Hard News by Russell Brown

84

Who owns the news?

I was pleased recently to see that AUT’s Centre for Journalism, Media and Democracy (JMAD) had taken over publication of the News Media Ownership in New Zealand report, which was compiled by Canterbury University's Bill Rosenberg until 2008. You didn't need to share all Rosenberg's politics to find it a useful and relevant resource.

The first JMAD edition, the New Zealand Media Ownership Report, co-written by AUT lecturer and PhD researcher Merja Myllylahti and JMAD co-director, Dr Wayne Hope, has been published. It finds that three major players -- APN, Fairfax and MediaWorks -- now own more than 80% of New Zealand media. The fourth big owner is News Limited, the largest shareholder (43.65%) in Sky Television, which currently has a monopoly on pay television. All of those companies are foreign-owned.

That in itself represents no great shift since 2008, but the authors note recent changes such as the closure of NZPA after 130 years and the defunding of TVNZ 6 and 7, and a trend towards the "financialisation" of media ownership -- most notably in the case of Mediaworks and its troubled private capital owner Ironbridge. (NBR has a story on that trend and its implications.)

Another interesting trend is the post-Trade Me move by the two big newspaper groups into online service businesses. APN bought into EventFinder and GrabOne, and acquired the sports-tipping website Jimungo. Fairfax has the holiday rental and travel sites Occupancy, Stayz, Holidayhomes.co.nz and Bookit.co.nz, and took over TenderLink last year.

While the report identifies some important issues, it's not as comprehensive as Rosenberg's -- 11,000 words compared to the 60,000 in Rosenberg's final paper -- and it's hard not to be disappointed by the lack of breadth of research in places. Citations from John Drinnan's New Zealand Herald media column are presented at face value, which is sometimes not particularly useful. Example:

To date, Sky TV has been able to operate in an unregulated market environment, but as Drinnan points out, this might change. The Commerce Commission will be looking to see if Sky's dominance is likely to restrict the activities of other pay-TV providers once the ultra-fast broadband network is operational (Drinnan, 2011d).

A big reason for Sky's success is unwillingness by successive governments to examine the broadcasting market – let alone regulate it – protecting a listed company while ignoring warnings it is undermining competition. (Drinnan, 2011d).

This is wrong in multiple ways. The Commerce Commission's High Speed Broadband Services Demand-Side Study will have no power to enforce or even recommend regulation. Its findings "may lead to the publication of discussion papers for further consultation," which the government can and almost certainly will ignore.

Indeed, I was present at a recent meeting on public broadcasting policy where the Minister of Broadcasting, Jonathan Coleman, flatly stated "We will not be regulating Sky," demand-side study notwithstanding.

The problem with Sky's dominance is not that it plans to supply services via the forthcoming ultra-fast broadband network -- it would be crazy not to -- but that its lock on content and the nature of its supply contracts (especially the first right of refusal clauses, which require the other party to first seek any programming from Sky, on Sky's terms) will militate against new entrants to the market and deprive consumers of choice. In the UK, this has been addressed via a regulated wholesale market, which unbundles Sky's services and governs wholesale pricing. It seems to work.

And Drinnan is hopelessly wrong in claiming "successive governments" have been "unwilling" to examine the broadcast market. When the government took office, a major regulatory review of broadcasting, under the purview of the Ministry of Economic Development, was well underway. It was killed within six months by Steven Joyce.

The absence from the JMAD report of that review is puzzling to say the least. Meanwhile, Rachel Glucina gets a citation.

Ironically, given the generous citing of the Herald in the report, the Herald has not covered it. Neither have any Fairfax papers, or TVNZ. Myllylahti hinted at an agenda in this comment on Clare Curran's blog.

Whether it was a matter of agenda or simple editorial discretion, the ownership and financial structure of the two big newspaper owners is worth discussing. Cash that could have been reserved or invested was remitted to Australia during the good times and now both chains have suffered substantial write-downs in their asset values. Through good times and bad, it has been editorial resources that get squeezed.

Anyway, I'd appreciate any commentary you may care to offer. Merja Myllylahti will be joining me on Media7 this week, along with former MediaWorks CEO Brent Impey, whose word-in-your-ear to the Prime Minister is said to have laid the ground for the government's controversial $43 million loan to cover the company's spectrum licensing fees.

If you'd like to join us for tomorrow evening's recording, come to the Victoria Street entrance of TVNZ from 5.15pm and before 5.40pm. As ever, try and drop me an email to let me know you're coming.

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