Crisis Media Support: Who’s In And Who’s Out

Michael Hedges May 7, 2020 - Follow on Twitter

Recession is upon us, it has been concluded almost universally. Most economic sectors are being battered as unemployment rises and consumer sentiment takes a sharp downturn, discretionary spending functionally ending. This has sent retail ad spending careening which, in turn, has rattled an already fragile traditional media sector.

Governments have stepped in, largely to augment support, however temporary, for the ranks of the unemployed. The financial sector, of course, is getting everything they want and sometimes more. It is the 2008/2009 playbook. But the conditions of this economic downturn is unique; work force and consumer activity curtailed by the pervasive public health issues.

Every consumer-facing activity is affected. This includes the media sector, writ broadly. While lockdowns have boosted media usage, certainly TV and streaming video, the traditional revenue stream, advertising, has dropped between 60% to 80% since March. Publishers and broadcasters are standing in line with airlines, automakers and retailers of all sort for financial support.

In many countries media support has been available to publishers for years. Small things like tax breaks and postal subsidies add up. Where national public broadcasting has been supported by a household license fee or similar mechanisms portions have been shared with local and regional privately-owned or non-commercial broadcasting. Lobbying by publisher and broadcaster trade groups has been steady and effective. Professional associations have also become adept at public relations.

Understandably, governments are expected to, well, do something. This is no simple task with so many hands waving in the air. It’s a tough job but somebody’s got to do it. Legislators, then, are setting priorities. Publishing and broadcasting are on the list, just not close to the top. News media, essential for reliable pandemic information, has the attention of all politicians, for all the obvious reasons.

The Austrian parliament passed a special appropriation in early for media sector relief, about €30 million. Media is the only Austrian business sector to receive special funding, the fall in ad spending cited. Daily newspapers were allotted a bit more than €12 million, weekly publications a bit less than €3 million. Privately-owned commercial broadcasters would get €15 million, non-commercial broadcasters another €2 million. Online media were left out.

Austrian media watchers were aghast when support allocations for specific outlets became known. Overall, tabloid newspapers cashed in; primary broadsheets, particularly those critical of the OVP government, not so much if at all. Amounts disbursed appear to have been calculated with a complicated algorithm based on circulation and distribution costs. Leading tabloid Kronen Zeitung received €2.7 million while the more authoritative Der Standard and Die Presse got a half million euros each.

Several vectors of criticism emerged from the media support allocations. “We demand that newspapers, which have to convince their paying readers anew every day, are treated differently than free media, which according to the current model would get the largest piece of the cake,” said journalist’s union GPA-djp chairperson Eike-Clemens Kullmann in a statement (April 3). "Daily and weekly newspapers are subject to collective agreements and therefore have significantly higher personnel costs than companies for which there is no lower limit." Allocating more to free-sheets, largely tabloids, is “a massive distortion of competition.”

"It is not circulation numbers or ratings that are decisive for media funding, but the content quality of the media," said Reporters sans Frontieres (RSF) Austria director Rubina Möhring in a statement. “Could it not be that the government prefers the noisiest, commercial, low-quality and low-content, because they supposedly have higher reach than high-quality, labor-intensive, content-rich and critical media,” noted a statement from independent non-commercial radio channel Orange 94.0.

"Without information and education from the media, it would have been unthinkable that the population would support the measures in this way,” said Chancellory Office media officer Gerald Fleischmann, quoted by Der Standard (April 23). “They exercised their political responsibility in a very outstanding way.”

This special funding is separate from the long-standing media support mechanism that shares a portion of the household license fee for the support of public broadcaster ORF. That fund has held steady in recent years; €20 million a year for private-sector commercial broadcasters, €3 million for non-commercial broadcasters and €8.7 million for print publishers. And, too, federal and local government spending on information inserts is expected to top €200 million this year.

Also generous are the two houses of the Swiss parliament, the Council of States (upper house) and the National council (lower house). Two motions passed this week for special “crisis assistance” totalling CHF65 million, just under €62 million, largely to defray ad revenue losses. Part of the proposal would additional funding available to news agency Keystone-SDA-ATS to allow its basic service to be distributed free of charge. “Without immediate help, irreparable damage is inevitable,” said MP Stefan Engler, quoted by pubic broadcaster RSR (May 4). About half the amount would come from the Federal treasury, the rest from the public broadcasting household license fee fund.

Just hold on there, said the Swiss Federal Council (executive branch), something they do quite often. The Federal Council wants to move forward on a comprehensive measure announced last August. After all, what has changed except for the passage of time.

As more details of that proposal were offered last week by Swiss Confederation president and Media Minister Simonetta Sommaruga, the Federal Council is more interested in addressing the media sector’s long term structural issues. That, primarily, means shifting emphasis to online and digital solutions. “Troubled media,” she said, can access special tax credits set up for businesses impacted by the coronavirus pandemic and unemployment insurance.

Media support measures will be taken up when the Swiss parliament reconvenes in June.

See also...

• Hot Topics - Media in Austria