Managed Decline versus Sustainable Structure: What’s the Best Path Forward?

When Stuff announced its merger with Trade Me last week, it marked a significant moment for New Zealand’s news landscape. The journey began back in 2006 when New Zealand’s biggest publisher bought the online marketplace for over $700 million. At the time, it was known as Fairfax Media NZ, a part of the larger Australian media company that had acquired several newspapers in New Zealand.

Over the years, Trade Me was sold off to address financial challenges, eventually leading to a merger between Fairfax Media and the TV broadcaster Nine Network, creating a powerhouse in the news industry. This move saw the birth of an Australasian news giant but also marked the end of the Fairfax name.

Following the merger, Greg Hywood, the chief executive at the time, emphasized the importance of the amalgamation for various stakeholders. However, the New Zealand arm of the business was not a key focus. In a surprising turn of events, Nine Entertainment sold off its New Zealand division to Sinead Boucher for a mere $1, paving the way for Boucher to become the sole owner of Stuff. Recently, she announced the sale of half of Stuff’s digital business back to Trade Me, bringing things full circle.

Despite the changes, Hywood’s tenure in New Zealand saw the organization perform well and maintain a strong editorial and business standing. Hywood expressed his surprise at the decision to sell the New Zealand business for a dollar, noting that he believed it was in better shape than the regional business in Australia. Looking back, the failed merger between Fairfax Media NZ and APN, NZME’s predecessor, was seen as a missed opportunity to create a stronger counterbalance to tech giants like Google and Facebook.

Reflecting on the decline of traditional media revenue streams, Hywood explained how the company’s heavy investment in newspapers forced them to offload TradeMe to reduce debt. The era of classified ads for jobs, homes, and cars, once the ‘rivers of gold’ for newspapers, was coming to an end. While the industry underwent significant structural changes, Hywood highlighted the need for scale and diversification to compete effectively and invest in quality journalism.

In navigating the challenges of the evolving media landscape, Hywood acknowledged the tough decisions that were made to ensure the sustainability of the business. Despite being known for significant layoffs during his time at Fairfax, Hywood emphasized the importance of preserving the core values of journalism while adapting to new realities.

As the media landscape continues to transform, the lessons learned from past experiences will shape the future of news organizations like Stuff and its counterparts, emphasizing the importance of innovation, adaptation, and a commitment to quality journalism.