Tuesday, February 23, 2010

European Media Subsidies

by Caroline Waters

Paul Murschetz: State Support for the Daily Press in Europe: A Critical Appraisal: This article warns that there needs to be a change in the current method of providing subsidies in Austria, France, Norway, and Sweden to newspapers when the market conditions are becoming more commercial. Murschetz begins his argument by describing these countries’ choice for more interventionist public policies into press economics (292).

Murschetz then analyzes the two types of subsidies: direct and indirect. Subsides are “cash injections accordance with selection criteria of size measured by circulation, competitive position in defined markets, frequency of publication or disadvantaged financial position on the advertising market” (294). The governments in Norway, Sweden, Austria, and France provide direct selective subsidies to secondary dailies “helping second position newspapers improve their market position, thus reducing the risk of local monopolies” (294). Austria introduced a general subsidy. In other words, it would operate across all newspapers (295). Although direct cash subsidies are provided for national daily newspapers with low advertising, in France, indirect help is more common (295). Forms of direct financial subsidies include “support for cooperation in distribution and printing, government loans on preferential terms and government insertions…grants for press research and education, and grants for press exports” (296). Governments in Norway and Austria “give financial support for training of journalists and research on the press” (297).

On the other hand, indirect subsidies include “tax concessions and discounts on various types of tariffs” and most importantly “telecommunications support to newspapers” (297). Telephone charges and news services subscription fees can be reduced (297). Additionally, the government can lower import duties or advertise in the daily press (298). Austria and France offer tariff reductions for newspapers delivered by national post offices (299).

Next, Murschetz describes the problem newspapers face with a changing, more commercial market. Publishers have to change their selling tactics by taking more cost-cutting measures, “revitalizing circulation through relaunch,” or they are “forced to sell to larger groups” (300). One common trend is for publishers to try and make their newspapers international. However, this can be deemed “unfettered competition” and can make selling newspapers internationally difficult (301). With the decline in advertising and newspaper sales in general, it is difficult for smaller, secondary newspapers to stay in business. Hence, they rely on subsidies as a more stable source of income (302).

Murschetz then discusses the politics of subsidy by breaking it down into two concepts: general subsidies and selective subsidies. General subsidies, like those mentioned about Austria, “go to all newspapers irrespective of their individual needs.” On the other hand, selective subsidies are “made to specific papers to help cover their costs” (303). This can be tricky for governments to choose while still seeming to be impartial to the public. In order to solve this problem, the Nordic choose based on economic criteria (303). The French system does not do this, and has actually “created anomalies, with an inherent bias favoring the already economically better-off newspapers, so harming competition and diversity” (304). The next point Murschetz addresses is the desire to secure a “diverse press landscape” (304). All of the countries discussed rely on government subsidies to achieve press diversity.

Finally, Murschetz establishes the problems of economic concentration and homogenization of editorial viewpoints are manifested through “declining circulation and readership, closures of small newspapers and single ownership of markets” (305). Murschetz thinks that the reason for this is that “too little commercial information on the daily press is available” (305). One possible solution calls for “professional, cost-efficient management, a skilled staff and a much lower salary level for journalists” (306). Murschetz concludes with his own idea that it would be more effective for subsidies to be awarded after operating is calculated instead of beforehand (307).

About the Author: Paul Murschetz is head of the Media Management Department at the Cologne Business School. At the time this article was written, Murschetz was “affiliated to the Departmnet of Language and Media at Glasgow Caledonian University” (291). This article was published in 1998.

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