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3. How to Pay for it All

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A levy is simple, cost effective and would work

A levy would require commercial broadcasters (SKY, TVNZ, Mediaworks) and ISPs (Telecom, Vodafone, Orcon etc) to pay a tiny amount of their revenue to a fund that is then distributed to public service broadcasting and media. This would be:

  • cost-neutral for the taxpayer
  • beyond the reach of politicians
  • administered by a fully independent agency
  • worth at least $60m - from just a 1% levy.

This idea is not new. Levies already work well in many countries including France, Spain, Ireland, Estonia and Australia. In the UK Channel 4 was established with a levy on the ITV network. In fact broadcasters in NZ already pay similar levies to fund the Broadcasting Standards Authority and Radio Spectrum Management at MCH.

The stumbling block is convincing the ISPs and commercial broadcasters. They won't want extra costs that might affect profits. To this we say:

"We have to stop thinking of TV and online media as just a commodity – it's part of our culture."

Kiwi culture is reflected and defined on TV, radio and online - our society an

d our national pride is deeply affected by our media. In the same way our parks and beaches are public spaces, so are our broadcast and online spaces, and they play a special role in society. ISPs and commercial broadcasters should view it as a privilege to operate in New Zealand's cultural space – a privilege that comes with an obligation. If they operate profitably in this space - sometimes at the expense of our culture - we value that obligation at a modest 1% of their revenue. It's a snip.

In reality a levy would be unlikely to affect company profits. That 1% levy would probably be passed on to customers through subscriptions, advertising costs or broadband charges. Some might complain that it's unfair for mainstream audiences to subsidise niche content. But that assumes all public service media is high-brow and niche – it's not. Look at the BBC - gameshows, reality TV and light entertainment fit within a non-commercial schedule along with hard-hitting current affairs, documentaries, sport, regional news, minority programmes etc. Public service broadcasting is about ensuring a range of genre and subjects are available for the audience – something for everyone, serving the public.

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Internet Service Providers (ISPs) have a double obligation – they profit in the culture space and they pay nothing for the content (websites, apps etc) they provide access to. In NZ there are many websites, videos and blogs made on the smell of an oily rag. Audiences flock to these sites but their money goes to the ISP. A levy on ISPs would close the loop creating an online eco-system that actually benefits everyone.

If there was funding available, imagine what exciting, ground-breaking and distinctively Kiwi websites could be created.

The upshot is:

  • the internet business model isn't working
  • the market has failed to provide public service broadcasting
  • charging a levy on those who benefit from the current dysfunctional system is the fairest way to fix it.

PayTV Doesn't Pay for its Most Popular

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Channels

NZ's PayTV operators are SkyTV and the smaller cable TV in Wellington, Kapiti and Christchurch owned by Vodafone.

These PayTV operators screen free-to-air channels - TVOne, 2, 3 and 4 - so viewers in remote areas can watch the programmes their taxes pay for. They pay nothing for these channels yet they are the most popular channels on PayTV - 60% of all viewing on Sky is the free-to-air channels. That's a huge benefit SkyTV receives while paying nothing for it. To a large extent, TVNZ and TV3 are subsidising Sky and Vodafone.

Elsewhere in the world, pay television companies pay to screen free-to-air channels - it's called must carry, must pay. The CBB thinks it's only fair that pay television in New Zealand also paid its way.

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