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Citation for the original published chapter: Ots, M., Picard, R G. (2018)
Press subsidies
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Ots, M., & Picard, R. G. (2018). Press Subsidies. In J. F. Nussbaum (Ed.), Oxford Research Encyclopedia of Communication Oxford: Oxford University Press. DOI:
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Press Subsidies
Mart Ots & Robert G. Picard
Due to its function as a watchdog or fourth estate in democratic societies and a variety of commercial challenges, policy-makers have undertaken initiatives to support the production and distribution of news. Press subsidies are one such policy initiative that particularly aims to provide support to private news producers. Paid as direct cash handouts or indirect reduced taxes and fees, they exist in some form in almost every country in the world. Subsidies are not
uncontroversial, their effectiveness is unclear, and their magnitude, designs, and areas of application, differ across nations and their unique economic, cultural, and political contexts. After periods of declining political and public interest in media subsidies, the recent economic crisis of journalism, and the rising influence of various forms of click-bait, fake, native, or biased news on social media platforms, has brought state support of original journalism back on the agenda.
Keywords
public policy, state intervention, press support, news aid, media policy, journalism studies
Press Subsidies and Other Forms of State Support to Journalism
Subsidies are government expenditures and measures to improve the financial condition of private firms as a means of pursuing a public objective. Press subsidies are specifically designed to support operations of newspapers and news organizations.
Press subsidies have existed in some form in nearly every country of the world since private operation of presses. Historically, funds were often distributed to papers friendly to the
government in power, or in ways that ensured reporting positive to the interests of government (e.g., Curran & Seaton, 2009). Colonial governments in Africa and Asia regularly subsidized papers for information exchange among colonial immigrants (see world history). Among the earliest and most common support for newspapers were postal rate reductions for newspaper distribution and it has traditionally existed in nearly every democratic nation (John, 1995; Kielbowicz, 1989, 1990; Picard, 1985b).
The modern democratic concept of subsidies developed after a wave of newspaper death in the 1960s, that was particularly troubling in multiparty parliamentary democracies because it led to the demise of papers that supported smaller parties (e.g., Hollstein, 1978). These developments, along with the rise of press barons, led the nascent European Commission to investigate the challenges posed by the mortality and concentration in many countries (Commission of the
European Communities, 1977). Press mortality itself has been shown not to be a predictor of state intervention, however, and evidence indicates preservation of diverse political viewpoints is a better explanation (Picard, 1987). The rationale that diversity of ideas and opinions were
necessary for effective democracy led many democratic countries—particularly in Scandinavia— to establish additional intervention and subsidy mechanisms that were constructed to remove direct political influence over their distribution (Picard, 1985a; Smith, 1977).
All Western democratic nations provide some support for the press. The types and strength of press intervention are consistent with general macroeconomic policies of countries, rather than a departure from them (Picard, 1985a). Even countries such as the United States—where
democratic and neoliberal arguments against subsidies are strongest—have had a wide variety of state intervention supporting newspapers (Picard, 1982, 1995), often established at the behest of the newspaper industry itself.
Support for press subsidies waned in the 1980s and 1990s as new economic priorities attracted government attention, funding for subsidies diminished, policy changes were implemented, and the rationales and effectiveness of subsidies were questioned (Ots, 2009; Picard, 2007; Picard & Grönlund, 2003). Increased concerns about subsidies violating European Commission
competition policy regarding state aid to private firms also led to concern about their provision and market effects (Picard, 1999; Psychogiopoulou, 2013).
Financial challenges for news enterprises following consumer and advertiser responses in the digital age, and the economic crisis at the end of the first decade of the millennium, in which the press was significantly affected, produced new interest in press or news subsidies (Alonso, Moragas, Gil, & Almiron, 2006; Downie Jr. & Schudson, 2009; Murschetz, 2013b; The Netherlands Press Fund, 2009).
Key Concepts
The exact meaning of the term subsidies is often unclear because many proponents use it loosely to mean any public intervention that is beneficial. Precision in the use of the term is necessary because various state interventions affect the operations and finances of enterprises differently. Subsidies involve government payments, reductions in prices for government-controlled services, and tax benefits. Other kinds of intervention include competition law application and exemptions, standard setting, price regulation, and operating requirements and restrictions.
Provision of subsidies can be considered either indirect or direct, with indirect subsidies being the most common among democratic nations because they are supported by news industries and tend not to concern press freedom observers.
Indirect subsidies include concessions and preferential treatments that lower the costs of the news companies. They are not provided directly to a media firm, but to the industry or a specified segment of an industry. Examples include:
• Special tax rates (often applied to Value added tax (VAT) on newspaper sales). • Preferential postal tariffs on news distribution (e.g., Kielbowicz, 1990).
• Government/public sector advertising.
• Government/public sector funded readership initiatives, e.g., newspaper subscriptions targeting schools, libraries, and young readers (e.g., Raeymaeckers, Hauttekeete, & Deprez, 2007).
• State initiatives for competence development and training. • Reduced taxes and social fees for employing trained journalists.
Some states are being reluctant to recognize tax exemptions and preferential postal tariffs as being “subsidies”. Though less researched, studies have shown that the monetary value of indirect subsidies often amount to much larger sums than the direct press subsidies (Nielsen, 2014; Nielsen & Linnebank, 2011; Ots, Krumsvik, Ala-Fossi, & Rendahl, 2016). Most countries apply VAT reduction, or even VAT exemption, on newspaper sales, and many of them are looking into applying this also on digital sales. A fewer number of countries apply VAT reductions on advertising sales and other areas. Due to its general application, it affects all companies in the industry and is considered relatively easy to administer (Nielsen, 2014). The value for individual firms is related to their volume of sales, meaning that larger firms benefit more. As direct subsidies are under pressure in many countries, the relative importance of indirect subsidies tends to be growing (Ots, Krumsvik, Ala-Fossi, & Rendahl, 2016).
• Direct subsidies include different funds provided directly from the state to media firms, rather than the industry. Examples include:
• Operational subsidies for producing and publishing news.
• Innovation subsidies to encourage experimentation and business development in the news sector.
• Distribution subsidies to promote the public availability and access to the news publications.
• Investment subsidies and loans to facilitate access to/acquisition of necessary production equipment and facilities.
• Special grants for news publishing in minority languages.
The use of direct subsidies has been contested and debated over the years. The level of
controversy often depends upon the administrative mechanism in which decisions to provide the subsidies take place.
The terms used to describe these allocation mechanisms for press subsidies are general or selective (e.g., Murschetz, 2013a). A general application of a support measure will affect all companies in the market as in the case of tax reductions or lowered social fees for employing journalists. However, a general subsidy will not have any redistribution effect within the industry, thus not changing anything in the competitive situation for the newspaper market (Picard, 2003). A selective subsidy on the other hand will be directed toward a specific group of media firms— for example, subsidies targeting companies based on financial performance or market position, subsidized products for minority audiences. The potential for political interference in selective subsidies is higher, whether it is exercised or not. However, such subsidies can still sometimes be useful to news organizations. In order to avoid qualitative assessments and subjective bias of politicians or administrating bodies, the allocation can be based on pre-agreed quantitative criteria that, when met, result in the subsidy being provided. Such criteria might include being a secondary news provider in a market, a startup news enterprise that has existed for a year, or a publication with at least 50% news content. Such criteria are designed to limit the abilities of administrators to determine who receives or does not receive the subsidy. Regardless of the automatic allocation criteria, the EU has recently been looking negatively on selective subsidies, forcing countries like Sweden to redesign their press subsidy tools to be more general in their application.
The economic and financial impacts of various subsidies differ, and these differences are
important to their usefulness in achieving desired policy outcomes (Picard, 2003, 2007). Indirect subsidies, for example, do not alter the competitive situation of firms or markets because they equally provide proportional benefits to all enterprises. General subsidies such as postal rates or tax exemptions have tended to address operating costs of news enterprises providing short- to mid-term financial benefits but generally not addressing longer term sustainability. Selective
subsidies tend to support short- to mid-term financial benefits, but a few have targeted
innovation, market improvement actions, and long-term production cost issues for specific firms to make them more sustainable.
Media Subsidies in Media Systems
Press subsidies is just one alternative of many available for policymakers when supporting pluralism and the functioning of a media sector that serves the public interest. Subsidies to news enterprises can result from media-specific policies, but many other policy regimes affect media structures and operations, including cultural policy, industrial policy, competition policy, security policy, and privacy policy. Three of these regimes are particularly significant to press subsidies: 1) cultural policy involves actions designed to promote specific forms of cultural expression, usually domestic expression; 2) industrial policy incorporates efforts to promote development of domestic industries to provide employment and contribute to economic growth; and 3)
competition policy is a market-oriented intervention designed to ensure fair and equitable competition among firms and to halt practices that harm competition. At times the policy being pursued by one regime can conflict with or counteract policy being pursued by other regimes if they are not well coordinated.
How policymakers create media policy, what fundamental principles guide their choices (Picard & Pickard, 2017), and how and to what extent subsidies and other tools are used within that mix, varies considerably. The balance between media policy tools varies over time, as old policy paradigms fade and new dominant policy trends emerge (Cuilenberg & McQuail, 2003; Iosifidis, 2011). For example, several authors (Cuilenberg & McQuail, 2003; Freedman, 2008; Hallin & Mancini, 2004; Nielsen, 2014; Ots, Krumsvik, Ala-Fossi, & Rendahl, 2016) have described a gradual liberalization of European media markets, a decreased use of market interventions in the form of press subsidies and public service initiatives, and an increased reliance on market mechanisms in the functioning of markets for cultural products. In the short and medium term, research has accordingly shown how external changes in public finances or dominant political philosophies, directly shape the use of press subsidies over time (Ots, Krumsvik, Ala-Fossi, & Rendahl, 2016). Further, as many countries seem to lack a deliberate strategy for necessary press policy reform, press subsidies seem to be adrift as the surrounding society and its social,
technical, political conditions change (Nielsen, 2014). In this process it should also be
acknowledged that supranational bodies, such as the EU, are playing increasingly important roles in the design of national subsidy schemes (Harcourt, 2005; Ots, Krumsvik, Ala-Fossi, & Rendahl, 2016; Psychogiopoulou, 2013).
Research has also shown how parallel media policy paradigms coexist. Hallin and Mancini accordingly described three broad media system types and corresponding media policy mixes that have their roots in their respective regional, historical, cultural, political, and economic contexts. In their view, the Anglo-Saxon countries have traditionally advocated a hands-off “market approach” with limited state intervention, little use of direct subsidies and other selective
instruments, but at the same time not being foreign to providing quite generous general tax breaks to news media (see also e.g., Cowan & Westphal, 2010; Nielsen & Linnebank, 2011) or eases in the application of competition law (Busterna & Picard, 1993). The Mediterranean countries have a history of “interventionist” media policy schemes involving all kinds of direct and indirect subsidies, France being perhaps the most telling example with a large and complex press subsidy program. The northern European countries have combined commercially strong print sectors, with selective interventions, particularly in the form of direct press subsidies (Hallin & Mancini, 2004).
Whereas Hallin and Mancini’s broad typology served its purpose to illustrate the emergence and rationales of parallel media systems, their categorizations have not been undisputed. Puppis (2009) highlighted that the inclination to use interventionist approaches was also strongly related to the size of the media market. Smaller nations would, because of inferior resources in terms of human capital, advertising, audience, and language markets, be more inclined to use government intervention including press subsidies to support their media industries. (For further variations in categorization of media system types see also, e.g., Brüggemann, Engesser, Büchel, Humprecht, & Castro, 2014; Curran, Iyengar, Lund, & Salovaara-Moring, 2009; Hardy, 2010; Picard, 1985a; Siebert, Peterson, & Schramm, 1956).
In short, the rationales of the different nation-level media policy schemes, the schemes and their designs must be seen in their wider economic (Picard, 1985a), cultural (Holtz-Bacha, 1994), and temporal (Cuilenberg & McQuail, 2003) contexts. In line with these findings, it has more recently been argued that the designs of the relatively extensive Scandinavian media subsidy schemes need to be understood as bricks in the construction of a media or information welfare state, where quality news, like healthcare, education, infrastructure, and law enforcement, should be available to all citizens in all strands of society (Allern & Pollack, 2017; Kammer, 2016; Syvertsen, Enli, Mjøs, & Moe, 2014). This particular preference for subsidies as interventionist policies sets the Nordic countries apart from other northern European countries. Its emergence is best explained as historical divergence from basic market liberal philosophies, toward a more active government-state, in areas that are seen as carrying vital functions for all citizens. Since the end of World War II, libertarian principles have formed the basis for press policy-making in many Western countries. Ensuring press freedom and free competition have accordingly been the core objectives of the states to ensure that the press can perform their watchdog function in democratic societies. In 1766, the world’s first press freedom act was established in Sweden. In the United States, rampant ownership concentration in the newspaper industry caused the Hutchins Commission to propose, in 1947, that the press sector needed not only to be free, but also to act responsibly in its practices (Blanchard, 1977), carrying out their work in the best interest of people, and “providing the opportunity for diverse voices to be heard” (Picard, 1985b, p. 39). Further, the commission concluded that the state carries the responsibility of making sure that the press obtains these goals, including addressing the problem of a
decreasing number of owners controlling the economic and political power over the press and the market place for ideas (Gustafsson & Hadenius, 1976). The intense debate that followed in the United States concluded that financial dependencies between state and the media were risky, and that from a libertarian point of view the role of the state was neither to preserve a collapsing industry, nor to impose demands of social accountability and governance over the industry. Many other countries in the Western world made a similar assessment.
The Scandinavian countries identified, like the Hutchins commission, that the market
concentration trend was a threat, both to the quality of journalistic products and to pluralism in the marketplace for ideas. However, since the markets for news in the Scandinavian countries were largely regional, and the ties between the press and political parties were particularly strong, it was deemed that the creation of local news monopolies would lead to even more severe
consequences than elsewhere (Gustafsson & Hadenius, 1976). Whereas the newspaper industry itself argued for a more market-liberal position of the state, it was counter-argued from
politicians that since the commercial market itself obviously had failed to cater for a diversity of choice for readers, it was the task of the government to intervene. The creation of subsidy systems was in this context seen as a solution that would support diversity of choice for the readers without interfering in newspaper operations. Some authors have pointed out that these measures have been enabled by the high level of trust that the state as an institution enjoys in the Scandinavian countries (e.g., Picard, 1985b). Low levels of corruption in combination with a
public view that the state is essentially “good” and working for the benefit of its citizens, has enabled extensive regulation of markets including broadcasting, wine and spirits, and gambling, with maintained levels of popularity among the publics. However, in an increasingly globalized world, several of these markets have been deregulated since the 1990s, and in that context, the future of Scandinavian press subsidies seems highly uncertain.
Arguments For and Against Press Subsidies in Media Systems
A wide variety of arguments and rationales are asserted for subsidies, mostly involving desires to ensure political pluralism, preserve competition, and address market failure to provide the range of content desirable. Other rationales include helping to preserve and promote needs of linguistic or ethnic subcultures and to promote domestic cultural expression (Picard, 1999). Unstated rationales often involve publishers’ and journalists’ self-interests or resistance to innovation. Consequently, most subsidies address symptoms rather than underlying causes involving economics, consumers, and advertisers, and do so in highly limited ways that reduce their effectiveness (Picard, 2003, 2007).
The arguments against the use of press subsidies are often grounded in the risk of creating unholy alliances between the news media as a watchdog over those in power, and the state as the hand that feeds it. Wherever the newspapers draw critical resources, there is also a possibility that the holder of the resource will somehow wield that power to influence the news; its selection, presentation, or angle. In countries that traditionally see a more passive role of the state, it has typically been argued that issuing government grants to news media creates risk of compromising their integrity and independence (Hollstein, 1978; Schizer, 2011). For instance, when the
Observer received a government grant in 1840, it was the last British newspaper to receive this sort of income (Curran & Seaton, 2009). The growing advertising market was seen as a substitute for government funding. It would provide newspapers with a new sort of economic independence from political parties and private philanthropists or corporate benefactors. However, the newly won financial resource did in fact not cut the political ties of the press, neither in England (Curran & Seaton, 2009), nor elsewhere. Further, all resources, whether acquired from the state or from the market will to some degree shape the behavior of news organizations. Many studies have accordingly taken interest in the influence of advertisers on media content, or what an intensified chase for audience attention and clicks has done for the selection of news. Whereas the potential political influence was used in England as an argument against direct subsidies, several countries in northern Europe choose to regard the political bias of news as given, and used it as an
argument for press subsidies. This connection between news and politics has formed the basis for press subsidy design in several European countries, where subsidies are aimed to secure external pluralism through a variety of newspapers representing different political affiliations, particularly those expressing minority opinions. As the northern European press has been increasingly depoliticized, studies have accordingly noted a decreasing interest in press politics from both politicians and publics (Ohlsson, 2014).
The Design/Components of National Press Subsidy Schemes
Over the years a number of initiatives have been taken to describe different national media policy schemes including the design of the different subsidies that are being used, how they are
operationalized and combined, their governance and functioning, and their cost. Many of these have aimed to collect, document, and compare experiences from different parts of the world (even though the vast majority of them have focused solely on nations in Europe and North America).
Some have had the ambition to compile and compare a larger number of national descriptions (Alonso, Moragas, Gil, & Almiron, 2006; Murschetz, 1998, 2013b; Nielsen & Linnebank, 2011; Smith, 1977; The Netherlands Press Fund, 2009), whereas others have focused on specific nations or tools (Cowan & Westphal, 2010; Gustafsson, Örnebring, & Levy, 2009; Ots, 2009; Picard, 1982; Picard & Grönlund, 2003; Skogerbo, 1997).
The descriptive overviews and comparisons of press subsidy/press policy systems have largely supported the typology of Hallin and Mancini (2004), with more developed direct press subsidy measures in Northern and central Europe, more general industry support in the Mediterranean, and more market solutions in the UK and North America. However, that being said, many of these reports paint a picture of a media landscape where traditional newspapers are losing readers, where media consumption and advertising is being increasingly digital, and where globalization and international competition make national media policies less powerful as market-shaping devices. Many countries are struggling to, on the one hand help the traditional press and support original quality news, and on the other hand more broadly find a position of media policy in the new digital and global information landscape. At the same time public spending on subsidies is put under increasing scrutiny and pressure. Some countries, like Finland, have in this process practically abandoned their subsidy schemes. In other parts of the world, there are voices heard to reconsider introducing new subsidy schemes (Greenberg, 2012; Matthews 2017; McChesney, 2016; Pickard, 2017; Schizer, 2011).
Little is known, however, about the dynamics of media policy systems—literature has largely regarded subsidies as something that countries have, or don’t have. Though the need to reform and adjust media policies to the forces of digitization and globalization is widely acknowledged by both policy makers and academics, there is no consensus as to what should be done, either to introduce new subsidy schemes, or to end ones that have become increasingly irrelevant or inefficient. Further, the growing number of stakeholders—national, supranational, commissions, task forces, corporate, lobbyists, experts—involved in the making of policies, makes media policy-making a complex, and often non-scientific, process (Freedman, 2008). Interlocked by commitments of several parties, the policies themselves are rigid institutions, and in most
countries there are few political gains from lobbying for changes that would negatively affect the economic conditions of news media (Ohlsson, 2014). Examples for different countries have shown that any reductions in subsidy levels have therefore been motivated by fiscal constraints in the state budget, or supranational pressures (from, e.g., the EU), rather than by rational arguments pointing toward the need to actually reform the subsidy allocation in a changing world (Ots, Krumsvik, Ala-Fossi, & Rendahl, 2016).
The Effects of Media Subsidies
It is generally agreed that journalism provides a value to democratic societies beyond the economic profits that news companies extract from the market. This issue has been particularly accentuated in the path of the newspaper crisis. The efforts by governments using subsidies as policy interventions to address market failures and the potential underproduction of quality news are largely supported by economic theory (Murschetz, 2013a). However, still little is known about how effective the subsidies have been in practice.
Possible effects of subsidies may potentially be observed on the firm level (economic performance, quality and quantity of editorial material, journalists employed, etc.), on the industry level (number of companies and titles, total circulation and readership, level of market concentration, etc.), or on the societal level (the pluralism of voices, participation in the public debate, the information capital of citizens, etc.) (See e.g., Ots, 2009; Murschetz, 2013a). At the
same time, in the light of ongoing broader societal changes, it has been difficult to identify and assess definitive effects and the extent to which they are caused by press policy interventions. Although press subsidies have been in use by governments for centuries, their effects are unclear, and it has been difficult to isolate causal relationships between subsidies and specific outcomes in the industry or among audiences. Most of the evidence is therefore merely indicative or in other ways ambiguous, and econometric models that have attempted to predict subsidy effects (Battaggion & Vaglio, 2017; Kind & Møen, 2014; Leroch & Wellbrock, 2011) still lack empirical validation. For instance, whereas the acclaimed negative effects of raised tax rates on newspaper sales often get alarmistic proportions in the political debate, the actual observed evidence of the effects is both scarce and uncertain (Kind & Møen, 2014). Additional studies could help identify whether freed financial resources from lowered taxes have been reinvested in internal operations, leading to better content quality, lowered consumer prices, or whether they have been used for higher dividends to newspaper owners and shareholders (Ots, Krumsvik, Ala-Fossi, & Rendahl, 2016). The same questions of how resources have been used apply to direct subsidies (Picard, 2003).
Whereas some studies have been more positive in their analysis of the historical effects of subsidies (van Kranenburg & Pfann, 2002), others are more pessimistic about the ability of government subsidy intervention to promote quality (Leroch & Wellbrock, 2011) or new venture creation (Gustafsson, 1993).
Over time, some of the original motives for implementing subsidies seem to have been gradually eroded (e.g., Ohlsson, 2014). This includes the objective of Finnish press subsidies to maintain political diversity among the press, which has not managed to hinder the de-politicization of the press (Picard & Grönlund, 2003). In Sweden it has been shown that while subsidies have been instrumental in maintaining a large number of titles on the market, this has not stopped the underlying concentration of ownership (Ots, 2009) and increasing cross-publishing of editorial materials in the search for efficiencies (Ots, 2012). It can therefore be questioned what the overall societal effect of the subsidy has been.
Do news subsidies make our societies better and our citizens more informed? On a broader societal level, Curran, Iyengar, Lund, and Salovaara-Moring, (2009) could show that audiences in countries with more market-oriented media systems, like the United States, had a radically lower knowledge about both domestic and international news than audiences in countries with more state intervention in the form of public service TV and media subsidies, such as Denmark. This was particularly evident in groups with low income or low education. However, as the authors pointed out, it is difficult to isolate the media system effects from the broader educational and cultural differences among the compared countries.
The uncertainty of subsidy effects has made legislators increasingly interested in making subsidy usage more accountable. The Nordic countries are for this reason focusing their direct subsidies specifically on editorial production rather than subsidizing media operations in general. In several European countries innovation subsidies are designed to finance only temporally delimited projects with specific deliverables aimed to improve, rather than merely maintain, the situation of news organizations (van Kranenburg, 2017).
Discussion of the Literature
The collective body of academic literature on press subsidies has described and compared the development of press subsidies over time and across nations and media systems. In times when globalization and digitalization are rapidly altering the conditions for news media, there is also a
range of issues, needs, and requirements to which national media policies need respond. In this section, our main argument will be that to address contemporary challenges, policymakers and academics will need to rethink the definition of press subsidies, and increasingly consider their purpose and application in relation to other policy areas. The overarching policy objective, as it has been phrased particularly since the newspaper crisis started to accelerate around 2010, is to support journalistic functions in society in its various forms. The word “press” in “press subsidies” is easily misleading us to think about support to certain distribution technologies or companies in the traditional newspaper sector. Likewise, the word “subsidies” has been
dominating the literature, likely because subsidies as policy tools are possible to design, delimit, and distribute specifically provide direct support to press and journalism, whereas the potential contributions and effects of broader, non-sector specific, forms of regulation such as competition law, copyright law, and tax law, have in comparison received scant attention by media scholars over the years.
There are many challenges for states wanting to support journalism (e.g., Ots & Krumsvik, 2016; Sjøvaag & Krumsvik, 2017). Audiences are facing an abundance of digital information, which is putting pressure on the quality news providers to keep their reach and relevance in societies. Global tech giants and content aggregators such as Facebook and Google are taking large shares of advertising revenues from national markets, giving much back in terms of tax payments. Sector-specific policies such as press subsidies are struggling to keep up with the general development (see e.g., Nielsen 2014), but there are tendencies to shift the subsidies from supporting news companies to supporting journalism, from supporting ongoing operations to supporting innovations.
The general policy trends toward media market liberalization, in combination with shrinking budgets for public funding, have over past decades made states less interventionistic in their policy approaches. However, more recent alarms about fake news and the threat it poses to democratic societies have given both policy-makers and publics reason to appraise the role and value of journalists and journalism. With the warning that the fourth estate is being eroded, there have been calls to legislators to help save “quality” or investigative reporting via government intervention. There have been suggestions both on national levels and on the supranational (European Union) level to respond to the newspaper crisis—but there remains a lack of
successful policy examples. Measures like France’s Google tax, innovation subsidies, and even an EU attempt to fund investigative journalism have so far failed to produce effective results.
Against this background there are several areas where future research can play an important role: One field of research involves making broader inquiries into how governments can address the imbalances in media markets, where large tech firms are reshaping these markets and reaping profits in ways that may not be in the best interest of societies. The overall question is not how to continue to subsidize the press, but rather how to organize digital markets in ways that best serve the interest of democratic societies. Such inquiries may look into the role of copyright law and how journalistic content is redistributed on digital platforms, how digital media products are sold and taxed, how competition law can prevent certain intermediaries from taking unfair advantage of their market positions.
In a second area, the literature on media subsidies has so far had very limited cross-fertilization with the theoretical developments in general public policy literature and in leveraging insights on subsidy implementation and effects from other fields. Whereas media markets have some unique characteristics and media policy has some specific objectives and requirements, there may still be much to learn from the fields of political science, economics, and business studies about how
subsidies have been designed and implemented in other areas to promote firm growth (e.g., Bergström, 2000) or innovation (e.g., Bronzini & Pisello, 2016).
A third research endeavor needs to critically examine subsidies as a phenomenon, exploring their benefits and costs, and the effects they have on newspapers, newspaper markets, newspaper consumption, and journalism. Greater focus needs to be placed on who gets funded, the extent to which subsidies achieve their purposes, their effects on innovation, and other policy alternatives, Given digitization of news and journalism, there is a need to rethink the media policy where technology-specific policies may hinder rather than encourage news industry transformation. Effectively supporting news operations is not as simple as handing them cash or reducing their costs slightly. It will require more governmental policy organizing the digital market, addressing negative effects of large intermediaries, modernizing copyright law, reconsidering how public service is conceived and pursued. Efforts will need to strengthen the collective competitiveness of news providers by promoting and supporting innovation networks, joint ad sales networks, cross-border investigative reporting, and thoughtfully using subsidies to help achieve public objectives.
Further Reading
Doyle, G. (2002). Media ownership: the economics and politics of convergence and concentration in the UK and European media. London: SAGE.
Feintuck, M., & Varney, M. (2007). Media Regulation, Public Interest and the Law (2nd ed.). Edinburgh: Edinburgh University Press.
Freedman, D. (2008). The politics of media policy. Cambridge, UK: Polity Press.
Garnham, N. (2005). *From cultural to creative industries. International Journal of Cultural Policy, 11(1), 15–29.
Humphreys, P. (1996). Mass media and media policy in Western Europe. Manchester, UK: Manchester University Press.
McQuail, D., & Siune, K. (1998). Media policy: convergence, concentration and commerce. Thousand Oaks, CA: SAGE.
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