April Newsletter | Saving the media sector: a short window of opportunity

Saving the media sector: a short window of opportunity

Media companies innovate faster than ever – running for their lives, in fact. For example, launching digital events and monetising their booming readership. Alas – outside public broadcasting – that will not be enough. The sector needs help on three fronts: emergency aid, fair platform regulation, and acceleration of innovation.

Fondation EURACTIV has been ‘crying wolf’ for a few years: asking for rebalancing versus platforms, not just fundamental rights and self-governance on disinformation. Now, the wolves are not only Facebook and Google, but massively reduced  revenues. And vultures are ready to snap up: media assets are cheap for oligarchs, while populists and foreign powers feed fake news.

Not convinced yet? Here is a parallel with the health crisis, for most countries:
. after clear warnings by experts: little anticipation, slow preparation
. only when deaths grew: authorities and citizens acted forcefully
. irreparable human tragedies: leading to much higher costs.

Warnings (firings and fire-sales) have started, but deaths (bankruptcies) could be in full swing only this Summer. Against the odds, will governments and the EU anticipate, decide and act before tragedies? (less scrutiny and trust, at the time of strong Executives, weak Parliaments,  and reduced liberties)

. Emergency aid: fast enough? Actually, alerts are heard already. Stakeholders, journalists and parliamentarians have raised the alarm, officials are busy thinking of actions. The EU usually goes for horizontal measures, like authorising State Aid, and loan guarantees, plus small projects. But this Commission claims to develop industrial strategies, which have to be sector-specific. The press has poor balance sheets and margins around zero, so mere deferments will not work. What is required now are chiefly new revenues, tax cuts, and more equity. For example, to sustain journalists’ jobs in the transition, massive public interest advertising would help communication in the crisis, subscription vouchers would undermine fake news, and VAT could be dropped.

What about the other two needs, to give media folks hope for the medium term?

. regulating platforms: hesitating? The Digital Services Act is being delayed from 2020 to 2021… The information sector enquiry has not yet materialised… The Project Group of Commissioners for media has met only once… Every time there is a wave of fake news, Commissioners have to beg for help… the platforms, the same that are lobbying against regulation…  Is this the programme Parliament supported last year? Will it be the same five-year saga as for the copyright directive? Meanwhile, platforms are increasing their dominance… and their EU lobbying expenses. On the other side, neither policymakers, nor media associations are converging fast enough: we all share a responsibility.

. accelerating media innovation: doable? There is hope, for example possible funding from R&D and skills budgets, plus bundling existing and future projects under a NEWS programme. Like the existing MEDIA programme for audiovisual. Similar schemes are considered at national level (see below): declaring news media an ‘essential activity’ would help focus recovery actions.

These three groups of ideas are widely supported. There is a Council of ministers culture and media on 19 May. But the preparatory video conference spent very little time on news media issues. So, the coming weeks require political leadership and re-purposing of budgets: who is in charge? where is the Coronavirus Media Action Plan?

Christophe Leclercq                         Marc Sundermann
fondateur@euractiv.com                  Senior Fellow Fondation EURACTIV
@LeclercqEU                                    (and former EU Representative, Bertelsmann)

THINK – Supporting media independence & sustainability in times of crisis

THINK – MEDIA CRISIS & AWARENESS

Open Letter: EU leaders must stand up to protect the news media sector
This Open letter to EU leaders from more than 40 MEPs calls for immediate actions to support Europe’s news media sector as it faces up to the sudden loss of advertising revenue caused by the COVID-19 crisis:
‘’We are facing a crisis on an unprecedented scale. Immediate direct financial support is required in order to preserve media plurality and quality journalism across the European Union’’. Measures proposed include public interest advertising campaigns, vouchers for subscriptions, and setting-up a NEWS programme.

Journalist trade Unions call for EU and government actions
The European Federation of Journalists makes similar points, plus a number of practical recommendations, regarding journalist wellbeing, jobs, costs and revenues.

British news outlets ‘could fail due to coronavirus ad-blocking’
Many brands are using keyword blocklists to stop their adverts appearing next to stories about Covid-19. Media outlets could miss out by as much as £50m in revenue. This threatens their ability to continue employing journalists and producing news stories. (via The Guardian)

FT and Guardian cut pay of senior staff
”Despite the huge increase in traffic in recent weeks, the Guardian expects a decline in revenue from advertising and newspaper sales. Enders Analysis has warned that the UK news industry may lose up to £330m of advertising revenue this year, roughly 30 percent of the annual total”.  (via FT)

We know coronavirus has wrecked the events business for the media in 2020. But will it come back post-virus? (Via Nieman Lab)
La presse écrite à l’épreuve de la pandémie (via Alternatives Economiques)

Foreign powers and oligarchs buy European media assets on the cheap. For example, Egyptian billionaire Sawiris increases hold of Euronews, and  Czech Médea is controlled by the Chinese holding CITIC. 

THINK – FUNDING FOR MEDIA

(these below are just examples of public actions. Many have been mentioned around the April video conference of Ministers for culture and media, preparing the 19 May Council. Others, also international and foundations, are listed here by WAN-IFRA).

COVID-19 Audiovisual Sector Measures
Council of Europe’s Audiovisual Observatory lists national support measures for the media sector

GERMANY: 50 bn aid for culture & media, putting other countries to shame
“Journalism is ‘security-relevant’ & ‘critical’ infrastructure”
Press release shared by the ministry of culture: a 50 billion aid package is foreseen to back small businesses and freelancers, including those from the cultural and media sectors.
Zwei Milliarden Euro – Bundesregierung plant Corona-Hilfe für Startups
Christophe Leclercq comments, on both programmes: “The German actions are indeed a model. There is a Council of Minister for culture and media in May: if the Commission under the current Croatian Presidency does not fully deliver what is required, then maybe under the upcoming German Presidency?”

FRANCE – ENTRETIEN: « Soutenir la publicité est une mesure d’urgence et de relance » (via Ouest-France). La députée Auron Bergé propose la mise en place d’un crédit d’impôt sur les dépenses de communication pour soutenir les médias durant la crise du coronavirus. ‘’Leurs ressources publicitaires se sont effondrées. Ce crédit d’impôt pourrait y remédier’’, explique-t-elle.

Premier plan d’action en faveur des artistes-auteurs
Des mesures d’urgence pour aider les artistes et les auteurs ont été annoncées par le gouvernement français. Ils bénéficieront du fond de solidarité de 1 milliard d’euros, du report ou étalement des loyers, et de mesures sectorielles complémentaires.

ITALIE – Un crédit d’impôt existe depuis 2018, mais en raison de la crise sanitaire, le gouvernement italien a renforcé ce mécanisme. Ainsi le ‘’bonus’’ sera accordé à hauteur de 30% de la valeur des investissements pour 2020-2022.

USA – Journalism Needs a Stimulus. Here’s What it Should Look Like – The US Congress is expected to release an aid package to face the economic crisis caused by the Coronavirus.  (via Columbia Journalism Review)
The Newsonomics of the Mnuchin money and the bailout’s impact on America’s press – The new Cares Act provides emergency assistance to individuals, family and businesses affected by the Coronavirus. (via Nieman Lab)

Facebook commits $100 million to support news media hurt by the virus crisis
Christophe Leclercq comments: ”It is interesting that Google DNI and Facebook News Initiative are spending on training/innovation more than the EU itself. They have specific reasons, which are other than the public interests the EU should look at. This is a further reason for the EU to act fast and complement these initiatives.”

From the field: Croatian faces a double crisis, civil society helps (via Dafne & EURACTIV)

Philanthropy helps in the crisis (not focusing on media, via Dafne)

Other emergency relief, also international and foundations, are listed here by WAN-IFRA.

THINK – COMPETITION & PLATFORM REGULATION

Fast aid by platforms, but ulterior motives? Kiss of death?

A Global Journalism Emergency Relief Fund for local news
Google is providing financial support to news organisations producing original journalism during this time. Christophe Leclercq’s comments: “On the face of it, this is good for some media, and surely for Google’s image. Although I couldn’t easily find the amount at stake (to put things into perspective, an envisaged tax on platforms has been estimated at 5bn € per year). Surprisingly, this requires participating media to become ‘Google Partners’, meaning using Google ads. Google is also waiving ad serving fees on its Ad Manager: sounds helpful, but an extension of dominant position? The majority of Google ads initially came from regional media and classified ads, now vanishing. These ‘aids’ are now the kiss of death?”

Slow, but legitimate regulation?

Google to agree with French press publishers on compensation for press content within three months
The ruling by the French competition authorities on April 9th requires Google to negotiate a licence with publishers. (via vg. media). Christophe Leclercq comments: “While this is a major win for the media sector, this is essentially what the EU copyright directive prescribed, that has been in the making since five years, and turned into French law last september.”

Australia to force Google, Facebook to pay domestic media to use content
Australia now understands that the government has to step in. It also spends 50 mio Aust $ on a public interest news gathering programme, and a support package for local media businesses.

The government, public and tech giants such as Google must find ways to support the news industry
Dame Frances Cairncross, who chaired the House of Lords’ report on the media, stressed:  “The pressures are so imminent and so powerful that there is a danger that much that is good and would otherwise have survived, will be destroyed,” she says. (via The Guardian)

Tech giants are serious about lobbying in Brussels
“Google, Facebook, Apple and Twitter share much responsibility for the mess we’re in – their executives have spent years dismissing news journalism as this era’s fax machine, while pocketing large amounts of money from the content it provides. Digital newsroom initiatives and paid-for research do nothing more than put a shiny gloss on that fact.” (via Euronews)

DO – Exchange and training programme for media professionals

Stars4Media is a unique opportunity for media professionals to gain skills around data journalism, fact-checking, and business development, and therefore boost their careers, and join a vibrant community of media innovators. Given the Coronavirus crisis, The Stars4Media Lab was transformed at short notice into an online training event (30/03-1/04). It connected media innovators and media outlets:
– 35 people attending each session: 3 workshops by practitioners, 2 pitching sessions, one policy debate.
– 12 jury members/media experts and 15 initiatives presented
– Six were selected already, and several more received ‘conditional green lights’, to be confirmed by the last call

Participants are learning to work together via online tools, to break silos and help the media sector recover from the current crisis.
Final deadline: Wednesday May 20th
An additional wave of application, in addition to DATA and TRUST: CRISIS innovations: initiatives focusing on how the media are responding to this “coronavirus” crisis.

Events on Media Policy and Media Innovation

The Future of Europe after the COVID – Open EU Debate
April 28, 2020 (webinar)
The response of the first ‘Geopolitical’ Commission and the role and challenges of the European Media Sector

Abonnements numériques et monétisation des contenus d’information  – October 2nd, 2020 Paris
Cette conférence s’intéresse aux formats et aux contenus qui encouragent la conversion et la fidélisation des abonnés numériques.