Wednesday, 3 May 2017

StuffME - great outcome

The long wait for the Commerce Commission's decision on whether to clear NZ's big media merger ended today, with what Tim Murphy accurately described as 345 pages of unanimous rejection.

Many journalists and media managers are clearly outraged, in a way we seldom see in this country. The ongoing erosion of social services, corporate welfare and tax fraud doesn't generate this media outrage. Nor do the evasions, dissembling and lies of the politicians on whose watch this occurs. But when an independent Commission charged with administering competition laws declines to clear their own mega-merger, well its all on.

Some of the negative comment has ignored the Commission's statutory role, which was determined by the question asked of it by the applicants. The applicants admitted that the merger would reduce competition and sought authorisation, which required them to show that the public benefits of the merger were greater than the detriments. For a media merger, this scope raises all kinds of legitimate concerns, including about the plurality of views.

The lengthy process has also been disparaged, but again, this was largely the applicants doing. Even after the official process of submissions was complete, the applicants continued to send confidential submissions (legal and economic I believe) to the Commission. One can hardly blame the Commission for taking the necessary time to consider these submissions properly, especially since there was no opportunity for merger opponents to comment on these late submissions (not to mention the ever-present threat of legal challenge).

Despite some comments, no-one is disputing that these business are facing serious commercial challenges. Certainly the Commission understands this, as any reasonable reading of the decision will show. Earlier in the process I wrote about hard news as a public good, and how it might be funded.

Industry insiders have got their thinking caps on too. Just yesterday, the NBR quoted some anonymous soul ($) suggesting collaborative models that don't need mergers, including
  • pooling editorial resources (similar to the NZPA or the AP);
  • pooling technical resources (to achieve economies of scale with technical infrastructure); and
  • the development of an innovation task force focused on evaluating and implementing new business models.


These collaborations would site nicely with another good idea floated today for a return to local ownership.

Innovation won't stop and I bet it'll be stronger as a result of this decision. After all, the applicants really did admit that they don't know how to fix their problems and just need more time and money to figure out the answer!

There is one further reason to applaud this decision. The Commission, relying largely on its own analysis has faced down a very aggressive barrage from two large and influential companies. That is a good sign for the future.

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