Media viability

7 countries score a high risk (Albania, Bulgaria, Greece, Ireland, Italy, the Netherlands and Turkey) in this indicator. Most countries (21) fall within the medium risk catego- ry. Only two countries score a low risk, Poland and Hungary. In Hungary, the low risk score is largely due to significant state advertising.⁴⁰ The role of this type of state adver- tising (direct or indirect, as it is often provided via state-controlled companies, or even via private companies that are influenced by political pressure), must be distinguished from transparent public support to the media. The holistic approach of the MPM is valuable, since it permits us to read this result in combination with the high risk shown under the indicator on State regulation of resources and support to the media sector, which assesses how state advertising is an instrument for media capture in Hungary. In Poland, the low risk score under this indicator is due to the healthy economic situation, which, in turn, has brought a sustained growth in commercial advertising expenditure for news media. The role of government and state-owned companies advertising, and its relevance, is relevant in Poland too as does the development of alternative sources of revenue for the media in the country. ⁴¹

None of the sub-indicators on Media viability record a low risk. As can be seen in the following figure, the maximum risks emerge in two specific media sectors: newspapers and local media. AVMS, radio and digital native perform better, at medium risk; and so do the sub-indicator on Media market resources, which reflect the extent in which news media providers are seeking to develop innovative and alternative business models.

Fig. 3.2.4.b. Indicator on Media viability - Averages per sub-indicator

40 “The reason behind the growth is not that commercial advertisers spend more on advertising, but the enormous amount of public money spent by the government on self-advertising and propaganda (...) . This alarming quantity of money is used not only for financing pro-government media, but also for controlling the independent media. (...). Not only do the pro-government media build their entire business model on state advertising, but some independents, and critical outlets too”. (Batorfy et al, 2020)

In the sub-indicators on Revenue and employment trends, the MPM evaluates the growth of, or the decline in, the sector-specific revenues and journalistic employment rates in the past two years in relation to the GDP trends in the same period. In the MPM assessment, a decrease is evaluated as being a high risk, an increase as a low risk; if eco- nomic trends are stationary; this is registered as a medium risk.

No sector in the news media industry registered an increase in the past two years (no sector is therefore at low risk); the sectors at medium risk (stationary revenues and em- ployment) are AVMS (42%), radio (47%) and digital native (47%). The sub-indicator on newspapers (aggregate in which the press industry is considered, including the resourc- es coming from the digital version of printed copies) scores a high risk rating of 80%: in 24 of the countries monitored by MPM, newspapers’ revenues and employment trends have actually decreased in the past two years. Similar trends can be seen in the Local media; this sub-indicator covers all kinds of local outlets (newspapers, audiovisual, ra- dio, digital), which historically had a relevant role in informing small communities, fostering their democratic participation, and monitoring the local powers. The average score is 76%, with a high risk in 23 countries.

Fig. 3.2.4.c. – Newspapers viability

Fig. 3.2.4.d. - Local media viability

The data collection for the variables on journalistic employment has been difficult to assess, as in several countries there is no data disaggregated for sectors, and sometimes no data at all on working journalists. To quote Romania’s country report, “this is an ob- stacle not just to assessment, but also to evidence-based policy development” (Popescu et al. 2020).

The sub-indicator on Media market resources specifically assesses the conditions of the advertising market and the development of alternative business models to coun- teract the decrease in sales for legacy media. Country teams evaluated the trends in advertising resources, both offline and online; as for online, the assessment is specifi- cally focused on advertising revenue that goes to media content production (a general increase of online resources, which has been noted over all EU+2 countries, may not benefit the media industry if it is harvested only by digital intermediaries). Moreover the MPM2020 assesses to what extent news media organisations in the country are developing sources of revenues other than traditional revenue streams (e.g. paywalls, crowdfunding, membership, charities, or others). The average score for this sub-indica- tor is 42%, with 13 countries scoring low risk, 8 medium risk (Austria, Belgium, Latvia, Malta, the Netherlands, Slovakia, Slovenia and the United Kingdom) and 9 high risk (Albania, Croatia, Finland, France, Greece, Ireland, Italy, Spain and Turkey). Among the countries with the lowest risk level is worth mentioning the case of Sweden, where the propensity to pay for news online is high and publishers accelerated their efforts to increase revenues from digital readers.⁴² In the United Kingdom, where Media viabil- ity fell just short of high risk (65%), by 2018, The Guardian’s online revenues began to outstrip its offline ones.⁴³

Finally, the sub-indicator on Regulatory incentives estimates the role of public policies in sustaining Media viability, both with public support schemes and fiscal incentives. A specific question has been introduced to map the unilateral initiative in some EU coun- tries for a digital service tax (DST). A DST has been introduced in 8 countries (Austria, the Czech Republic, France, Italy, Slovenia, Spain, the United Kingdom and Turkey), but it was not yet effective at the time of MPM implementation. In EU+2 average this sub-indicator marks a medium risk (63%), highlighting that the role of regulatory in- centives in supporting the media industry is scant.

3.2.5. Commercial & owner influence over editorial content