Press support favours traditional forms of media at expense of online services

Study reveals that press support in Finland is also much higher than elsewhere

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The support system for media in Finland favours traditional media formats of radio, television, and the printed media, at the expense of the new digital services.
      The decades-old support system hardly recognises the Internet or electronic reading devices.
      The old-fashioned nature of the Finnish system becomes clear in a University of Oxford study to be published today. The study compares media support systems in Finland, Germany, France, Italy, Great Britain, and the United States.
     
The amount of public money spent to support the media is by far greatest in Finland, where 130.7 euros per capita is spent annually to endorse the media services.
      The sum includes the public media licence fees plus the direct and indirect subsidies paid to the press.
      Europe’s lowest support is paid in Italy, where the citizens pay just EUR 43.1 per head per year for their media services.
      So far the Finnish media companies have survived the threats facing the traditional forms of media better than their counterparts in other countries.
     
The acclimatisation to the digital environment, however, has received less attention.
      “When the support of media is as high as it is in Finland, it would pay to ensure that not just the past is being supported at the expense of the future”, says post-doctoral research fellow Rasmus Kleis Nielsen from the University of Oxford Reuters Institute.
      “Finland’s present support system discriminates against the Net media.”
      Of the studied countries, Finland, Germany, and Great Britain have in use a dual model, which combines high public media licence fees and considerable indirect support of the press.
     
As Finland has lots of publications - around 200 newspapers and 3,500 periodicals - in relation to the country’s population of 5.3 million, the extent of the paid support is in a league of its own among the six studied nations.
      The indirect support received by the Finnish press primarily refers to its being exempt from VAT.
      Thus far, a zero VAT policy has been applied to the subscription fees of newspapers and periodicals, whereas a full 23% VAT has been levied in connection with similar online services.
      The zero tax rate has been in use in Finland since 1963. In the EU, Finland has been given an exclusive right to continue its support to the press. The new government has planned to impose a 9% VAT levy on journal and newspaper subscriptions.
     
The Ministry of Transport and Communications report from 2010 entitled Bittejä paperilla (“Bytes on Paper”) ascertains that there are strong communications policy arguments to justify the lenient VAT treatment of the printed media.
      According to the report, the dismantling of the support system without any substitute measures would lead to severe economic losses and the deaths of newspapers and magazines.
      This would weaken the pluralism of the media and the realisation of the freedom of speech.
     
On the other hand, the pluralism of the media is also weakened by the fact that the support system does not really take into account the journalism services online.
      Would it, therefore, not make sense for the journalism lobbying organisations to speak for the new digital media as well?
      “Once we know how diverse people’s use of media is becoming, the Internet media could surely receive the same kind of support as other forms of journalism”, says Valtteri Niiranen, CEO of Finnmedia, the Federation of the Finnish Media Industry.
      “The challenge is to decide which activities the support should be directed to, and which contents would be esteemed worthy of support. So, the key word is content, not format.”


Links:
  Supporting the past, ignoring the future? Public sector support for the media

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