StuffMe 2: the return of the beast
Someone still wants to put chunks of our two biggest digital and print media companies, NZME and Stuff, together - possibly by avoiding the Commerce Commission with a legal green light from politicians.
And that someone is not Stuff Ltd. whose chief executive Sinead Boucher told Newsroom yesterday: "That isn't on our agenda at all."
NZME was more circumspect, replying that it had a policy not to comment on such speculation and was fulfiling its obligations to keep the markets informed of any plans that it had.
Word of the revived plan to merge the businesses, or parts of them, has been doing the rounds in Wellington and was aired publicly in a news story yesterday on The Australian newspaper's website. Its report said a plan for StuffMe 2 was being led by NZME and may seek a legislative change along the lines of the law which allowed Fonterra to be created from the Dairy Board and the two huge dairy companies of the time in the late 1990s.
The Prime Minister, Jacinda Ardern, told her weekly press conference she had received no approach on the matter and would not discuss "a hypothetical". But one political source and one senior public servant had heard of the plan to revive StuffMe, with one suggesting a bid for political intervention to make it happen was one mooted scenario.
The previous bid by the companies to merge three years ago was struck down emphatically, twice by the Commerce Commission and then by the High Court and Court of Appeal, which variously found too much concentration of power over the news would rest in the hands of one entity, with detriment to the public that outweighed the multi-million dollar benefits to the struggling media industry.
Since then Stuff Ltd has been taken over by new Australian owners, Nine Entertainment, which tried and failed to sell the New Zealand business before June 30 this year. It has now said it will hold the Stuff assets, which include the country's biggest news website, Stuff.co.nz, the Neighbourly community website and major newspapers The Dominion Post, The Press, Christchurch and Sunday Star-Times.
It is not known if New Zealand Herald owner NZME looked at the Stuff assets when they were on the market, although its chief executive, Michael Boggs, said at the company's announcement of its annual financial result in February that "industry consolidation is expected to continue to present opportunities for NZME".
NZME has since successfully implemented a paywall, charging customers for reading its 'premium' content and likely raising a healthy new line of revenue for its business.
Ironically, that paywall continues to also boost stuff.co.nz as well. The cost of reading news on nzherald.co.nz has seen readers move to the Stuff platform and the Herald's monthly audience fell by around 100,000 readers over the three months since the paywall was launched.
The latest figures, for July, show Stuff growing to its highest result in 15 months at 2,112,000 and the Herald holding at its new level of 1,684,000 unique readers. The gap between the two sites, which late last year narrowed to 13,000 readers, is now at an eye-watering 428,000. In April, immediately before the Herald started charging, the gap was 132,000.
The big lead and high overall audience for Stuff will be more attractive to advertisers, particularly as the separate measure of 'page views' per reader is well in Stuff's favour as well. NZME will be balancing the new revenue from the paywall subscriptions against likely softer advertising revenues on its site.
The two companies' next financial results will be made public over the coming week. Nine Entertainment reports Thursday in Sydney and NZME next Tuesday. NZME's share price is still stalled around 54 cents on the NZX, having floated originally at 86 cents three years ago.
The StuffMe 2 possibility emerges at a time of a concerted campaign by TV Three owner MediaWorks for the Government to address the crisis in the television industry with some form of state financial support for media. MediaWorks is using the Government's decision to allow TVNZ not to pay it a dividend as catalyst for its campaign, arguing that has created an unfair playing field when media is already facing declining revenues and competition from digital global giants like Google and Facebook.
Ardern would not be drawn on the MediaWorks' campaign yesterday. Asked about the decision to let TVNZ keep its dividend and the subsequent public anger from its rival, Ardern said: “Again, of course different broadcasters of course [have] different mandates and the mandate for state television of course is different.
“They do play a role in making sure that New Zealand stories are told and so that of course means that they have different expectations placed upon them as TVNZ - well they have in the past anyway.”
Broadcasting and Communications Minister Kris Faafoi has met editors from the major news businesses in Auckland and heard the cries for state help, committing to working with his officials in coming months on the possibilities for publicly funded media.