ComCom to weigh up digital-print divide in NZME, Fairfax merger bid

A great deal of advertising has moved online, and not just to the newspapers' websites. Photo / Jason Oxenham

The Commerce Commission will look at whether there are separate digital and print media markets as part of its assessment of the proposed marriage of the country's two biggest newspaper publishers, Fairfax Media's New Zealand operations and APN News & Media's NZME division.

The antitrust regulator today released its statement of preliminary issues outlining what it plans to look at in approving the deal, with a view to reaching a conclusion by August 22, though it acknowledged that timeframe may get pushed out.

Among those is whether there are separate product markets for the supply of online and print advertising and content, and whether there's a material overlap in online advertising and the supply of news and entertainment via Fairfax's stuff.co.nz and NZME's nzherald.co.nz websites.

"There has been movement among a number of media companies both internationally and within New Zealand towards the introduction of charges for readers to access online content, known as a paywall," the regulator said. "We will assess whether or not the merged entity would have the ability and incentive to introduce such a paywall and whether or not this would encourage other content providers to follow suit."

The two media companies pushed the idea that they can't compete in the online ad space against the likes of Google and Facebook without combining their resources, and that audiences and advertisers are agnostic as to the platform they use to get information. Both companies have adopted a 'digital first' strategy prioritising online editorial and advertising over their traditional print businesses.

How to make a submission

The Commerce Commission asks submitters to clearly identify any confidential information within their submissions and to provide both a confidential and a public version.

The commission will publish the public versions of all submissions on its website.

It notes that all information it receives is subject to the Official Information Act 1982 (OIA), under which there is a principle of availability.

Where to find the NZME-Fairfax NZ merger application
The public version of the application is available here.

Further details on the Commission's authorisation process
Further details on the Commission's authorisation process can be found here.

"We will examine the extent to which both advertisers and readers view different media as substitutes," the regulator said. "As part of this assessment on the reader side, we will consider the extent to which content is created with a specific platform (print, digital or radio) in mind."

The regulator will look at whether there are separate 'content' markets, defined by subject matter or news focus, and will assess "the extent to which advertisers have a preference for specific media for specific needs", such as using Google or Facebook ads over stuff.co.nz or the nzherald.co.nz. It will also assess whether Fairfax and NZME are competing with the likes of Facebook and Google, and if that rivalry would constrain a merged entity's ability to raise prices.

The commission will examine how much competition Television New Zealand and MediaWorks' websites offer readers, and also what comparable content is provided by international media groups.

Other areas of overlap the commission singled out were Fairfax's Sunday Star Times and Sunday News and NZME's Herald on Sunday, Fairfax's Dominion Post and NZME's Hawke's Bay Today, NZME's flagship NZ Herald and Fairfax's Waikato Times, and free community publications.

The regulator also said it would look at the impact of the merged entity's increased stake in online ad exchange KPEX, which is also owned by MediaWorks and TVNZ, and whether the combined group would still grant independent publishers access to its printing services.

The competition watchdog has invited the public to make submissions on the proposed NZME-Faifax NZ merger.

Submission must be received by July 1.

The Commerce Commission expects to make a decision by August 22 - but it indicates this deadline may be extended.

Read the full Commerce Commission document here: