A Fairfax-NZME Merger Would Be Bad News For All Of Us – Coalition for Better Broadcasting

7
0

Screen Shot 2016-05-11 at 1.43.28 pm

The proposed merger between Fairfax’s New Zealand holdings and APN’s NZME subsidiary would effectively create a monopoly with too much market power in the newspaper sector, the Coalition for Better Broadcasting has warned.

With the exception of the Otago Daily Times, a merged NZME and Fairfax company would control all the major metropolitan and regional dailies as well as one half of the commercial radio duopoly. Such a concentration of market power, editorial control and agenda-setting influence in a single company poses a direct threat to the news media’s function as Fourth Estate.

Some business commentators have speculated that the Commerce Commission need not intervene to prevent such a merger because digital convergence and cross-platform competition for advertising has rendered concerns over market share within any one media subsector redundant.

The Coalition for Better Broadcasting believes such a view misses the point entirely. The accelerating trends of financialization, consolidation and convergence are undermining the ability of our news media to provide the cultural and democratic functions we need as citizens.

TDB Recommends NewzEngine.com

The print news sector in particular has struggled to cope with declining sales while online advertising revenues have been fragmented across a range of new digital media services. The consequent drive to cut costs and restore profit margins has seen a series of newsroom restructures and moves toward consolidated news operations.

MediaWorks’ ‘Newshub’, Fairfax’s ‘News Rewired’ (including Stuff’s new cooperative arrangement with TVNZ news) and NZME’s video news initiatives are all indicative of intensified competition for advertising and eyeballs/clicks across platforms.

These consolidated operations may be more efficient from the shareholder’s point of view. Unfortunately they all entail employing fewer journalists to produce more content across multiple platforms. The obvious implication is that less time and resources will be available to cover New Zealand events adequately.

Moreover, there is a risk that any company with a near-monopoly in newspapers and majority share of online news might exert an undue degree of influence if its owners or senior editors were to pursue a political agenda in an environment where the weak market competition failed to generate countervailing points of view.

A merged company would also have no incentive to maintain competing publications in the same city/region, probably leading to closures of smaller titles and reducing diversity, local representation and consumer choice.

This is precisely why a merger of news media ownership on such a scale would be unthinkable in any other developed economy. Unfortunately, the disinclination of successive governments to introduce controls on cross-media holdings or foreign ownership of the media makes New Zealand the exception, not the rule here.

The recent events at MediaWorks are indicative of the dangers of operating our media companies according to the short-term imperatives of offshore shareholders who neither understand nor care about the democratic role the news media fulfil as the Fourth Estate.

The parlous state of the newspaper sector evidently makes a merger commercially attractive to NZME and Fairfax. Some commentators have suggested the move would break the current deadlock and allow a transition to paywalls in the hope of regaining the subscription base that the current free online model has eroded.

Forming a newspaper monopoly to facilitate a move to paywalls might be economically rational. But it is still tantamount to collusion to exert control over the supply and priccing of print and online news. Indeed, the anticipated success of such a manoeuvre is premised on the expectation that a merged Fairfax/NZME could exploit its dominance and force freeloading consumers to pay their way once more. Even if the motive is understandable, this is precisely the kind of abuse of market power the Commerce Commission is intended to prevent.

The Coalition for Better Broadcasting is nevertheless sympathetic to the news media’s need to increase its declining revenue base. The public cannot reasonably expect the quality and diversity of news to be sustained if they do not help to pay for it. However, we believe that allowing a merger between Fairfax and NZME would be the wrong way to achieve this.

Three alternatives are therefore proposed:

a) Return to the cooperative NZPA model and, in consultation with the Commerce Commission, negotiate the introduction of a paywall system with a generic subscription model allowing online access to all publications. This would provide a new revenue stream, maintain a level of market competition, regional diversity, include the ODT, and prevent the abuse of monopoly power.

b) Introduce a marginal levy (perhaps 1%) across a range of media services (advertising, subscriptions, telecommunications and audio-visual retail) to provide support for public interest media- including a contestable, platform-neutral fund for investigative journalism.

c) Increase the funding for commercial-free public service news providers which are insulated from market pressures. In particular there is a need to improve the funding for RNZ which has had its budget frozen since 2007, and is now struggling to retain staff and extend its online services.

7 COMMENTS

  1. I was told years ago when my Dad was alive in Australia that when the Australian press was taken over by Rupert Murdock it would throttle Aussie?

    Aussie has at least a free voice in ABC and a Corruption Commission we have neither now.

  2. Problem has always been that we don’t have a national newspaper (though most of us have a National newspaper), and each centre has a monopoly situation. At least we have had a smidgeon of competition between TV1 and TV3, and between the online services of the duopoly. So far.

  3. It won’t be bad for the rest of us in the sense that it couldn’t get much worse than it is now.

  4. The two media outlets are merging ostensibly for financial reasons.
    I don’t believe it.
    This is just another step in the plan by the political right to achieve complete MSM dominance.
    A media almost totally controlled by these means their publications will be little more than outlets for the new National government Ministry of Spin.
    When it comes to cutting journalists, those who stay will be the ones who have demonstrated the greatest National Party boot licking skills
    The truth and objectivity will no longer matter,

  5. We are devoid of real news with the Herald the only news we get in print,it might well be called John Key Spin News.NZ is being deliberatly dumbed down for information .
    Something big is happening that we wont be aware of unless we read alternative news.
    Joke of the week Judith Collins is going to represent John Key in talks overseas about ending corruption,it would be an even bigger joke if Key himself were a speaker.
    A very strange article about Obama and the end of his presidency is in Wake up New Zealand today,very strange indeed .
    Seems to infer the end of the Cabals is around the corner.
    States Obama has already resigned (not confirmed) .

  6. We are devoid of real news with the Herald the only news we get in print,it might well be called John Key Spin News.NZ is being deliberatly dumbed down for information .
    Something big is happening that we wont be aware of unless we read alternative news.
    Joke of the week Judith Collins is going to represent John Key in talks overseas about ending corruption,it would be an even bigger joke if Key himself were a speaker.
    A very strange article about Obama and the end of his presidency is in Wake up New Zealand today,very strange indeed .
    Seems to infer the end of the Cabals is around the corner.
    States Obama has already resigned (not confirmed) .

  7. Hopefully this will open up an opportunity for some true local newspapers ERS to spring up.
    Our local rag has ‘amalgamated’ with two other publications. Seems to me its less local news and lots more out of town real estate listings.

Comments are closed.