The strategy that just might save print media

For today, at least, the news is news. Fairfax Media (ASX: FXJ) and APN News and Media (ASX: APN) are considering a joint venture to capture economies of scale and cut costly New Zealand printing expenditures.

The Australian Financial Review reported today that the two companies, which outweigh all other competitors in New Zealand newspapers, are in preliminary talks to partner up their printing presses.

APN Chief Executive Brett Chenoweth told The Australian: “The industry is changing. In a digital world it makes sense for media companies to look at infrastructure-light business models. We need to focus on content, editorial, sales and marketing through a range of different platforms. ”

While APN is best known in Kiwi land for The New Zealand Herald, the company also pushes out seven regional daily newspapers and  over 40 local papers. Fairfax churns out nine dailies and more than 60 community papers in the country.

Although the two companies are chatting, The Australian Financial Review reports that the businesses have different ideas of where the collaboration could end up. While APN is most interested in a merger or asset-sharing agreement for printing in New Zealand, Fairfax seems more keen to expand the idea to regional Australia.

Foolish takeaway

Fairfax and APN shares have fallen 24% and 31%, respectively, over the past year. As Chenoweth has stated, the media industry is undergoing massive changes, and everyone needs to adapt. Partnerships such as this would’ve been unthinkable during the heyday of daily newspapers, but smart companies are adopting clever tactics to stay afloat.

According to the Business Spectator, APN has also been considering joint venture ideas with News Corp Australia (ASX: NWS). A printing arrangement between The Daily Telegraph and The Times in Great Britain provides precedent for a possible partnership.

It’s too early for investors to know what will come of these talks, but we can at least acknowledge that it’s not too late for strategic positioning to keep these companies pulling profits.

While media companies are innovating just to survive, other corporations are innovating to pull more profit than ever before. Get “3 Stocks for the Great Dividend Boom” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading

Motley Fool contributor Justin Loiseau has no position in any stocks mentioned in this article. You can follow him on Twitter @TMFJLo.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.