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AUCKLAND -- New Zealand's state broadcaster Television New Zealand has been issued a directive from its owner, the government, to run more "minority interests" and Maori programs on its two channels, a move that is worrying advertisers.

The nation's advertisers have been waiting with bated breath ever since the Labour Government, elected in November 1999, promised reviews on advertising to children, advertising of therapeutics and a close look at direct-to-consumer pharmaceutical advertising.

New Zealand is one of the few countries outside the U.S. and parts of Russia to allow DTC advertising.

While the reviews of these forms of advertising have largely left New Zealand's self-regulatory screening system intact, the latest news on the charter has been blamed for depressing already sluggish TV advertising revenues.

Television New Zealand's advertising sales revenue has dropped almost 30% since the beginning of the year, with advertisers claiming they are hesitant to book forward with the new programming directives. TVNZ garners the bulk of all TV ad revenue through its two channels, typically returning around $300 million in dividends to the government each year.

But while some ad men have come out strongly opposed to the government's plans with the charter, others have suggested New Zealand's TV sales are soft as a result of a global trend.

TVNZ's closest rival, Canadian-owned CanWest, which runs broadcast channels 3 and 4, has also experienced a drop in revenues of around $1.85 million in the six months to the end of February 2001.

Minister of Broadcasting Marion Hobbs takes the view that New Zealand's advertising markets reflect international trends, saying a drop in brand advertising has disadvantaged TV while boosting radio and newspaper advertising sales over the period. -- Dita De Boni

Copyright May 2001, Crain Communications Inc.

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