Report calls for government support for online news providers

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by a Newsnet reporter

A report published by Oxford University’s Reuters Institute for the Study of Journalism has found that media industries in most developed democracies have undergone a period of profound change over the last fifteen years.  There is a growing crisis with many news organisations facing serious economic challenges, especially in the newspaper industry.  However forms of public sector support for the media have remained unchanged for decades.

The report ‘Supporting the past, forgetting the future?‘ compared six industrialised states, Finland, France, Germany, Italy, the US, and the UK, and looked at the policies in place in each for three forms of public sector support for the media: direct funding via a licence-fee, direct support in the form of grants or other financial support for media organisations, and indirect support in the form of tax exemptions or reductions and VAT exemptions.

The report’s authors, Dr Rasmus Kleis Nielsen with former Reuters editor-in-chief Geert Linnebank, discovered that the United Kingdom has one of the highest levels of public funding in Europe.  Using figures for all six countries from 2008, the report found the UK spent €68.20 per head of population on public service media and €12.20 on indirect press support.  

The only two countries in the survey with higher levels of spending were Finland and Germany.  In Finland €71.70 per head of population is spent annually on public service media and €58.90 per head of population is spent on indirect media support.  In Germany the figures are €88.50 and €6.40 respectively.

These figures are well ahead of the amount spent in France where only €48.60 per head is spent annually on public service media.  However the French provide slightly larger indirect support, at €12.90 per head annually.  In Italy the respective figures were €28 and €9.40.

All European nations spent considerably more on public service media than the USA, where a mere €2.60 per head of population is spent, the same figure as is spent on tax breaks and other indirect support.

The report’s author believes current arrangements discriminate against online-only news outlets, claiming that in the six countries researched “there is no substantial public support for online-only organisations”.  

Only one country, France, offered online news providers any support at all but the amount of support represented a mere 1/10,000 of the total amount given in public support for media organisation.  However the figures used in the study relate to the year 2008, when French online media organisations received €500,000, but the report notes that the following year the amount of state support to such organisations increased to €20,000,000.

The study calls for for a more open approach to government support for the media to avoid discriminating against online news.

The report believes that the time is overdue for a thoroughgoing and comprehensive review of how the media organisations are funded.  

Dr Nielsen noted: “Every passing year increases the tensions between public service media organisations and their commercial competitors online, every drop in circulation undermines the ability of VAT relief and their like to underpin private sector media companies.

“We therefore think it is time to review and renew media policy arrangements and bring them in line with the principles purportedly behind them with the times we live in.

“All the forms of support examined … are inherited from the twentieth century (or before) and heavily orientated towards supporting long-established media organisations like public service broadcasters and private paid newspapers.”