ISP tie-ups on horizon: Faafoi
News reporting could come bundled with your broadband connection, newly appointed Broadcasting Minister Kris Faafoi believes.
Faafoi understood media companies were considering shoring up their businesses by teaming up with internet service providers (ISPs), as they look for a plan B in the wake of the block put on the merger of publishers NZME and Stuff Ltd by the Commerce Commission and the courts.
‘‘That is my reading of the tea leaves . . . I think you will start seeing a lot more talk of ‘dance partners’ starting to get together and thinking about what the future for them is,’’ he said.
Stuff chief executive Sinead Boucher said she was not aware of such partnerships being discussed, noting Stuff already owned its own ISP in Stuff Fibre.
Spark spokesman Andrew Pirie said it had ‘‘no active engagements’’ concerning any significant partnerships with media companies. ‘‘But certainly this is an evolving space.’’
Faafoi said that if ISPs and media firms did join forces, that could mean consumers having to pay for content that had previously been free, such as free-to-air television.
It was not clear whether the Commerce Commission would need to get involved in any tie-ups between media firms and ISPs, he said, describing that as a ‘‘moot point’’. But he did not rule out the Government involving itself in a media-sector restructure.
‘‘The bottom line’’ for traditional media firms was becoming extremely difficult, with ‘‘declining revenues across the board’’, he said.
That was a concern for the Government, which was open to listening to arguments from the big media firms about what could be done, he said.
MediaWorks, NZME and Stuff may only be worth about a tenth of the value they had in the early 2000s, according to one analyst who estimated their combined worth at between $300 million and $400m.
That would put their combined value in the same range as retailer Hallenstein Glasson Holdings, which is worth $319m on the NZX.
The assessment is based on NZME’s $125m market value, the terms of its blocked merger with Stuff, and the analyst’s assumption that lossmaking MediaWorks’ radio business was probably worth about as much as NZME’s radio business.
The valuation would mean the combined worth of the big three media firms had fallen by about 90 per cent since the early 2000s, when a series of transactions between 2001 and 2007 put their combined market value at about $3.4 billion.
Faafoi said he had met with the chief executives of most of the major media companies since he took over the broadcasting portfolio from former minister Clare Curran last month, and had been told by them that something had to change structurally to make them more viable.
He wanted to see a ‘‘healthy flourishing media market’’ and that included a healthy private sector media, he said.
‘‘I think you will start seeing a lot more talk of ‘dance partners’ starting to get together.’’ Broadcasting Minister Kris Faafoi