14 Aug 2016

Independent publishers question mega-merger

From Mediawatch, 9:10 am on 14 August 2016

If a proposed merger between New Zealand’s two biggest news publishers – Fairfax Media and NZME  - goes ahead, 89 percent of the country’s daily papers will be controlled by a single company.

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It’s a scenario many of the country’s independent publishers oppose with some arguing it will lead to the premature death of daily papers around the country.

Some are asking whether the country’s papers might be better off returning to local ownership.

In their application to the Commerce Commission, Fairfax Media and NZME argued not only would the merger be good for journalism, it was necessary for their continuing viability.

"Quality journalistic content that consumers will choose to engage with is the only competitive edge available in a digital world, where anyone can create and upload content. In this digital world, the Parties compete against both global content giants with scale advantages, and small digital-only start-ups and blogs with low cost bases… The Transaction will allow the merged business to deliver enhanced quality and diversity of editorial offering."

But most of the 49 submissions received by the Commerce Commission opposed the merger on the grounds that it was bad for journalism, bad for democracy and would threaten the viability of the country’s few remaining independent newspapers.

A number of those submission suggested that locally owned companies would do a better job of running the country’s provincial newspapers than a merged Fairfax/NZME entity -  focused primarily on digital media.

Wairarapa Times Age editor Seamus Boyer

Wairarapa Times Age editor Seamus Boyer Photo: RNZ/Jeremy Rose

John Goulding, the general manager of the Greymouth Star company which publishes the Greymouth Star and the Hokitika Guardian, wrote in his submission that the two newspaper giants were partially responsible for the economic difficulties facing newspapers today.

"The oligopoly situation these two companies have occupied since the 1980s has been to the detriment of the industry as they have battled each other both in terms of advertising dollars and readership with a race to dominate the digital field. This has resulted in non-economic (predator) pricing of advertising and readership moving on line at the expense of print but sacrificing the revenue stream that print provides to fund journalism."

Mr Goulding told Mediawatch he was concerned predatory pricing could become even worse under a merged media company but he was confident the locally owned Greymouth Star and Hokitika Guardian – which employ 50 people – would still be viable.

Back in local hands

Wairarapa Times Age Building

Wairarapa Times Age owner Andrew Denholm and editor Seamus Boyer outside the paper's distinctive building Photo: RNZ/Jeremy Rose

The Wairarapa Times Age was sold back into local ownership by NZME in June. Its new owner is the former general manager Andrew Denholm, who said the local community has welcomed the move.

"The feedback in the community has been overwhelmingly positive. I guess some of it is anti corporate … there was a root for the underdog … but the support has been very good,"  Mr Denholm said.

Mr Denholm didn't make a submission to the Commerce Commission and isn't overly concerned about the possible merger between NZME and Fairfax Media.

The paper's new editor, Seamus Boyer, said the change in ownership has seen the company increasing the number of journalists from five to seven.