A television executive recently achieved techno-nirvana. He successfully piped Internet video signals into his television receiver. “Brilliant,” said his wife.”Now you can watch television on television.”

This is the world to which we are hurtling. Latest Nielsen data from the States shows while traditional television audiences are holding up, ‘time-shifted’ programme watchers rose nearly 15 % in the past year and video via Internet by TV rose nearly 6 percent. And the really big growth is those watching video on their mobiles – up by more than half year on year, though mostly still clips not full programmes but IPad will change that.

Television companies in New Zealand understand this shift. TVNZ is now a digital media company; Jason Paris who drove that strategy now runs TV3. Sky’s stellar $103m profit of last week is framed as much around add-ons like MYSKY as increasing subscriptions.

All broadcasters face the challenge of Over the Top (OTT) content – that provided by non-broadcasters, with little or no overheads to meet. Within a few short years, free-to-air television will earn as much of their revenue from content shown on screens other than televisions.

So the lines between broadcasting and telecommunications are blurring fast.

Yet the rules are very different. Ask Paul Reynolds. The telecommunications market can be subject to Ministerial intervention faster than you can flick a fly rod. It makes little difference which Government is in power; telecommunications is deemed too important to leave to the vagaries of an unregulated market.

Contrast that with broadcasting which is now becoming paper-thin in separation from telecommunications.

Distribution systems and platforms have technically converged in their use for “broadcasting” (content) and “telephony” (also content). These distribution systems are regulated to ensure competition when used for telco purposes, but NOT when used for broadcasting purposes. Hello?

The pricing and terms of trade for providing “telephony” content services are regulated to ensure competition, but not for broadcasting content even when both are paid for by the user. The logic and equity of that is….what?

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When you blog or comment about the need for us as a nation to have public service television – admittedly an awful phrase – you sometimes get branded elitist, high-brow, wasteful of taxpayer dollars to provide content for a minority.

So what about Desperate Housewives? Rupert Murdoch’s British arm, BSkyB has just bought the UK rights to Home Box Office. That means if you want to watch Desperate Housewives – and a string other such others – you have to pay Rupert for the privilege.

How long before that’s your only option here? Sky is now in close to 55% of NZ homes. It is already pursuing such popular programmes to build on its movies and sport base. While free-to-air television has been knocked for six in the last two years, Sky is regarded as ‘recession proof.’ People stay at home and watch Sky. On Friday Sky will report its latest after-tax profit. Projections are $100m this year, up $9m on last year and growing to $141m in two years. Little wonder the analysts are suggesting Sky can gear up and buy something. TVNZ?

To date, TVNZ and TV3 (free-to-air television) have stayed ahead of Sky in viewership by mixing the likes of Desperate Housewives with New Zealand content.

Big threats are posed for free-to-air television once Sky outbids and buys these rights. We all have a stake in TVNZ. The rising cost to buy overseas programmes against Sky will dilute TVNZ’s capacity to make local content, which can be ten times the cost of buying foreign shows. NZ on Air is our $80m mechanism to keep it Kiwi on television. But note NZOA’s chief executive Jane Wrightson in her latest newsletter who felt like writing a “bleak missive” about challenges ahead and “likely enemies preparing to storm the gates.” Ouch!

So we have a government that refuses to acknowledge the competition issues being presented by the increasing power of Sky, is telling TVNZ to only focus on making money and now is looking at raiding NZ on Air funding which keeps FTA viable and allows it to show New Zealanders themselves on television.

The funds-raid is likely to have been in a ‘white paper’ discussed at Cabinet last Monday or soon will be, on what to do once TVNZ 6 + 7 funding runs out next year; options include do nothing (let TVNZ sort it), run 7 + possibly 6 as a small independent entity, or integrate them with Radio NZ.

The first option could mean a ghetto service at best unless there’s a remarkable lift in TVNZ revenue and there’s a high-risk of that being the case with the other two options. And yes, we might well all be watching most of our content on screens other than our televisions in a decade, but someone still has to fund, create and showcase our stories.

A connection to the TVNZ mothership is crucial in my view. Some 20+ years ago, I worked in London for Channel 4 News. Initially the new channel provided the news. It was simply studio interviews that bored viewers into switching off. Independent Television News, ITN, came in and provided a base news feed to liven up what became an excellent news hour including extended interviews, assisted by being, then, non-commercial.

This does not mean Channel 7 (and possibly 6) have to be run by TVNZ. Point is, television needs pictures and TVNZ is probably best placed to provide some of them, not just for news but through its other programming and archives. But how Channels 7 (and 6?) might best work deserves more than a Cabinet paper and some blogging.  Feedback from a variety of industry and academic sources confirm that a national debate is demanded with opportunity for real input . We want a television future that regards us as New Zealand citizens as well as consumers.

Next blog:  Watching television on other screens and how rapidly it’s changing