Can we solve the problem of Kiwi Media Bias for $1?
I wrote an "opinion column" with the above title for the National Business Review which they published yesterday. It is reproduced below, if you aren't an NBR subscriber:
There once was a time when the owners of big newspapers were amongst the wealthiest, most powerful, folks in town. They could swing elections. Give you a good name. Or a bad name. Australia had the Packers, Fairfaxes and Murdochs. In Auckland we had the Hortons at the Herald. A swathe of politicians went out of their way to be nice to these folks. Since so many votes depended on the opinions expressed in their papers.
We’ve all heard what happened next. The Internet was invented and destroyed the newspapers. Now people don’t read them much anymore. Social media rules. The owners lost influence.
Except that part of the story isn’t true.
Newspaper circulation has been slowly & steadily declining around the world for the past 60 years. The internet has had no bigger impact on their distribution numbers than inventions like wireless radio, broadcast television and cable TV.
What the internet did do was collapse their profits, but it had little impact on the readership of their news content. But how? The web wiped out the revenues the papers got from their classified advertisements. Between 1994 and 2010 the average annual decline in the New York Times readership was only ½% per year. But over that period it lost 90% of classified revenues. In this country, as well as overseas, those ads went to online platforms like Trade Me. The explanation for such a phenomenon isn’t obvious. Why haven’t people dropped reading the old names in news, just like they dropped them for their classifieds?
What seems to be happening is that people still choose to read news and opinion from sources they know and trust. Although others read Stuff, doesn’t mean you would want to. You may not appreciate its bias. You may feel other outlets offer a better product. So you base your decision on your own assessment of product quality and price. Why else would the NBR run the by-line “The Authority Since 1970” on its front page? Probably because it has been a well-regarded source of news for a long time and wants to keep its brand associated with a quality product that attracts a significant readership base.
By contrast, when it comes to exchanging goods and services, to buying and selling, the main thing that counts to people is being part of a big market, the bigger the better, where loads of other people list their products and also trade. Which is what a service like Trade Me offers. That is, whilst the newspapers lost nearly all of their classifieds to online platforms that were geared up to process large numbers of deals with large numbers of traders, the extent to which we still value the “old names” in the news business has remained largely intact.
This argument isn’t original to me. It was made by an acquaintance of mine who writes case studies on the media industry and used to invite Rupert Murdoch along as a guest speaker to his class. Assuming it’s correct, it raises a quite remarkable question to maybe a majority of NBR readers. If you’ve ever been upset by media bias in this country and would like to change that state of affairs, why don’t you simply buy a major news outlet? Since they’re going cheap.
Not long ago, to buy a paper with a readership like the Herald’s, whose brand is viewed by over 2 million Kiwis a week, according to the latest Nielson Poll reported in March 2021, may have cost you up to a couple of billion dollars. How do we know? Since that’s what Trade Me, which took nearly all its classified advertising business, was valued at when bought by Apex Partners. Due to the loss of such revenues, the Herald is now worth a small sum by comparison. Another case in point is Stuff, which was sold last year by Nine Entertainment to chief executive Sinead Boucher for $1 (plus its on-going liabilities, which sat at $73.9 million in June 2019). Yet it’s viewed by between one and two million Kiwis a week.
So, if you care about these kinds of matters, why didn’t you pick up Stuff for that price and immediately install your favorite NBR writer as editor to reverse our media bias problem overnight? What’s more, you would have become owner of a powerful media vehicle, following in the footsteps of past media barons. With an ability to influence a massive proportion of people in our country. To swing elections. A society big-wig. And you wouldn’t ever have to ask to talk to your Member of Parliament again. They would ask politely to talk to you.
Of course, the reason so few Kiwi business owners have been showing much interest in snapping up a well-regarded, widely-read name in our newspaper industry is probably due to concerns about their profitability. Though if your aim is to achieve better social outcomes by influencing beliefs, to respect the truth in public debates and to educate people, then it could be your best investment ever. Way more impactful than a Charitable Foundation. And just for one dollar.