Crushed Media Faced With Trickle Down Plans, Few Details

Michael Hedges May 13, 2020 - Follow on Twitter

Support is strong for various economic sectors as recession worries - or worse - loom large. Industry executives and their lobbyists have made their cases and government leaders have begun to respond. As with every economic calamity, there will be winners and losers. Since that is the choice, don’t expect much attention for the media sector.

"We have seen that the advertising market has basically collapsed," said Sweden’s Culture Minister Amanda Lind last week, announcing a crisis media support initiative, quoted by Dagens Media (May 8). “The media market works well thanks to privately owned commercial media in addition to public service (media). It is important that the commercial media get through the crisis.”

The basics of this initiative, essentially on top of other media support programs already in place in Sweden, starts with a SEK 500 million expenditure, about €47 million. This media support initiative is very print-centric, typical most everywhere. About one-third of this amount is for distribution support for free newspapers. “Platform-neutral” support, SEK 50 million (€4.7 million), is allocated to areas in the country - “white spaces” - with little or no news coverage. To reduce editorial costs, the 55% quota for local news established in earlier media support packages has been set aside.

“Now it is incredibly important that the support comes out quickly to the industry,” said Swedish Media Publishers Union (TU) acting chief executive Jan Fager in a statement (May 8). “This support, together with… the decision to abolish producer responsibility for recycled paper, is central to ensuring journalistic coverage throughout the country in both the short and long term. Falling advertising revenue and the layoffs they lead to are a serious problem that affects the entire industry. This threatens the democratic conversation.”

"We will return with more details," added Minister Lind. “They must be in sync with the EU state aid system. We hope to have a regulation in place before the summer so that support can come as soon as possible.”

Ah, yes, there is the state aid problem. Applications for the “temporary operating aid” were supposed to be open this week. However, the Swedish media regulator had not “received information from the government regarding dialogue with the European Commission.”

In March the European Commission adopted a “temporary framework” meant to easy state aid rules as every Member State rushed to pour cash into strapped sectors. EC lawyers have been burning the midnight oil - working remotely, of course - to approve as many as possible, at least the big ones. EC executive VP Margrethe Vestager, reportedly, will review state aid adjustments this summer. While the various EU Member States have not received explicit media support direction, Commissioner Vestager has opened indirect support by approving state aid packages for business sectors - like travel and hospitality - that are big advertisers. Perhaps that will trickle down.

Estonia’s government offered a modest media support initiative in April, similar to that from the Swedish government, very print-centric. It covers distribution costs for three months. Media trade body Estonian Media Enterprises Association suggested other steps; a 1€ million a month coronavirus information campaign touching all media. That displeased major publisher Postimees Group and daily Postimees chief editor Mart Raudsaar said he will not participate as it might “call into question our journalistic independence,” quoted by public broadcaster ERR (April 24). He did like the idea of asking the EC for value added tax (VAT) relief. The government seems not inclined to go further.

See also...

• Hot Topics - Media in Sweden

• Hot Topics - State Aid