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MediaMay 3, 2017

The NZME-Fairfax merger is dead. So what does New Zealand journalism do now?


The challenge for anyone, politicians especially, who opposed the idea of a Fairfax-NZME merger on high principle is to find a practical solution as news media go deeper into the storm, writes Toby Manhire

The Commerce Commission would make a rubbish journalist. Not only did it fail repeatedly to meet its own deadlines in issuing a ruling on the proposed merger between New Zealand’s two newspaper giants, NZME and Fairfax (albeit largely in part to late interventions from the applicants), but it showed deeply unjournalistic discretion, managing to keep that ruling secret all the way up until half past eight this morning. Its decision? Nope.

Many backing a merger had held out hope that the protracted assessment – it took almost a year all up – provided time for the tanker to turn. And it had a long way to turn, with the preliminary decision in November last year an emphatic rejection. This morning it transpired that there had been essentially no shift at all. The views of November “remain largely unchanged”, said the Commerce Commission.

Following that draft decision, advocates of a merger argued that the Commission had failed to consider the counter-factual – what would happen to the unmerged companies in the months and years to come. The stark reality is that the prospects either way were, if you’ll excuse the jargon, a bit shit. NZME and Fairfax felt that CommComm had underestimated just how shit the view looked heading down the current path.

Another big complaint from applicants along with many commentators was that the Commission had not grasped the impact of the offshore digital monsters, Facebook and Google, who have been blithely scoffing the local media’s lunch, gobbling up the advertising revenue and regurgitating content, but indifferent to issues of quality or sustainability.

The Commerce Commission chairman, Dr Mark Berry, this morning dismissed those objections. At a press conference in Wellington he said the counterfactual was “the crucial analysis that we undertake” – they had simply judged, to paraphrase, that the merged entity would be a shittier outcome that the alternative.

Berry poured cold water, too, on the Facebook-Google hazard, making the same old points about most readers getting their news from the sites themselves, and social media not producing its own content – music to the ears of Mark Zuckerberg as he counts his money (New Zealand dollars converted into Irish euros and then into greenbacks, even).

The Commission was unpersuaded by the argument that a merger would be better for journalism. A lack of competition could only reduce the “range, volume and variety” of output, said Berry. “Rivalry benefits the public,” he said this morning, and a merged company would “negatively impact the quality of news and the breadth of coverage”.

NZME and Fairfax have both expressed, as you’d expect, “disappointment” at the decision, and they have 20 days to appeal. Will they? Even though all concerned, not least actual journalists, are thoroughly exhausted by it all, probably. Their main case is likely to be that the Commission has over-reached by taking on the function of a media watchdog a la Britain’s Ofcom, where their legislated scope is limited to issues of competition, rather than the democratic function of media.

The Commission did not shy away from using the D-word. “This merger would concentrate media ownership and influence to an unprecedented extent for a well-established modern liberal democracy,” it said. “The news audience reach that the applicants have provide the merged entity with the scope to control a large share of the news consumed by a majority of New Zealanders. 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.”

During the press conference, Berry said that politicians had expressed concerns that a merged company would make it more difficult to get their message out – more on that in a moment – and the impact of the merger on a diversity of views was intrinsic to both the preliminary and final decisions. “The loss of plurality,” said Berry, “is a fundamental concern”.

The challenge to those who have opposed the merger – especially those who have done so with the pious and haughty certainty of distance – is to answer the question: what now? Because, and I write as one who remains ambivalent, there is nothing, really, to cheer about. This has felt like a big debate about which banged-up stationwagon to drive into the storm. Or, for the more pessimistic still, a debate over how to wallpaper the hospice.

A merger would have been horrible, meaning hundreds of job losses. The non-merger will be horrible, too. After this decision, expect to hear the euphemism “consolidation” a lot. As print sales dwindle and print advertising fades, newspapers will close. Vulture funds, some predict, could swoop. The reduction in frequency of the Marlborough Express to three days a week is a sign of things to come – how long until the Dominion Post or the Herald is published on Wednesday and Saturday only? Online, will the race to the bottom continue? It may be true that publishers everywhere are culpable of an original sin in failing to get people to pay for journalism when it first went on ye olde information superhighway, but how do you arrest that, and at least start foregrounding the excellent work that is getting done every day?

One option: do it anyway. Or, at least, cooperate here and there. Already the two big companies have started to share print facilities. Why not extend that collaboration in printing and distribution networks? In the form of pooled reports, photography for the likes of commodity news, court reporting and so on? You could even call it, say, the New Zealand Press Association.

And back to that Facebook-Google thing, the import of which I’m still not sure the Commission really gets. Put it this way: in the full 350-page determination the word Stratford (the Taranaki town, population 10,000) appears 26 times, just four fewer than the 30 mentions of the word Google (the colossal internet company, population quite a fucking lot).

It points out that a merged entity would create a behemoth in New Zealand newspapers, with three times the staff of the others, 90% of daily circulations and the “overwhelming majority” of eyeballs. True enough, but what might be a monolith in that context remains a minimus under the shadow of the digital Leviathans.

To those politicians who were concerned, understandably enough, about the risk that a merged company might diminish their opportunity to get their message out there, that it might make it harder to provide a counter-view to the one that they consider unjustified (or maybe just that they don’t like), please try to understand that the status quo cannot hold. It can’t. If you’re genuinely concerned about New Zealand journalism in the public interest, in the service of democracy, all that, then you could unfreeze RNZ’s funding. You could have another look at TVNZ, which apparently you own, and where excellent journalism is under threat from a blunt-edged profit motive. And you could start getting your head around the corrosion that is arriving directly as a result of those digital giants. You could start taxing them properly, that’d be something. You could even explore a levy hypothecated to a contestable, independent fund for public interest journalism.

The Commerce Commission’s conclusion is that a merger could “cause harm to New Zealand’s democracy”. If that’s true, so could the status quo. Our democratically elected representatives should get busy.

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