Papers warn of aggressive cuts

Fairfax New Zealand and NZME have painted a stark picture of declining newspaper circulation as they plead with the country’s competition watchdog to be allowed to pool their forces and buy time to come up with new business models for their journalism.

NZME chief executive Michael Boggs said the circulation of The New Zealand Herald and its five regional dailies had fallen by an average of 8 per cent over the last year. Fairfax NZ chief operating officer Andrew Boyle said the annual decline in all but two of its daily papers had been in the double digits.

Fairfax NZ executive editor Sinead Boucher said the average print newspaper subscriber was ‘‘well into their 60s’’.

‘‘As advertising has moved out of print into digital, so the number of pages of the newspapers have had to shrink, so the perceived value for the reader in the overall product is diminished in their eyes,’’ she said.

But Grant McKenzie, chief executive of Allied Press, which publishes The Otago Daily Times, suggested Fairfax and NZME had brought some problems on themselves through their ‘‘digital first’’ policies, saying Allied Press had managed to keep its latest circulation decline down to 2.8 per cent by concentrating on its print products.

‘‘Why wouldn’t it decline when you put everything online for free?’’

The Commerce Commission is grilling media firms about the implications of Fairfax NZ and NZME’s proposed merger at a conference in Wellington.

It indicated in a draft ruling in November that it was likely to reject the merger because of fears it would reduce media diversity.

Fairfax and NZME have warned that they will have to make ‘‘aggressive’’ cuts to their reporting if the merger does not go ahead, which they have argued would have a greater impact on the amount and variety of news provided to Kiwis.

The sessions at the conference where the companies are expected to set out details of those deeper cuts will be held behind closed doors, but Fairfax NZ managing director Simon Tong revealed it had modelled two or three scenarios and they were ‘‘not a fabulous picture’’.

Commissioner Sue Begg said at the conference that another of the commission’s concerns was ‘‘quality’’.

But Boggs forecast investigative reporting would benefit if the merger was allowed. NZME was halfway towards ensuring a quarter of its news reports were ‘‘unique’’, and allowing the merger would help it hit its target, he said.

Boggs hinted at a possible new development, saying he expected some discussion at the conference in the next day or two of ‘‘behavioural undertakings’’ that the merged firm might enter into.

The Coalition for Better Broadcasting – which opposes the merger – has said some but not all of its concerns might be addressed if NZME placed a cap on the number of shares in the merged firm that any individual could directly or indirectly control.