New Zealand's first television broadcast took place in June 1960. Initial broadcasts, limited to a few hours per day on one channel, were to households in Auckland, with transmission spreading to other parts of the country over the following two years.
Television sets were added to the consumers price index (CPI) basket in 1966 as a result of a review of the goods and services in the basket undertaken in 1965 (based on spending patterns for the year to March 1963). The previous CPI basket review was in 1955.
In February 1966, the average price of the 23-inch black and white television 'consolette' being tracked in the CPI was about £131 pounds. Allowing for general inflation, that's equivalent to about $4,400 in today's terms. In February 1971, the average price of a 23-inch black and white television was about $320. In today's terms, that is equivalent to about $4,000, which means that over the five-year period, television sets had become only marginally cheaper relative to other goods and services in the basket.
Because television sets were relatively expensive at the time, many households chose to hire one rather than buy. In 1971, the average charge for hiring a television set for two years (also tracked for the CPI) was $244. This is equivalent to about $3,100 in today's terms, which would have been a significant outlay for many households.
Colour television broadcasts began in 1973, not long before the 1974 Commonwealth Games in Christchurch. A second channel, TV2, started broadcasting in 1975. In the same year, colour television sets were added to the CPI basket (as a result of a basket review undertaken in 1974). In February 1975, black and white television sets cost about $350, and the 26-inch colour television set tracked in the CPI averaged about $840. In today's terms, that's equivalent to about $7,300, so buying a colour television set in 1975 would have been quite a stretch for many households.
Black and white television sets were removed from the CPI basket in 1979. In February 1979, black and white television sets cost about $360, and the 26-inch colour television sets being tracked in the CPI averaged about $1,200. While the average price of colour televisions had grown in nominal terms from $840 in 1975 to $1,200 in 1979, in relative terms they had become slightly more affordable over the four years, as $1,200 in 1979 is equivalent to about $6,300 in today's terms.
New Zealand's first privately owned channel, TV3, began broadcasting in 1989. The first pay television service, Sky, began broadcasting via an ultra high frequency network to some regions in May 1990, with other regions being progressively added until 1996. In 1997, Sky introduced a nationwide satellite service. Pay television was added to the CPI basket in 1994 as a result of a basket review undertaken in 1993.
Old-style cathode ray tube (CRT) colour television sets remained in the CPI basket for three decades, with the occasional change in size or style made at the periodic basket reviews. For example, from 2002, 29-inch flat screen television sets were tracked, whereas 21-inch models had been priced for some time before that.
Then in 2006, flat-panel television sets were added to the CPI basket, alongside the old-style CRT TVs. Both liquid crystal display (LCD) and plasma display flat-panel TVs were tracked from that time.
As part of the 2008 CPI basket review, CRT television sets were dropped from the basket. LCD and plasma display flat-panel television sets remain in the basket, and free-to-air digital television receivers were added, reflecting the introduction of Freeview.
In recent years New Zealanders have been buying about 300,000 new television sets each year. About two-thirds of these are now LCD TVs. Back in 2004, LCD TVs cost about $3,500 on average. In 2008, the average price was about $1,400 and they tended to be bigger and of better quality, with higher picture resolutions and contrast ratios.
Figure 1 shows how TV prices have changed since 1981. Prices rose by a total of 38 percent from the March 1984 quarter to a peak in the June 1987 quarter, with the rise influenced in the early stages by the lifting of the wage-price freeze and the devaluation of the New Zealand dollar in 1984.
Figure 1
Over the 11-year period from the peak in the June 1987 quarter to the June 1998 quarter, prices fell by a total 66 percent. For the following four years, from the June 1998 quarter to the June 2002 quarter, prices tended to be flat or rising, and increased by a total of 11 percent.
From the June 2002 quarter to the September 2008 quarter, prices fell by a total of 79 percent. Within this period, prices of the 29-inch flat screen CRT television sets tracked for the CPI fell by 58 percent over the four years from the June 2002 quarter to the June 2006 quarter. During that period, flat-panel TVs, although not yet in the CPI basket, became more widely available.
In the two years from the June 2006 quarter to the June 2008 quarter, prices of the CRT and flat-panel TVs tracked for the CPI fell by a total of 43 percent. The price change shown in the CPI is after adjusting ticket prices for any changes in quality (such as to remove the effect of improvements in features).
Watching television has been a part of New Zealanders' lives for nearly five decades now. For all but six of those years, the CPI has tracked changes in the price of buying TVs, hiring TVs, buying television licences and subscribing to pay television, reflecting changes in television-related spending patterns of households at periodic reviews of the CPI basket. In New Zealand, people have gone from watching one channel on black and white 'consolettes' in the mid-1960s (that cost about $4,400 in today's terms), to watching an array of free-to-air and pay channels today on flat-panel colour television sets.
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