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NZ regulator eyes Fairfax/NZME merger

Tuesday, 14 June 2016
By Print21

New Zealand’s antitrust regulator the Commerce Commission outlined key issues it will consider when assessing the proposed merger of the country’s two largest newspaper publishers, Fairfax Media’s NZ division and APN News & Media’s NZME business – including whether it would have an impact on their printing operations.

The two media companies say they can’t compete for online advertising against giants like Google and Facebook without combining their resources.

The commission released a Statement of Preliminary Issues document that outlines questions it will consider in deciding whether or not to approve the proposed merger, including whether the link-up could lead to a domination of the online news space and whether it will affect ‘physical printing assets’ and access to them by independent publishers.

“There has been movement among a number of media companies both internationally and within New Zealand towards the introduction of charges for readers to access online content, known as a paywall,” said the statement. “We will assess whether or not the merged entity would have the ability and incentive to introduce such a paywall and whether or not this would encourage other content providers to follow suit.

“We will assess the extent to which advertisers have a preference for specific media for specific needs, and the extent to which they would switch among them. For example, the extent to which an advertiser would utilise Google or Facebook services as opposed to stuff.co.nz or nzherald.co.nz.

“We will assess the extent to which websites such as TVNZ.co.nz and newshub.co.nz compete with the merging parties for readers, and the extent to which international media companies are able to offer comparable content to New Zealand based parties. Factors we will consider include the importance of New Zealand specific news content to readers and the extent to which competitors can offer local and regional content.

“Both NZME and Fairfax operate physical printing assets and the Commission understands that these are utilised by competitors. The Commission will consider whether access to printing services will be impacted by the merger and whether independent publishers will be able to continue to access these on competitive terms.”

Fairfax operates the largest print media network in New Zealand: nine daily and three weekly newspapers, 61 community publications, 10 magazine titles and six websites, including stuff.co.nz. It also has a minority shareholding in social media site Neighbourly.

NZME owns eight daily and two weekly newspapers, 24 community publications, six magazine titles, 10 radio stations and 38 websites, including nzherald.co.nz. As well as websites related to its print and radio offerings, NZME owns a number of individual websites such as Grabone, Shop Green and Adhub.

According to a News Corp report, Fairfax would hold less than 50 per cent of a merged entity with revenue of $750 million.

The Commission has invited interested parties to provide comments on the likely competitive effects of the proposed merger of NZME and Fairfax NZ. Submissions can be sent by email to registrar@comcom.govt.nz with the reference NZME/Fairfax in the subject line, before 1 July 2016.

A full copy of the statement can be found on the Commission’s merger authorisation register.

 

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