Supporting the past, forgetting the future? New RISJ study of direct and indirect public subsidies for the media

A new report from the Reuters Institute (RISJ) shows that while media industries in most developed democracies have undergone a period of profound change over the last fifteen years and many news organisations face serious economic challenges today, existing forms of public sector support for the media remain largely the same as they have been for decades.

Reviewing different forms of public sector support for the media in Finland, France, Germany, Italy, the United Kingdom, and the United States, the report 'Public Support for the Media: A Six-Country Overview of Direct and Indirect Subsidies' documents how governments—and thus taxpayers—in these countries continue to underwrite industry incumbents in broadcasting and print publishing to the tune of hundreds of millions of Euros even as audiences increasingly supplement their use of legacy platforms with online and mobile media.

Reviewing the six countries, Dr Rasmus Kleis Nielsen, who wrote the report with assistance from Geert Linnebank, writes

the main forms of public support in place today remain the same as they have been for thirty years or more, and are heavily weighted in favour of long-established legacy players.

The single most significant form of intervention in five of the six countries studied is funding for public service media, but indirect subsidies for the private sector press through tax relief amounts to hundreds of millions of Euro per year in all the countries studied.

VAT exemptions for print newspapers, the most important form of indirect support for publishers, have historically helped keep prices low, circulation high, and the industry profitable but, as the authors note,

'indirect support systems built around the print platform alone will lose their effectiveness as current in the advertising business and in paid print circulation continues.'

'It is time to review and renew media policy arrangements and bring them in line with the principles purportedly behind them and with the times that we live in' they conclude.