Economist claims TVNZ should be allowed to buy Stuff

News 11/04/2019

The Commerce Commission is being urged to rethink its "out-of-date" thinking on media monopolies.

There is speculation TVNZ is interested in snapping up Stuff, the sixth-most popular website in New Zealand and biggest news site.

Australian broadcaster Nine acquired Stuff last year when it purchased parent company Fairfax Media. It took only days for chief executive Hugh Marks to put Stuff up for sale.

TVNZ chief executive Kevin Kenrick has refused to confirm or deny the rumours the Government-owned broadcaster is interested.

But if he is, the Commerce Commission could stand in the way. A two-year attempt by Stuff and media company NZME to merge was first blocked by the Commerce Commission and then the courts.

Economist Shamubeel Eaqub explained his views when it comes to media companies.

Current rules and regulations around competition are so out-of-date.

"The Commerce Commission will come out and say, 'You can't buy each other because actually, that will reduce the plurality of media,'" he told The AM Show on Thursday.

"If you look at the media landscape it's in fact now global, and because of the internet and social media, it's very difficult to argue who is a media company. The competition doesn't necessarily come from an organisation based down the road - the competition is everywhere."

Social media company Facebook and search giant Google have scooped up an increasing share of the advertising dollar that used to go to traditional media companies, forcing mergers and takeovers across the industry.

The economics of media no longer works. It's a race to the bottom.

"... the pie is getting smaller, and you can't divvy it up across lots of people," said Eaqub.

"MediaWorks went through this over the last couple of decades - the successive sales have seen big changes come through. The bigger question for me is, we know the economics doesn't work - what are the solutions?"

A merger of two private behemoths like Stuff and NZME would only delay the inevitable for both companies, he says, while a taxpayer-funded TVNZ takeover of Stuff makes more sense.

"The media serves a really important function in our democracy, in the way the public are informed. If we have a really weak media and no plurality of views, then we're going to find it really hard…

We need the Government to do this stuff

"because in reality there's nobody else who will pay for the public interest stuff."

Broadcasting Minister Kris Faafoi declined to comment on the possible Stuff deal with TVNZ, saying it would be inappropriate.

The AM Show / Newshub reporter Dan Satherley