APN ditches southern papers

Australian media company APN lost another couple of cents to 39c a share on news it is selling its South Island newspaper interests.

APN News & Media is probably best known among the reading public for its publication of the Auckland-based daily New Zealand Herald.

The shares in APN have been declining for months and the company has warned of a write down in its masthead value.

Competition from online media partly explains the move as print publications lose advertising and readers to the internet.

But the earthquakes may also have played a significant role as far as the South Island newspapers are concerned.

The Star in Christchurch lost its printing capacity and external customers after the earthquakes.

The Star has a long and proud history, frequently outshining the morning daily, The Press, until the late 1980s, when the rapidly shrinking evening edition was finally put to bed.

Television news and changing reader habits saw its demise, along with newspapers like The Evening Post in Wellington.

Leading reporters who now occupy senior roles in other news outlets saw the writing on the wall and left in big numbers around 1990.

From a staff of more than 500 there were about 100 remaining by 1991 after three years of restructuring.

The Star became a bi-weekly sad shadow of its former self under caretaker managing editors with sketchy backgrounds in community newspapers. It became a loss-making spoiler, retaining a smaller percentage of Christchurch’s advertising spend.

In recent years the quality of journalism has risen but it remains at a disadvantage to the daily The Press in terms of topical coverage. On the other hand, as a free publication, its readership penetration is high.

The APN annual report does not break down segment results sufficiently to determine if The Star has achieved profitability, although local managers have told its reporters that it is profitable.

Reporters at The Star are nervous about their futures. It seems likely a new buyer, if one is found, would make significant changes.

The publications being offered for sale are The Star, the Oamaru Mail and the Capital Community Newspaper group in Wellington.

The Star also publishes six free suburban titles: The Pegasus Post, Observer, News Advertiser, Western News, North Canterbury News and Selwyn Times.

The Wellington group of community newspapers includes the Independent Herald, established in 1972, along with Cook Strait News, Porirua News and Wainuiomata News, all founded in the 1990s.

APN will retain its 50% ownership of The Radio Network, APN Outdoor, and the free Kapiti News community newspaper.

In a prepared statement, APN New Zealand Media chief executive Martin Simons says while the company has enjoyed a long association with the South Island, it sees more expansion opportunities in the North Island which will drive population growth over the next decade.


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7 Comments & Questions

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Sad to see. Its a tough business which can only survive through great content (or it hits the bin) and looking after its advertisers.
This could see the march of Allied Press northwards. Now that would be a good thing as any publisher, including Fairfax, will produce a better product when faced by a competitor.

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Allied Press? Spend money? That's crazy talk.

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Declining newspapers - what do they expect when they just keep on doing "same ole same ole".
No business, whatever industry they are in, can expect to survive just because they have some longevity of years.

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Herald's success formula.........
Dumb down the content, assume all readers are idiots and then change to a tabloid format. The website is also cr*p, but no doubt they will win the Quainta*se Newspaper of the Year.

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In fairness, most of their readers are idiots. Hardly their fault.

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The Christchurch Star is unusual among free newspapers in that it is distributed across all of Christchurch and to neighbouring small towns like Rangiora. It is also unusual in that it publishes some national news from the NZH and supplies the NZH with South Island coverage. Presumably there has been enough advertising to justify the relatively high editorial investment and wide circulation area. In contrast, Fairfax's Auckland papers just publish local news and there are different papers for different suburbs.
If it has survived this far I'd have thought the Star would have better prospects than some of APN's other titles. The Star was once the stronger newspaper in terms of readership in Crch. If they'd switched to morning publication when the paper was strong they might still be around as a paid daily title and Christchurch might still have two daily papers.

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Although Allied is undoubtedly tight with its money (I've done some work for them) the quantity of editorial content and the number of journalists they employ on the Otago Daily Times is impressive. Indeed, Allied believes producing a strong newspaper increases readership and long-term profitability. They might be more focussed on building the asset than APN has. I suppose they might switch the Friday edition to Saturday morning to create a more up to date paper that more people might read. Since newspaper competition focuses quality, it would be unfortunate if Fairfax gained control.

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