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NZ's media already very concentrated, lacks diversity: report for ComCom

Monday 28th November 2016

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New Zealand's news media is already more concentrated in its ownership than many comparable countries even before the proposed merger between NZME and Fairfax's New Zealand news assets, says a paper commissioned by the Commerce Commission from two UK-based specialists on media diversity.

"Pre-merger, the current situation in New Zealand is different to any of these comparator countries," David Levy, director of the Reuters Institute for the Study of Journalism at Oxford University and Robin Foster, media policy adviser and founder of the Communications Chambers consultancy said in a report dated Nov. 16 and published on the commission's website.

They compared the range of news sources available to New Zealanders compared to similar countries by size or geography: Finland, Denmark, Norway, Ireland, and Australia.

"Judged by the news of major providers, the New Zealand news market is already more concentrated, there is relatively little routine use of news sources from outside New Zealand ... and ... the level of public service provision in New Zealand is relatively low," he said. "The bulk of consumption of news in New Zealand is distributed across a limited number of major brands, the number of which will be even more limited should the merger take place."

The commission has shocked NZME and Fairfax by issuing a strongly negative draft determination opposing their proposal to merge the country's two largest newspaper and online news publishers, whose major brands are the New Zealand Herald, the Stuff website, and a string of regional newspapers, including The Dominion Post in Wellington and The Press in Christchurch.

The companies argue the merger is essential for the commercial survival of the country's largest producers of local news content, who face declining advertising revenues from traditional print publications and ferocious competition from global platforms such as Google and Facebook, which command the bulk of online ad revenue in New Zealand.

The researchers did find that Australia showed an even higher level of media concentration than the current New Zealand situation, with 57.5 percent of the Australian newspaper market owned by Rupert Murdoch's News Ltd.

However, "if this merger were concluded, New Zealand would have an even higher degree of print media concentration than its nearest neighbour or indeed any long established liberal democratic country of which we are aware" at around 90 percent ownership of traditional daily newspaper output.

The research paper discusses at length attempts both to define and to regulate for media 'plurality" - the provision of a wide range of points of view, opinions and media voices in the interests of well-functioning democracies - but found that many such efforts had been difficult to implement.

The authors reject the idea that a growing array of online news sources make the concept of plurality obsolete, "at least at present".

While bloggers and niche publishers might improve plurality, "it is the authority, reach and sustained, consistent and comprehensive activity of the larger established players which often gives those stories national prominence and currency". While more people were finding their news through social media platforms, "they do not, as yet, contribute materially to the supply of New Zealand news through their own investment".

However, the authors are less concerned than the commission about the potential for the merger to allow the introduction of paywalls for news, which competition between Fairfax NZ and NZME has so far prevented.

"Competition between the parties which holds back the introduction of a paywall could ultimately result in lower investment in news provision across the board and less innovation in news services. We do not think the prospect or otherwise of a paywall being introduced should be seen as a significant plurality concern in itself."

They were more sceptical about the publishers' claims that existing editorial practices that are intended to ensure a wide range of voices and opinions are aired would be maintained in the merged entity.

"In the absence of any form of tough and independent behavioural regulation, the delivery of such promises could not be guaranteed."

While the evidence from other countries with populations similar to New Zealand similar suggest that "a scenario without a merger is (commercially) sustainable", the researchers hedge their bets about the longer term.

"Although the current plurality assessment is robust and appropriate, rapid changes in new markets could before long raise further questions around long term sustainability of high-quality news in New Zealand, and the most effective structures and regulatory framework to secure it."

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