Hunkering Down For The Perfect Storm 2017: The Big Shakedown

It’s hardly news that newspapers have been going through heavy weather. But it is clear 2017 will be make or break time for New Zealand newspapers. All over the world papers are closing and downsizing. In general, NZ papers have remained profitable, though this week Fairfax New Zealand announced a $75 million loss after writing down the value of its papers by $100 million. But there are special problems here make our journalism more vulnerable. Partly it is because we have uniquely had no specific media and as a result we have already reached the point where our media is already ruled by duopolies. The next step is monopolies and the Commerce Commission regulating competition, seems wary of taking that step.

The romantic images a newspaper reporter - circa1946
The romantic images a newspaper reporter – circa 1946

Perhaps more than other countries New Zealand newspapers  have been doing the hard work building stories from the start – the heavy lifting some call it. Establishing the detail and diversity of news for other media that follow up on them.  A diminished resources for newspapers has already led to the end of the rounds system – where reporters brvsmr experts in issues or or institions, That has diminished newspaper reporter and had a downstream effect with poorer TV and radio bulletins. Further cuts are inevitable for newspapers and that will flow on to other media. The immediate future will be decided on March 15 when the Commerce Commission decides whether to change its mind and approve the merger of NZME. and Fairfax. The strong criticism in the ComCom draft report issued in November means that few expect merger approval. Commerce Commission chair Mark Berry appeared to go out of his way to discourage expectations for a turnaround, saying the influence of the combined countries as second only to Mainland China,. If it does occur there will likely be a swift change and layoffs .The two firms will stop sending two or more people to cover one news story. Some predict over 25 per cent of 3000 combined staff will go, including dozens of journalists. Even if there is no merger there will be cuts to staff longer term . Newspaper companies will have to assess how they can continue to make money in a market where their business model (they freely admit) no longer works.



A former editor of mine occasionally reverted to gentle reminders when his journalists slipped into cliché. We were NOT to say a combnination of negative effects was  “A Perfect Storm,” we were told. images-37 But the crisis facing the newspaper industry and Journalism in this small country really “The Perfect Storm.”

And while no papers have been cloisng yet, I think it willbe more destructive here than it has been in other countries.

NZME. and Fairfax are pleading for the Commerce Commission to allow a merger that would place put most Kiwi papers, Stuff and into the same company. Also part of the group would be half the country’s commercvial radio brands owned by NZME,and a haldfulof magazines owned by Fairfax. The companies have warned that without the merger they will struggle to maintain services, and tit will be hard to maintain quality journalism.

Such a merger would have seemed astonishing this time last year. The companies were supremely confident when they unveiled plans in May last year. Initially approval seemed be plausible, given the Commission’s rubber stamp reputation for mergers, along with the limitations of its legislation, the Commerce Act. According to Tim Hazledine, professor of economics at Auckland University.

Tim Hazledine,- professor of economics at Auckland University.
Tim Hazledine,- professor of economics at Auckland University.

He said that the Commission had approved 29 of the past 31 merger applications, Hazledine said he liked newspapers, and he was also  concerned about there being voices in the media. But he believed the Commission was “out of its depth” citing the loss of plurality and diversity- as the major reason for rejection in the draft report. The papers deny there will be any loss in these values.


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