The New Zealand television advertising market is slightly behind the huge bounce being found across the Tasman in Australia, but TV ad revenues have still recovered at an amazing rate from the doldrums of the global financial crisis barely 18 months ago. Television revenue for the first quarter of 2010 was NZ$122 million, an increase of NZ$3 million or 2.9 percent from the $118.6 million achieved in the first quarter of 2009. The increase shows figures from all the major New Zealand Networks: TVNZ, MediaWorks TV and SKY Network Television (including Prime). And Rick Friesen, chief executive, New Zealand Television Broadcasters’ Council says that the market is heartened by the positive results. “Television viewing is at record levels, due to the improved quality now available in New Zealand due to digital and HD transmission,” Friesen says. “Consumers are buying bigger and better TV sets and recorders and are using them more, making television a better buy for advertisers.“ And while the council says that the recovery is still in its early phases and that the industry is remaining cautious “anecdotally, the second quarter seems to continue the trend of slowly increasing revenue”. And there is assistance from an unusual source driving consumer ads, with Freisen adding that a governmental tax hike is also have a positive effect on the television ad market. “The October 1 increase in GST (Goods and services tax) is likely to see increased retail advertiser spend in the two months leading up to that date, as consumers cash in on the savings prior to the rise,” he says. Rawinia Newton, director of advertising sales at Sky Television, owners of both pay- TV platform Sky and free-to-air channel Prime, says she has already noticed a boost in bigticket items ahead of this tax rise. “For the last two quarters we’ve been in growth which has been a change so things are looking positive,” says Newton. Sky cannot release actual figures until they are provided to shareholders but she estimates double-digit growth for both pay-TV and Prime. The Pay-TV market has 50 percent penetration in New Zealand and subscriptions stayed strong during the GFC but Newton said that some of the major international advertising categories were spooked by the global downturn and she will be looking forward to the return of these ad dollars in the second half of the year. “There were some key categories last year who stopped advertising altogether such as automotive and finance,” Newton says. Jeff Latch, head of television at TVNZ agrees: “Demand has picked up from some categories that went soft through the financial crisis and we are starting to get more investment coming in from the international brands.” Latch says the last quarter for TVNZ is about 5 percent up year-on-year and that “forward bookings are looking strong as well, so demand is picking up which is really pleasing”. What’s also pleasing for the industry is that local content is driving a lot of the advertising dollars with perennial soapie darling “Shortland Street” still a strong advertisers’ favourite. TV One also reports that the New Zealand version of “MasterChef” is faring well as well imports such as the HBO series “The Pacific” which did particularly well for TVNZ and “Criminal Minds”. Research company BuddeComm recently reported that local content on television has increased nearly 500 percent since 1989 while last month (June) New Zealand¹s first TV channel Heartland — containing 100 percent local content, such as new drama hit “Go Girls” — was launched by Sky and TVNZ to solid ratings figures. That is not the only innovation at Sky, which went fully digital at the beginning of the year, well ahead of the government’s required analog switch off date of 2015. However, the general nationwide target of 70 percent of households converted is likely to be matched earlier that this and the switch-off date may be brought forward to 2013. There has also been a flurry of media speculation surrounding the pay-TV group after News Corporation made its multimillion-dollar move on the UK pay-TV company BSkyB. Analysts immediately crunched the numbers on Sky and deemed it to be a possible future takeover target. Not only was Sky considered good value but the argument was put forward that News might be seeking to combine all global Sky satellite businesses into one powerful entity. This is still firmly in the speculation stage, however. But pay-TV is not the only emerging area, New Zealand is also discovering the beauty of the online catch up service. Says Latch: “Broadcast free-to-air channels working in conjunction with online catch-up services and video on demand is actually working quite well.” Newtown points to online as being one of the few areas to thrive in the downturn unscathed saying that “last year online grew 11 percent, the one are of media that did grow”. But Rick Friesen from the Television Council says it is still too new a medium to really change the advertising landscape. “Online catch up services account for less than 1 percent of television advertising revenue,” he says. “While catchup is a convenience for some viewers, there is no significant movement of advertising dollars to these services.“ But online is having some effect on content. The interactive nature of the medium meaning that the networks needs to think ahead to online viewing when the local content is commissioned and shot. “The [online] market is developing for content too,” says Latch. “And we are finding ourselves producing additional material that can deepen the engagement with viewers online, so it’s really the two mediums working together.”