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Fairfax-NZME merger declined

Written By: - Date published: 10:02 am, November 8th, 2016 - 20 comments
Categories: journalism, Media, newspapers - Tags: , , , ,

Good call from the Commerce Commission:

Commerce Commission says no to Fairfax-NZME media merger

The Commerce Commission is planning to decline to authorise the merger between media giants Fairfax and NZME, it has revealed this morning.

The Commission’s preliminary view – revealed today – was that the merger would be likely to “substantially lessen competition in a number of markets, including the markets for premium digital advertising, advertising in Sunday newspapers and advertising in community newspapers in 10 regions throughout New Zealand”.

Chairman Dr Mark Berry said the merger would result in one media outlet controlling nearly 90 percent of New Zealand’s print media market, and would be the second highest level of print media ownership in the world, behind only China.

The merged entity would also control New Zealand’s two largest news websites – nzherald.co.nz and stuff.co.nz – which together reached more than four times more readers than the next biggest domestic news website, and would also own one of New Zealand’s two largest commercial radio companies.

“All this would result in an unprecedented level of media concentration for a well-established liberal democracy. …

20 comments on “Fairfax-NZME merger declined ”

  1. ropata 1

    That essay in the Spinoff is a great read. News rooms have been bleeding for 20 years, which is really not cool for democracy

    • Draco T Bastard 1.1

      But, but it’s more efficient capitalism and higher profits…

      • dukeofurl 1.1.1

        Exactly. They are very profitable businesses, who seem to have maintained their earnings despite the fall in turnover and loss of the super profits from classifieds

        • save nz 1.1.1.1

          That’s MSM have become political vehicles in a propaganda sense and tycoons and global syndicates own them and promote their world views.

          Very good call from the commerce commission.

    • Kevin 1.2

      I did my apprenticeship at a newspaper on the production side – not editorial – in the 1980’s, and it is still the most enjoyable job I have ever had. The excitement of working on a daily newspaper and earning the right to comp the front page was a huge achievement as a young apprentice.

      I was lucky to work with some of the funniest, quirkiest and most helpful people I have ever worked with. People devoted to their craft. It saddens me to see the state of print journalism these days and the way journalists and sub editors have ben treated.

      It is no great wonder to me that we have such a disinterested and uninformed population now.

  2. Robertina 2

    Journalists’ union E Tu has issued a statement:
    http://www.etu.nz/article.php?group_id=1115

  3. Richard Rawshark 3

    Right decision. Obviously I would have thought.

    What can I say.. media is pretty munted in my view in NZ, it really needs time to settle into technology changes.

    The advertising issue confuses me somewhat.

    With business doing so well you would think they would be hammering these outlets for advertising space. How can business be doing SO good yet no advertising?

  4. ropata 4

    The state of modern journalism…

    In 1969, the late Nicholas Tomalin, the star foreign correspondent of his day, observed that national newspapers were “feudal fiefdoms all bound up in intimate friendships and shared values”. To get in and get on, he advised, young people needed to cultivate “pals at court”. And the best allies of all were famous or well-connected parents. “Journalism, being fashionable, is a privilege profession. In its present state it shows many of the aspects of the aristocracy, and lineal descent is one of them.”

    Nearly 40 years – and several thousand newspaper leaders about equal opportunities – later, you might expect things to have improved. In fact, they are far, far worse…

    What has happened to journalism since then is what has happened to every other middle-class occupation: it has become a graduate-entry profession.

    The social exclusivity of journalism seems certain to become still more common. “Walk through our corridors,” a lecturer at one university journalism school told me, “and you will hear that homogeneous public school accent.” According to a sample analysis carried out for the Guardian, nearly half the postgraduate students in City University’s journalism school, still one of the main gateways to Fleet Street and the BBC, come from just four universities: Oxford, Bristol, Leeds and Cambridge. All four are among the elite.

  5. Draco T Bastard 5

    The Commission’s preliminary view – revealed today – was that the merger would be likely to “substantially lessen competition in a number of markets, including the markets for premium digital advertising, advertising in Sunday newspapers and advertising in community newspapers in 10 regions throughout New Zealand”.

    Right decision but, apparently, for the wrong reasons. Really, they were only concerned with businesses not having any choice as to who to advertise with?

    Hint: Businesses will advertise with as many advertisers as possible to get the most coverage

    Of course, it’s not that competition in reporting was doing the country any good anyway as the capitalists kept cutting the budget to do real news and kept putting fluff pieces and clickbait up instead of reporting the real news.

    Chairman Dr Mark Berry said the merger would result in one media outlet controlling nearly 90 percent of New Zealand’s print media market, and would be the second highest level of print media ownership in the world, behind only China.

    Obviously they haven’t yet realised that capitalism always shifts ever further towards monopoly. After all, the whole point of capitalism is accumulation of wealth the end result of which must be monopoly. It’s why we have ~60 people owning half the world.

    If it was about competition then such excess of ownership would never be allowed.

    • Robertina 5.1

      No Draco there were two main considerations; the advertising market and journalism quality. They are separate things, weighed up individually.
      Gavin Ellis on RNZ this morning said he was surprised by how much weight given to the latter.
      NZME/Fairfax tried to say quality and democratic plurality are not even in the remit of ComCom, an argument that’s been pretty soundly knocked back by the draft determination.

    • Well Fed Weta 5.2

      “…capitalism always shifts ever further towards monopoly.”

      I’m not sure that is a sustainable position, indeed a more sustainable argument is that socialism leads to monopolies, and inefficient ones at that. But more importantly we don’t live in a purely capitalist economy (and thank goodness for that). We have a mixture of private and public investment and ownership, and that most certainly applies to the media, where public ownership is substantial.

      Private media outlets will ‘publish’ material that attracts viewers/listeners/readers, and therefore revenue (either from advertisers or via ‘paywalls’ etc). Public media outlets have greater latitude to wander into less commercially attractive ventures, but as I have pointed out, the nature of media is changing fast, and most of the quality investigative material now is not found within the MSM. That, in my view, isn’t going to change, but neither is it a great loss.

      • Draco T Bastard 5.2.1

        I’m not sure that is a sustainable position, indeed a more sustainable argument is that socialism leads to monopolies, and inefficient ones at that.

        Wrong on both counts.

        The Four Companies That Control the 147 Companies That Own Everything

        Yes, it’s an exaggeration but not much of one. Mergers happen all the time in capitalist companies. The purpose for them to do so is to increase market share and get rid of the competition. What we see here is another example of that.

        Socialism tends to create monopolies because they’re the most efficient structure for some things. Telecommunications is one very good example. Chorus is still essentially a monopoly because it happens to be very expensive and highly inefficient to run multiple networks. Our attempt to introduce competition to telecommunications has made the entire sector far more inefficient. And that’s without taking into account the dead-weight loss of profit.

        Private media outlets will ‘publish’ material that attracts viewers/listeners/readers, and therefore revenue (either from advertisers or via ‘paywalls’ etc).

        But that’s not the best way as the owners maintain control over what’s published meaning that we get biased reporting that’s often lacking many facts. Nor do they hold power to account as they should.

        Public media outlets have greater latitude to wander into less commercially attractive ventures

        They’re still running as a commercial venture which means that they have advertising and are then susceptible to the whims of the advertisers.

        For true journalism to come out we need journalists who are neither beholden to the state nor to the capitalists. For that we need two things:

        1. A UBI. This would allow anyone to become a journalist
        2. A state publisher that publishes everything that the journalists submit, i.e, it wouldn’t have a say in what’s published. It would also materially support (Plane tickets, expense accounts, cameras, etc) any investigation that any journalist or group of journalists did.

        • Well Fed Weta 5.2.1.1

          Hi Draco

          I can’t access the Forbes article, sorry. Is it behind a paywall? Nevertheless, your example of telecommunications is a poor one. The Telco industry is highly capital intensive, and unlikely to attract a large number of players irrespective. Conversely, most capitalist states consist of large numbers of small competing businesses. Unlike socialist states. I’m also not convinced you will find much support for your contention about the efficiency of the telco sector from anyone who remembers that sector pre competition.

          “But that’s not the best way as the owners maintain control over what’s published meaning that we get biased reporting that’s often lacking many facts. Nor do they hold power to account as they should.”

          How does that differ from public broadcasting? Public broadcasting in it’s many guises is heavily slanted. At least with private broadcasters the bias is obvious and often declared.

          A state publisher will be subject to precisely the same editorial bias as private publishers, perhaps more so. Have you listened to Radio NZ recently?

          • Draco T Bastard 5.2.1.1.1

            I can’t access the Forbes article, sorry. Is it behind a paywall?

            the headline says it all really but I believe you need to register which may possibly require payment now. I registered with them a long time ago before they put up the present system and so still get limited access.

            The Telco industry is highly capital intensive, and unlikely to attract a large number of players irrespective.

            Yes but that’s not the point. The point is that it’s inefficient and wasteful to have more than one network, more than one bureaucracy to run it, advertising, profit, and that a monopoly reaches the best possible economies of scale.

            Competition increases inefficiency but a monopoly should never be privately owned. It must be a government service that provides no profit. And that means that all the profit that it represents is not available to the capitalists and they also lose power as they can no longer hold the country to ransom.

            How does that differ from public broadcasting?

            Public broadcasting shouldn’t be influenced by either owners or advertisers.

            I’m also not convinced you will find much support for your contention about the efficiency of the telco sector from anyone who remembers that sector pre competition.

            I worked in the sector at that time. The “inefficiency” that everyone complained about were simple physical limitations that could not be over come. Interestingly enough, I’ve even worked in the sector since then as well and it’s actually gotten worse because of all the profit taken out. I figure that we’re now at least 5 and more likely ten years behind where our telecommunications would be if we hadn’t sold Telecom.

            We were installing fibre to the cabinet in the 1980s. Telecom was taking it out in the early 2000s and replacing it with copper so as to get ADSL out from the exchanges (usually a bad idea as the speed was way down) instead of installing upgraded cabinets.

            • Well Fed Weta 5.2.1.1.1.1

              “Competition increases inefficiency but a monopoly should never be privately owned.”

              Telecommunications is not a monopoly. Neither does it need to be. We have a far better telco system than when it was a ‘government department’. That says it all.

              “I figure that we’re now at least 5 and more likely ten years behind where our telecommunications would be if we hadn’t sold Telecom.”

              Do you have anything to support that claim? I travel extensively and I can tell you we have cutting edge technology in so many areas. Under a government owned monopoly there is little if any incentive for investment, and I suggest the same applies to the power sector, where NZ’s reforms (by both Labour and National) are internationally recognised.

  6. tc 6

    The appearance of faux concern from the monopolies commission.

    My prediction: issues will be aired, paper will be shuffled, a chinese wall here, a divestment there and it will proceed.

  7. Well Fed Weta 7

    Times they are a changing. We source our information and entertainment in very different ways than we did even 10 years ago, and, just like a raft of other industries, the media have to adapt or die.

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