board. Board members had to accept these preliminary choices as a condition of their appointment. The crucial financial determinations were made by Rob Challinor, executive director of Bancorp Holdings Ltd, in consultation with Treasury officials and the valuation consultant, Fay Richwhite.

This ploy was contrived by setting up a ministerial advisory committee (MAC) comprising the chairmen-designate of TVNZ Ltd and Radio New Zealand Ltd, with Bancorp’s Challinor as an “independent” short-term director, plus Treasury representatives in ex officio attendance. The TVNZ chairman-designate, Corban, chaired MAC meetings but, though he and his Radio New Zealand (RNZ) counterpart “were to be consulted, [they] would not have any formal responsibility for either the valuation or the financial structure of the new companies”. (p41) By such means the MAC worked through “the many issues associated with establishing the broadcasting SOEs, including the appointment of management” [emphasis added] in what the authors celebrate as the most compressed timeframe “of any SOE establishment of which we are familiar”. (p42)

It was all so wonderfully quiet, too. There was only one serious dispute between the valuers and TVNZ managers — on the issue of when high-definition television technology might be introduced. Otherwise, with the Treasury having so artlessly finessed the politics, TVNZ’s transition to SOE status was without incident. The only remaining problem was that Corban was the only person on the SOE’s board who knew anything about the company’s assets, which had the happy corollary that Bancorp’s man, Challinor, was recruited to the board.

There is an air of such insouciant blandness in the way in which the authors describe these manoeuvres. One suspects their privileged access and lack of critical perspective blind them to the wider implications of what they observe. They discern only business as usual where even a marginally more detached observer might catch at least the whiff of backstairs intrigue. With respect to the implications of the aforementioned Treasury sidestep, for instance, they write:

Typically, the new board can be expected to provide the initial challenge to the status quo where an organisation is established as an SOE. However, this was not the case at TVNZ … Partly as a consequence of the design of the process [the change proposal] came from the chief executive and the senior management of the company. With the exception of the chairman and one other … board members were caught on the back foot. Struggling to catch up with the state of play, they could act only as the overseers rather than the instigators of change. (pp118-9)

The possibility that a different group not “struggling to catch up” could act as opponents of change does not seem to occur to the authors, although that was what had persuaded the Treasury to exclude broadcasting professionals in the first place. From their shared standpoint, with professional knowledge defined as “vested interest,” on the back foot is precisely where broadcasters were supposed to be.

In a similar vein, the authors quote at length and revealingly from from the musings of chief executive Mounter:

“Managers couldn’t see the need for this structural thinking change … They would answer ‘We don’t have to do that now. TV3 won’t be on air for three years’. I’d reply: ‘No, we have to do it now.’ That sort of aggression was lacking in the company. Nobody really wanted to be aggressive. At the same time competition was missing in the whole of New Zealand society; people thought of it as dirty pool.” (p.31)

“The opposition is simply the enemy. There is only one rule and that is win, win, win. We are not in this business to come second but, as we have two channels, one of them will have to be second. We are not in the business to come third. That’s their role. It’s their name. They are the third channel. I am determined that this is where they will stay and I think they will find the opposition miserable, uncomfortable, uneconomic, untenable.” (p110)

“I would say that currently 51% to 52% of the staff are real subscribers to the change and I think there are a lot of non-subscribers who have decided to go along as fellow-travellers and not buck the system. However, if there was a hint that they would have support for going back to the old days of protectionism and everthing else, they would drift back.” (p113)

While noting that Mounter’s ruthless executive style had its detractors, the authors ascribe much of TVNZ’s success as an SOE to it, contrasting it favourably with RNZ manage-ment’s more obvious discomfort with untrammelled com-mercialism. “Combined with competition and SOE status [Mounter’s style] created a climate in which initiatives could be taken by other managers. Mounter’s contribution was to create an environment in which managers could manage.”

But “hard-driving” management, with its favoured metaphors of war and aggression and its intolerance of dissent, can also be associated with organisational pathologies of paranoia and “groupthink” which underlie misperceptions of company performance. In view of TVNZ’s penchant for exaggerated self-promotion and paranoia towards critics, detached observers might have reached a less sanguine conclusion about the supposed benefits of this style of change management — especially since several of Mounter’s more ambitious schemes were scuttled by his successors.

4

There are, in short, yawning gaps in The Remaking of Television New Zealand, which the authors sprinkle with unexamined presumptions. They see no major drawbacks to the current New Zealand On Air (NZOA) funding mechanism, for instance, and blame NZOA rather than TVNZ for the minor problems they do acknowledge. From a purely business point of view, the partial funder-provider split of the NZOA system is preferable because, by removing most of the broadcaster’s production responsibilities and distributing public money on a programme-by-programme basis, it guarantees that commercial values will triumph.

Deregulation has increased TVNZ’s profitability but it has contributed nothing equivalent in terms of local content or insulation from political pressures or programme diversity. If it could still be defined as a “public broadcaster” at all, TVNZ is the world’s nadir of public broadcasting; though, by the time you read this, it will have selectively released research findings to shake this conclusion. Its best programmes are screened at inconvenient times and in out-of-the-way places. Otherwise it saturates the prime-time schedule with commercial voices that are fundamentally hostile to the democratic project of building a peaceful community.

Minor tinkering with the present system will further undermine the provision of any kind of public broadcasting funding at all. The latter outcome seems to be the hidden agenda of this book. Snide asides about “influential elites who believe in giving other people what they think they should want, irrespective of whether they want it or not”, (p141) reveal the authors’ defective grasp of the complexities of markets in information and culture and accentuate their refusal to assess the programming mix delivered by the present system.

In sum, this book makes no case against public service broadcasting. Funding is no more the real problem here than technology. No form of payment has ever been universally popular. We pay now several times over: as broadcasting fee payers, as consumers of advertised products, as viewers of interrupted and formulaic programmes and as citizens without the resources for citizenship.

The real problem with public broadcasting is neither money nor technology but a lack of stomach for genuine political debate. And yet, as the health reforms process demonstrates, opposition stifled does not disappear but tends to be displaced into more disruptive and less amenable forms. The recent turmoil over Aotearoa Television simply underlines our chronic need for a non-market alternative to the present system.

And if Mounter’s earlier-quoted assessment of the extent of fellow-travelling within TVNZ is anywhere near to the mark, there could still be enough fugitive public broadcasters among its beleaguered programme-makers to rebuild a chartered public service TVNZ channel 1, subsidised not just by TVNZ channel 2 and the broadcasting fee, but by a levy on the advertising revenues of the lengthening queue of other commercial channels.

Joe Atkinson is a senior lecturer in political studies at Auckland University, specialising in the mass media and political communication. He is writing The New Mediators: New Zealand Politics as Communication for Auckland University Press.

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