New Zealand’s news publishing merger back on the table

By Dr. Merja Myllylahti

Auckland University of Technology (AUT)

Auckland, New Zealand

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Sure, times are tough for the news media companies in the large Western media markets, but just think how rough they can be for smaller media markets such as New Zealand. In 2019, the country’s media was put up for sale, as the recent JMAD New Zealand Media Ownership Report 2019 observes.

During 2019, Australian Nine tried to sell its New Zealand publishing arm Stuff, commercial television broadcaster MediaWorks selling its television business, and pay-television company Sky TV put its outdoor division up for market. More sales or business closures in the media sector are likely to come in 2020.

Once again, the future of Stuff is up for discussion.
Once again, the future of Stuff is up for discussion.

Stuff is one of two leading news publishers in New Zealand. Its assets included the news Web site Stuff, community site Neighbourly, and newspapers The Sunday Star Times, The Dominion Post, and The Press. So far, there have been no takers for the company despite the fact the company turned a corner and is profitable again. However, in the financial year ending June 2019, the company’s revenue fell 12% from the previous year to NZ$269 million, which is worrisome.

Curious proposal to the government

After media speculation, NZME — the other leading news publishers in New Zealand — confirmed it is in talks with Nine about buying Stuff. NZME owns the NZ Herald, its online site, and approximately half of the New Zealand’s commercial radio network.

NZME’s announcement noted the company has a proposal out to the government regarding a possible transaction, but indicated “these discussions are preliminary and stress that no decision has been made in relation to any potential transaction. There can be no certainty at this stage that these discussions will result in any transaction.”

According to press reports, the NZME’s proposal includes a “Kiwishare arrangement,” which was used by New Zealand’s government in 1990 when Telecom was privatised. That arrangement gave the government the ability to protect free local calls and fixed phone line rentals. In the case of the NMZE-Stuff merger, the government could, for example, ringfence local newsrooms to protect them, making the logic of the merger questionable.

In 2019, the New Zealand Commerce Commission turned down the NZME-Stuff merger because of media plurality concerns. Whether the Commerce Commission would allow the merger to go through this time around remains to be seen.

No digital reader payments at Stuff

It is not surprising that, in the current turbulent media ecosystem, multiple news outlets in New Zealand have introduced digital reader payments. In April, the NZ Herald launched a paywall; according to NZME, “more than 15,000 new subscribers have signed up.”

Additionally, the digital news outlet The Spinoff, which recently celebrated its fifth year, introduced voluntary memberships. Also, for the first time, online outlet Scoop offered paid e-mail subscriptions. The National Business Review, a business newspaper, has digital content subscriptions. Digital news outlet Newsroom charges for its pro content and has voluntary donations in place for general content. Additionally, the non-profit news site Crux has introduced voluntary donations.

Of the major news outlets, the Stuff Web site is the only one without any digital reader payments. However, this might change soon. Stuff’s CEO Sinead Boucher said that because the outlook for media companies has dramatically changed, the company is considering some kind of digital reader payments. In a recent interview, Boucher said, “We are currently looking at the landscape for direct reader revenue and looking at where opportunities are, then we will place a few bets.”

However, the time of introducing any digital payments at this stage might be difficult as the prospect of Stuff’s merger with NZME is being considered.

About Dr. Merja Myllylahti

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