Tuesday, 15 November 2016 14:05

New Zealand Newspaper Chains Fairfax and NZMEMust Be Allowed to Merge to Survive

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National Press Club president Peter Isaac interviewed about Commerce Commission upset merger veto.......

Napier - MSCNewsWire, Tuesday 15 November 2016

If someone from the two chains contacted you and asked, What should we do now? What would you tell them?
My instruction would be to turn their strategy on its head and go in next time at this democratic literary end which means furnishing evidence of the freedom that the two pending proprietorial partners already allocate to their individual newspaper editors, and have done for many years.

The Commerce Commission would require evidence?
The Commerce Commission response indicates that it wants working real-life examples of the chains’ ability to allow their editors and thus their newspapers to enjoy the freedom to say pretty much what they want to say. I would suggest for example that Fairfax management for one refers to the separate nature of The Dominion and The Evening Post which for so long co-existed under their old INL banner. They were entirely separate in regard to editorial staffs. They looked utterly different and had quite different contents and opinions. Similarly now with the Waikato Times, for example, which happily still co-exists under the Fairfax banner. Similarly with for example the Nelson Mail and of course with the The Press of Christchurch, Southland Times also in the stable, and so on.

Can we assume that the Commerce Commission is aware of this?
The point that the two groups need to make is that it is simply not in their interests to have their combined newspapers all singing the same song. These newspapers must reflect their own communities and the issues therein. In my many years involvement with INL/Fairfax in a number of regions I cannot recall even one incident of the management strong-arming anyone, anywhere, to follow this or that party line.

Isn’t the Commission of the opinion that they will publish just the one nationwide daily?
They have tried this from the Wellington end and also from the Auckland end on several occasions. The result has always been the same. Failure. The national daily business model does not exist here and the reason is that subscribers insist on localised news from their own localised newspaper. The proof of this theory is the litmus test in the form of the chains’ holdout, the flourishing and regional Otago Daily Times. Even Rupert Murdoch could not get off the ground
a national daily here.

There are no guarantees that this hands-off legacy will continue?
You have now several government-sponsored referee organisations. The Press Complaints Commission, the Advertising Standards Commission to name just the direct ones. So in the event of the amalgamation there exists in place these pressure valve authorities on subscriber daily newspapers. The state determinedly holds onto its own broadcasting channels, so there is a ready diffusion for the result of any such arbitration. In fact, if I had anything to do with the two newspaper chains and their dealings with the Commerce Commission I would start lobbying now for the re-instatement of Column Comment on the government’s own television channel.

Column Comment was the de facto newspaper referee for decades and was taken very seriously by newspaper people at all levels, more seriously, I think, than the channel itself realised. I know a version of it has been reproduced on the government’s Radio New Zealand. But it was the television delivery that carried the punch to the readers and thus to the industry itself. I don’t think anyone would suggest that such Column Comment commentators as Ian Cross, Keith Ovenden or the late Neil Roberts, among other presenters, could be bought.

It is said of the New Zealand press that it is either boring or sensational?
You could say the same thing about the press anywhere in the world. A point not fully understood about the industry in New Zealand is that for legislative regulation reasons it took much longer here to establish Sunday newspapers than it did in the rest of the English-speaking world. When they did emerge I do concede that they tended toward the sensational. But if you look at the chains’ bulldog editions, the Saturday ones for weekend carryover, then they contain a greater proportion of what you need-to-know instead of what you-want-to-know frivolity.

Where are the proprietors going wrong then, that they need this shotgun marriage, and yet have now been left dangling so embarrassingly at the altar?
They thought that the Commerce Commission would see things from their point of view, the one centred on economics. In the event the Commission saw things from the literary angle. Bureaucrats and newspaper people share one thing in common--they must not make assumptions with legal outcomes. This is a resounding lesson to the industry.

Your advice to the still-betrothed newspaper chains is?
To fence off their spread sheets and get onto the Commission’s own wave-length which in the Commission’s own words is this literary liberal democracy preservation one. The chains’ message should be clear. It should be “if we are not allowed to merge then we will even overtake China within 10 years because there will be no daily newspaper proprietors in New Zealand whatsoever, and thus no daily newspapers free or shackled.”

Still, there remains the argument now that others will rush in and fill the gap?T
hey will and they will be part of the free-model that the hitherto two subscriber daily chains will have already filled with their own weekly free-sheets. Nobody not even the Horton family has been able to start up a subscriber daily newspaper. Once they go, they have gone for ever.

In spite of the media being such a studied subject at universities, there is little in the public domain about newspaper economics?
You have this argument to the effect, Oh! We will have as they do in London these free dailies. But in New Zealand there is insufficient commuter intensity to underpin them. Even in Auckland. As it is in New Zealand the weekly free-sheets do best in rural-provincial areas where the population is older and there is thus a lower take-up of screen-delivered free-model news and information in general.

Your point being?
That once the current chain dailies disappear, the ones that dot the nation from Invercargill to Whangarei that they cannot be replaced by other subscriber dailies. Only by free sheets.

You were surprised at the Commerce Commission’s decision to stall the Fairfax-NZME merger?
I was and I was in good company- -that of the two chains for a start.

Then you must have shared with them an underpinning belief?
If you read between the lines of what emerged from the episode then we all got it wrong. The assumption was that the Commission as a government organisation would have been primarily pre-occupied with the cost in human terms of a centralisation of mechanical services, notably of the rotary presses. In the event the Commission saw the fusion in an intellectual context and said so unequivocally in terms of what it saw as this need to preserve the “liberal democracy” through diverse newspaper ownership.

You didn’t see this?I did the same thing that the strategists of the two chains did. I forgot my history. There is a strong backbone for this kind of regulatory reaction. The News Media Ownership legislation designed to keep Lord Thomson out of New Zealand remains the best example. So I was party to a fault that I routinely accuse everyone else in the industry of committing which is that of a failure to put issues into historical context. Background in other words.

Do you think it is curious the way in which certain journalists post Commerce Commission have turned on their paymasters and accused them of being out of touch?
This is pretty much confined to older opinion peddling wafflers who talk in terms of the bosses needing to bring their editorial, data and privacy codes up to “international best practice” and suchlike. The proprietors are not running localised versions of United Nations. Not so widely known is the reason behind the often contradictory nature of daily newspaper content. They are in fact purchased and read by baby boomers and beyond. Yet the editorial formulation is aimed in large measure at the age categories which no longer actually buy newspapers but who view them via the internet editions, the free model in other words. . These are the people in their 20s 30s. It is this category, the early home-buyers, that the property sector, overwhelmingly the major advertiser, needs to reach.

How would you approach the government itself, the ultimate arbiter?
I would quietly ensure that MPs became aware of something which is in fact considered best practice in some other OECD nations which is taxpayer subsidy of dailies in order to keep them afloat.

Final point?
If I was remotely responsible for the return match with the Commerce Commission I would illustrate on what a delicate economic thread hangs these nationwide subscriber daily newspapers. To reinforce this point I would ensure that there was someone with no particular axe to grind, perhaps one of these academic types you refer to, who would step up and point out what a remarkable job the two chains have done in maintaining this score or so of daily newspapers in a population equivalent to that of many global cities and how this feat can only be sustained by the proposed amalgamation. The stormiest metropolitan editor I ever worked forwas the late Frank Haden. The unbiddable Haden loved imagery. He would say that it was the taste that any story left in the mouth of the reader that mattered. The taste the two chains with their revised submission should leave to linger in the collective palate of the Commerce Commission is this:-

Even if we wanted to, tried to, align our daily newspapers in a constant state of editorial harmony we could not achieve it. The reason is that our subscribers would bar us from conspiring in such regimentation by the simple act of cancelling their subscriptions. They would in response throw in their lot with the digital free model.