Former financial journalist and now media academic at AUT, Merja Myllylahti, comments on the Commerce Commission’s draft determination in the NZME-Fairfax NZ merger application case.

What do you make of Commerce Commission’s decision?

It is the right one, although somewhat surprising. I didn’t expect the wording to be so strong, but let’s not forget that this is not the final decision yet. As the Commission concludes, the merger is not in the public interest and fails the public benefit test, and I agree with that.

Do you think Commerce Commission treated the issue seriously?

Yes. There were 53 submissions against the merger and three supporting it. I and my fellow academics Julienne Molineaux, Peter Thompson, Geoff Leland, Donald Matheson and Sean Phelan put forward the argument that New Zealand media ownership would become the second most concentrated after China if the merger goes through. It seems that the Commerce Commission has accepted that. I think they are seriously considering different points of views, and their draft determination is 195 pages long!

The Commission is worried about the lack of competition which can impact on the quality and quantity of news content. What you think about that?

I think plurality is a concern. For example, think about what would happen to the political and business reporting with the job cuts. I think the healthy competition is good for everybody. If you can only put bananas in your shopping basket day after day, you get sick of them.

There are worries that the quality of news declines if the merger goes through. Can it get worse?

Yes, it is true that clickbait on the Herald and Stuff homepages is rife, and they are full of trivial news. So the thinking here is that it can’t go further. But both papers have some really good journalists investigating issues and doing great reporting. It is most likely that these people will go when the companies start saving money.

NZME and Fairfax see Facebook as a big threat for them. Do you agree?

I understand the argument that news sites are not gaining in digital advertising revenue and Facebook and Google are gobbling it up. But on the other hand news delivery is moving big time on Facebook, and news publishers are sharing the advertising revenue with Facebook. So I think it is not quite correct claim that Facebook is eating all their revenue, as the co-operation between Facebook and newspapers is actually increasing.

The Commerce Commission makes a point about local news provision, and what happens to local newspapers as NZME and Fairfax have overlapping papers. Do you agree with this? 

I agree to a point. However, if the local newspaper is for example sold to a third party, maybe it is healthy. For example, NZME sold its local newspaper in Wairarapa to a local businessman.

Can the media companies survive in digital environment? Are there alternative models?

I think that the root of the problem with Fairfax and NZME is that they started their digital transformation late, and they are still very print-reliant in terms of revenues. There are examples of other companies which are already miles ahead of these two. For example, the Norweigan Schibsted makes 62 percent of its total revenue from digital sources.

I also read recently a fascinating book by Harvard professor Julia Cagé called Saving the Media. She talks about nonprofit media organisations as ideal ones. These are media organisations which are funded by multiple sources such as foundations, trusts, readers and government. I think this model is actually pretty good.

When is next JMAD New Zealand media ownership report out?

It will be published on December 1, and it covers Sky TV-Vodafone and NZME-Fairfax mergers in depth.

Merja was interviewed on Radio New Zealand’s The Panel on Tuesday 8 November. The audio is here.