Fairfax/NZME merger stuffed

The Commerce Commission has said no to the Fairfax and NZME merger.

The Commerce Commission has rejected a merger bid between New Zealand’s two main news media chains, saying it would have concentrated media ownership and influence to “an unprecedented extent”.

The Commission released its final decision on the proposed Fairfax-NZME merger this morning, after several delays.

Fairfax has called the decision “disappointing”.  

Read the full decision here(PDF, 109KB).

The commission gave an initial thumbs-down to the proposal last November, saying it would reduce the “plurality” of voices and would give the new entity too much market power in areas like advertising.

It confirmed that decision this morning, saying its views since November were “largely unchanged”.

“This merger would concentrate media ownership and influence to an unprecedented extent for a well-established modern liberal democracy,” commission chair Mark Berry said.

“This level of influence over the news and political agenda by a single media organisation creates a risk of causing harm to New Zealand’s democracy and to the New Zealand public.”

It was a predictable result.

Fairfax owns many of New Zealand’s metropolitan newspapers, including the Sunday Star-Times, The Press and The Dominion Post; magazines including Cuisine and NZ House & Garden, and the website Stuff. NZME owns The New Zealand Herald, regional and community papers and a stable of radio stations, including Newstalk ZB and ZM.

The companies had argued that a rapidly changing media market driven by digital technology was eroding the economics of their businesses and they needed to merge to survive in the long term.

They said the biggest issue was the emergence of Facebook and Google as news competitors.

If Google and Fairfax were news competitors why do these two muppet companies leap right in and hand over their audience to Facebook?

In an email to staff, Fairfax chief executive Greg Hywood said the commission’s “failure to grasp the commercial and competitive realities of modern media is disappointing”.

“This decision does nothing to address the challenge of the global search and social giants, which produce no local journalism, employ very few New Zealanders, and pay minimal, if any, local taxes.”

An even greater focus on “cost efficiency” would be needed now, Mr Hywood said.

It isn’t the Commerce Commission who has a failure to grasp the commercial and competitive realities…its is both NZME. and Fairfax. The Fairfax boss shows a lack of self awareness for that they created their own demise in the face of those changes.

The day before the release Regan Cunliffe posted this on a  journalist’s Facebook page as a comment:

Online advertising needed to be fixed about 10 years ago. News organisations devalued digital by giving it away. They fought to keep the rivers of gold away from emerging publishers who learnt to survive on the crumbs from the table. They’ve handed their audiences over to the likes of Facebook. Like lemmings, they’ve scurried gleefully towards their demise by embracing the ever diminishing circle of more and more non-news content and fewer and fewer subscribers. They’ve abandoned their integrity and still wonder why they are trusted even less than politicians.

The entire sorry scenario is self-inflicted and many have capitalised on the stupidity of the once mighty.

If taxing a company that has profited from the stupidity of another is the answer, where would Telecom be today? Demanding that Bellsouth fund their landlines? Should auction houses be demanding taxation of TradeMe?

It is an adapt or die market. It’s been 10 years, at least, and they haven’t adapted. Welcome to inevitability…

That fact that StuffMe saw their only option was a monopoly and a merger shows just how old school their thinking is.

If you want to see more stupidity then check what E Tu the union of journalists has said where they welcomed the decision. I bet they will be huffing and puffing in just a few short months when the job losses accumulate.


-Radio NZ

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