Comment: Why the Commerce Commission failed NZ media

NZME

Three years ago I wrote a piece commenting on the myopia of the Commerce Commission in blocking the merger of Stuff and NZME.

At the time, I was staggered by how out of touch with the modern world the members of the ComCom appeared to be. They all had marvellous legal and finance pedigrees, but not what I would refer to as real digital insight.

Only one had a Facebook profile and even that profile looked unused. Apparently the great and the good of the digital and media worlds had been called on to present to them, but to no avail. Just as with the attempted Vodafone and Sky merger, the ComCom, not unlike King Canute, had stood and attempted to hold back the waves of the global digital revolution.

The Commerce Commission said the merger of NZME and Stuff “would concentrate media ownership and influence to an unprecedented extent for a well-established modern liberal democracy”.

What, of course, they totally failed to comprehend was that this could never happen because the whole media universe had already been smashed by social media, YouTube and the digital age. It’s just they don’t live in that world, they live in dusty boardrooms in misty white towers.

Maybe, just maybe, the lockdown experience will have widened their insight into the role of technology in our society.

Since that decision, a lot has happened. Not least the Cambridge Analytica exposé, which underlined that the concentration of “media ownership and influence” had already left the country and was sitting somewhere between Silicon Valley, Russia and Cambridge (UK).

What was of pressing concern three years ago, has been put into sharp focus by the recent demise of Bauer NZ and the loss of 80 per cent of our native magazine industry. The rest of it is under massive pressure as economies of scale disappear while overheads such as postage and distribution continue to rise.

Unless the government steps in to do what the ComCom didn’t think was essential three years ago, and supports a merger of NZME and Stuff (assuming Stuff’s owner, Australia-based Nine is still up for it) we could lose forever important local and national voices in newsprint and digital, and of course more jobs in our creative industries.

It would be ironic if one of the biggest victims of the Covid-19 virus was to be large swathes of our independent media, who have worked so tirelessly during this time to bring us the news.

The reality is that the so-called brains trust of the Commerce Commission failed to see the real threats to a “modern liberal democracy” of the merger three years ago. Since then, the magazine industry is on its knees, Mediaworks is on the edge, and other local media operators are finding it very tough to compete against digital global competitors.

The government, which has acted with such agility over this crisis, needs to similarly find creative ways to support the media to protect not just jobs, but the voice of our “modern liberal democracy”.

There are ways to support the media that don’t have to affect the public. The so-called “Netflix tax” was a good start in 2016. Taxing Facebook more makes sense, or forcing them to pay to syndicate our local news – the news, opinion, gossip, sport and anything else that is served up via Facebook reaches massive numbers of New Zealanders every day. Or reducing the tax burden on the media – some tax is surely better than no tax?

And if the NZME/Stuff merger is the right thing for their combined managements, then why should government stand in the way? King Canute couldn’t.

– Ben Goodale is a veteran adman and CEO of strategic marketing agency Quantum Jump.