The strategy that just might save print media

Fairfax and APN are in talks to partner up on newspaper printing.

Justin Loiseau

Justin Loiseau hails from the great united state of North Carolina, where he started his first business at the ripe age of five: melting crayons into candles. With the infamous Crayola Crash of 1994, Justin moved on to study economics and environmental studies as a Morehead-Cain Scholar at the University of North Carolina. He has worked in a variety of sectors across the globe, from management consulting to the United Nations, and once spent three months examining invasive snails in Vietnam. Justin discovered The Motley Fool in 2012 and it’s been love ever since. Creativity, contrarianism, kerfuffling… what more could one want? When he’s not playing the Fool, you can find Justin at the University of Auckland, where he is pursuing a Masters in Economics as a Rotary Ambassadorial Scholar. Justin finds biogas digesters fascinating and can unicycle a mile in seven minutes.

Published October 17, 2013 3:49 pm AEDT

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.

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

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