European governments finance innovation in the media, not obedience

European governments finance innovation in the media, not obedience

European governments finance innovation in the media, not obedience

Media policy analysis in nine European countries focused on the involvement of governments in the media and organizations that oversee the rules and the application of laws.

Already starting at the end of the last century, the transformation of the media landscape in Europe has accelerated in the past decade. New technologies, new competitors and (as a result?) new media behavior have disrupted the old order and changed the rules of the game.

Politics has, in general, been slow to react. Governments are – as they should – reluctant to interfere in media matters. But on the other hand, we have seen flourishing media ecosystems in European countries diminish. Maybe even to reach a point where independent reporting is no longer significant as a part of a democratic system. Journalism has to re-invent itself to fulfil its role as a watchdog of institutions and organizations. The question is if, and how, governments will come to the rescue.

In an attempt to find examples of best practices in the area of transparency of media financing, transparency of processes, purposes and criteria of public funding, it made it clear that the way European governments support media is far from transparent. Of course, governments work by budgets that are made public, but in many countries it would take quite an effort to find out exactly how much money is used to – in one way or the other – subsidize media. For example, sometimes support can be “hidden” in measures like agreements with national postal services.

The analysis of some of the best examples of ensuring independence of decision-making in state policies and practices of media financing, the evolution of media markets and developments in the field of journalistic innovation and media policies in nine European countries has shown that various instruments are used to promote media innovation. These differences can be explained by the political, cultural and socioeconomic histories and structures of these countries. It is clear that there are no one-size-fits-all solutions. The research shows that governments in all of these countries (Belgium, Finland, Germany, Italy, Portugal, Spain, Switzerland, the Netherlands and Great Britain) are struggling with the dilemma whether or not to interfere in matters regarding journalism. Governments fear to endanger journalistic independence.

When it comes to innovation policy, in most cases we see a mix of judicial, financial-economic and “soft” instruments (like encouraging the sharing of knowledge between media companies). There are examples of direct support (subsidies and loans) but also indirect measures like tax advantages. For decades governments have felt (financially) responsible for public broadcasting systems; in sparsely populated countries governments helped to give people access to newspapers. But developing a policy aimed at media innovation is relatively new. Its effects are still to be examined. What the countries have in common is that the media landscape has changed dramatically. Broadcasters and newspapers face the same problems; traditional journalistic organizations are no longer – or are much less – dominant.

As a result, it is difficult to establish the effectiveness of government involvement in rapidly changing markets. Most governments face the same dilemmas: Should we support traditional companies that are clearly not sustainable; should we support new companies that may have little social impact? Privacy issues seem more important than ever, and should governments get involved in “the battle against Facebook and Google”?

Financing innovation

Relations between governments and media are, as the analysis has shown, complex. In a mature democracy, the government should foster well informed, independent media, although that is not always in their best interest since media have a tendency to be critical of governments and government institutions.

Nevertheless, many governments feel the pressure to support media. Ever since radio and television exist, many governments do this by financing public broadcasting. They should, of course, guarantee and safeguard the independence of public broadcasting. The question is what the level of control over these public media is.

Apart from that, many European countries have a history of supporting both public and private media from a standpoint of maintaining diversity of media. This can vary from a lump sum contribution to all newspapers in a country that is scarcely populated that it is expensive to deliver the newspaper (Norway) or to help journalism to re-invent itself, like the Netherlands.

It goes without saying that these times ask for non-conventional measures. Media face new unprecedented challenges. Mass media no longer accommodate advertisers, the willingness to pay for news is vanishing, most traditional media have a hard time keeping up with new technology. Apart from that, big US platforms like Facebook and Google seem to dominate media. They decide which customer gets to see what and take around 85 percent of the online commercial income

Traditional media should reinvent themselves, but they do not have the means to do that. New media should be able to experiment, to fail, to expand, so they need seed money, the right environment. Here is where politics comes in. One could argue that the problems media face are a result of a disturbance in the market that should be solved by the market itself. One could also claim an active policy by the government is needed to give media a fighting chance to survive and find a new ecosystem for news and information that is independent and reliable.

Most governments support a system for public broadcasting. It is fascinating to see how different governments have very different approaches when it comes to supporting media in their search for new audiences, new techniques, new business models. Governments can abstain from any form of support, they can have a real policy or they can be supportive without much focus. Those governments that support media, with or without a vision or strategy, can be generous or spend just enough money to pretend to have given it a lot of thought.

Flanders (the northern part of Belgium) has its own government and its own media policy. But, quite frankly, “policy” seems to be too kind a word. On the bright side one could say that the government is very generous. The government made a special deal with the newspaper publishers about distribution. They resist ruling from Brussels (Europe) by maintaining btw (VAT) on online-productions at the low rate of 6 percent. Apart from that, there is little money for innovation and unexplainable amounts of money (recently more than €900,000) was given to one of the biggest publishers (Mediahuis) for “support”. This while Mediahuis makes a very healthy profit.

In Denmark, the government has a different approach. Copenhagen very generously supports all journalistic initiatives on a commercial basis, as long as these initiatives are aimed at a big audience. All these initiatives can apply for a financial contribution. The level of the contribution is defined by the size of the organization (the bigger, the more money). Here, one might say that the Danish government avoids every discussion by simply making subsidies available for everyone. The question is, if this policy will encourage journalists to start something new. In a worst case scenario old school media simply get more time before their inevitable downfall.

Although there is always room for criticism, the Dutch approach seems to have some advantages. For the past seven years there was (relatively) little money available (less than €3 million per year) for innovation and “special journalistic projects”. But this money seems to be well spend and has helped to create an environment where the mind-set has changed, start-ups get a fair chance to grow and the “wind of change” reaches both legacy media as well as new entrepreneurs.

A detailed overview of media policies in nine European countries is available in the Bosnian language here and in English here.