Frozen 2: Communication Rights and the Thaw of Public Funding in Small Media Systems Open Access

Abstract

This contribution investigates how public funding of media can be reinterpreted to fit a communication rights–based approach to media policy. To this end, it describes and evaluates current public funding in small democratic-corporatist European media systems. While public funding is no longer “frozen” in its late twentieth-century state, as funding mechanisms have undergone significant change, when held against a rights-based approach, it appears there is a need to shift the basis for funding from safeguarding the survival of media industries to safeguarding the communication rights of citizens, allowing media to become “enablers” in executing these rights.

Due to digitization and related changes in regulation, business strategies and user behavior, traditional media landscapes, and—even more far-reaching—the public spheres of democratic societies are changing dramatically.² Aside from a proliferation of media content, at least with respect to entertainment products, and the possibility to use media content anywhere, anytime, and on any device, the Internet and especially the rise of online platforms bring about new possibilities for information, communication, and participation beyond mass media. Access to the public sphere is easier than ever. These developments have been heralded by many, especially by enthusiasts of the emerging network society such as Nicholas Negroponte³ and Manuel Castells,⁴ who embrace the increased opportunities for citizen participation and global connectivity, and by authors⁵ that explore the opportunities of digital public spaces.

However, this fundamental change comes with two main challenges for democracy. On the one hand, platforms like Google, Facebook, YouTube, Twitter, and TikTok are increasingly shaping communication in the public sphere, impacting on democratic processes. Platforms dominate economically due to network effects on two- or multi-sided markets⁶ but also contribute to the construction of reality.⁷ Developments such as the growth of disinformation and misinformation,⁸ the dissemination of problematic content (e.g., portrayal of violence, incitement to hatred, libel)⁹ and the infringement of private rights of media users raise important concerns.¹⁰ More generally, the algorithms behind search results, newsfeeds and recommended content are not transparent, can produce bias and were programmed with a commercial aim of keeping users on the platforms for as long as possible.¹¹

On the other hand, media markets are in a state of continued disruption with market structures and funding showing high levels of uncertainty and volatility. Both legacy media and journalistic online start-ups struggle to find their space and viable business models in a media ecology that deemphasizes mass media and prioritizes networked communications.¹² Both audiences and advertising have shifted to platforms like search engines and social networks. As a result, we witness a drastic decline of revenues for media organizations, which brings about layoffs, mergers, and the near demise of many local media outlets, raising serious concerns about content diversity and the role of media in democracy.¹³

This dual challenge has put media and communication policy back on the agenda of policy-makers internationally. Aside from curbing the power of platforms and holding them accountable, concerns about the dominance of social media giants and the financial crisis of media organizations have led to renewed policy attention to the importance of journalism to help ensure a healthy democracy. In this respect, institutionalizing a publicly funded public service media (PSM) organization or subsidizing private media may contribute to ensuring media production. However, as recently as 2014, Nielsen¹⁴ observed that media subsidies appeared “frozen” in time. Despite the ongoing structural transformation of media systems, media regulation still upheld the traditional distinction between print and broadcasting¹⁵ and public funding mainly favored legacy media. Following Nielsen, such a situation leads to policy drift, that is, existing regulation loses its effectiveness.

Six years later, this contribution analyzes the current state of public funding for media—both PSM funding and media subsidies—in small European media systems. We ask whether we can witness a thaw of public funding, arguing that effective subsidies that keep pace with media change contribute to the realization of communication rights. In addition to providing an up-to-date overview of public funding, the aim of this article is to show how a rights-based approach can help to inform media policy that enables media to play their democratic role in a digitized media ecosystem. Such a perspective on media and communication policy in general and public funding of media in particular enables us to address the power imbalance between rights owners (i.e., media users) and those ethically, legally, or economically obligated to ensure and respect those rights.

After this introduction, we develop a theoretical framework that discusses key aspects of a communication rights–based approach as they pertain to media policy-making and public funding and that looks at the current state of research into public funding of media (section “Public Funding of Media from a Rights-Based Perspective”). Next, we discuss the methods of data collection and analysis (section “Methods and Propositions”) before presenting the results of the comparative study of public funding in selected small European countries (section “Results”). Finally (section “Discussion and Conclusion”), we discuss the accomplishments and shortcomings of the current funding systems through the lens of a rights-based approach and formulate productive ways forward for public funding to better fit the needs of the rights holders in a digitized media ecosystem.

Public Funding of Media from a Rights-Based Perspective

A Rights-Based Approach to Media Policy

The renewed interest in communication rights of individuals has been ignited by developments in digital media of which the business models—based on turning user data into commodities—have pushed users' rights back to the forefront of communication and media policy debates. A rights-based approach to media and communication policy starts from a number of key assumptions. Following Thomas Humphreys Marshall,¹⁶ a rights-based approach assumes (1) the indivisibility of civil, political, and socio-economic rights, including communication rights; (2) active agency by those vulnerable to human rights violations; and (3) a powerful normative role of human rights in establishing accountability for protections and freedoms. In essence, it puts the communication rights of the citizen—rather than media—at the center of media and communication policy. Hannu Nieminen¹⁷ summarizes communication rights as the right to access (to information sources regardless of technology), availability (plurality and diversity of information content), competence (skills to use media critically), dialogue (media should promote democratic debate), as well as privacy and individual autonomy (decision on the use of private information). A rights-based approach to media policy-making, then, looks to create conditions in which these rights can thrive and be protected from infringement.

Not surprisingly, most of the attention has gone to digital media and their potential to enable and constrain democracy, as Claudia Padovani et al.¹⁸ point out in their overview of the use of communication rights in thinking about digital media:

This research looks at various positive and negative policy discourses regarding issues like access, connectivity, interaction, as well as privacy and protection of vulnerable individuals. Such an approach that draws on legally-recognized rights to reduce vulnerability “is appealing, because it offers everyone a legal basis for claiming, and in theory enforcing, their rights to have a range of fundamental needs met.”¹⁹

Such a communication rights approach focusing on social media is valuable and helps in providing a necessary correction to the predominantly, economically framed discussions about platforms.²⁰ However, we argue that a rights-based approach to media policy is useful beyond social media. As such, we follow Bart Cammaerts²¹ who advocates a focus on a rights-based approach as a “counter-hegemonic” paradigm against the dominant neoliberal approach to media policy resulting in the commodification of information, a trend pointed out by Robin Mansell,²² referring to Nicholas Garnham:

To this end, we subscribe to what Padovani et al.²³ identify as emerging policy discourses that revolve around “Traditional Media and Human Rights” and that emphasize the democratization of communication, including the right to communicate. Indeed, beyond the possibilities offered by social media for individuals and groups, there remains a need for a joint public sphere. In a rights-based approach, access to media organizations can help create conditions for citizens to participate in public life and in democracy by providing them diverse information. Given the many critical issues generated by the dominance of global platforms, mass media can and should be considered as vital in guaranteeing the rights highlighted by Nieminen,²⁴ including the right to access information sources, the right to availability of diverse and reliable journalistic and other types of content that allow citizens to participate in democracy and in social and cultural life as well as the rights to acquire media literacy competences and the right to privacy.

Via their news and entertainment products, media not only are content providers but, as Garnham²⁵ puts it, based on Sen's capabilities approach, can be “enablers” that help people to form a political opinion and to live their lives in a way they see fit. In this sense, a vibrant media landscape is an essential prerequisite for exercising communication rights. Not surprisingly, building on Garnham, scholars have started to emphasize the need to put citizens' perspectives front and center of media policy-making.²⁶ Given the above-discussed media crisis, we argue that, in a rights-based approach to media policy-making, public funding can be an important policy instrument to help safeguard such a vibrant media landscape. At the same time, we would emphasize that a communication rights perspective should promote not only the rights of citizens but of permanent residents in general.

Public Funding of Media

Many western democracies have a long tradition of PSM organizations that fulfil a program remit and that are at least partly publicly funded. Yet the changes of the media landscape due to digitization have left their mark. For one thing, PSM's role and legitimacy are under continued criticism. Their funding remains under constant scrutiny from other media players and conservative politicians and, increasingly, is interpreted as a means to support the commercial players in its media ecology—for example, by being forced to invest in the private production sector rather than to ensure a vibrant public sphere for citizen to exercise their communication rights.²⁷ Moreover, the traditional funding model of the license fee on the ownership of a radio or TV set quickly becomes outdated with changing media use. Various alternatives are discussed by researchers and policy-makers, among them a broadcasting fee payable by all households and organizations, an earmarked public service fee or tax as well as funding from the regular state budget.²⁸ In contrast, subscription models are usually rejected because of their lack of universality.²⁹ In several media systems these proposed alternatives have become reality, as will be shown. Looking at research interested in PSM funding, some studies focus on recent reforms of funding models in individual countries³⁰ or in a small number of countries.³¹ Other studies provide a comparative overview of the level and sources of funding,³² with the most recent one analyzing the remit and funding of PSM in 18 Western media systems.³³ Yet, even that study already is outdated due to the rapid change in media and media policy. Beyond these comparative overviews, some studies try to test the relationship between public funding and the amount of output that conforms to the basic ideals of a public service remit³⁴ or audience success.³⁵ However, a more recent comparative overview of new PSM funding is sorely missing.

Institutionalizing and funding a PSM organization is not the only option for media policy to support the production of media content. Private media organizations can be supported as well. Scholars usually distinguish direct and indirect as well as general and specific subsidies (see Figure 1).³⁶ While direct subsidies involve a payment to media organizations and indirect subsidies benefit media organizations by creating more favorable conditions for their operation (e.g., tax benefits), general subsidies are benefitting all industry members and specific subsidies support only media organizations that fulfil certain eligibility criteria.

Many media scholars argue that carefully calibrated media subsidies can help underwrite the production of quality content, make media systems more diverse, and facilitate the dissemination of news to wider audiences, all prerequisites to help ensure citizens' communication rights as identified by Nieminen.³⁷ However, media subsidies cannot always achieve their stated goals, especially if strong economic, technological, or other forces push in a different direction.³⁸ Yet, there is no doubt that they matter and can advance politically legitimized public interest goals. Studies about Scandinavia suggest that subsidies have ensured greater plurality in their newspaper sectors.³⁹ While subsidized media do not offer more thematic diversity or more extensive coverage of local politics than non-subsidized media, public funding allows them to survive at all and, thus, helps in maintaining news media in local markets or even competition in these markets across the country.⁴⁰ At the same time, subsidies of commercial media have been oriented more toward the survival of the industry than toward the enabling of the communication rights of citizens. They often benefit legacy media and, as such, can hinder market entry rather than encourage innovation.⁴¹ Thus, scholars also discuss how traditional press and broadcasting subsidies can be reformed to support online journalism and on-demand services, and whether a convergent approach to funding private media is necessary.⁴² Scholars voice additional concerns, especially the efficacy of subsidies and challenges to media freedom, calling for governance principles like setting up an independent body organizing the support measures and an automatic allocation of funds.⁴³

Scholars tend to apply the same narrow focus on the printed press when investigating subsidies. Few studies are dedicated to subsidies for private broadcasting or online media, let alone offer an integrated view on subsidies for all types of private media. In addition, most studies focus on single media systems.⁴⁴ There are a few notable exceptions taking a comparative perspective. For instance, Christina Holtz-Bacha investigates press subsidies in eight countries, distinguishing between “conservative” and “extensive” press subsidy systems⁴⁵; Peter Humphreys' seminal comparison of media policy in Western Europa reveals a heterogeneity of press subsidy regimes⁴⁶; and Paul Murschetz compared press subsidies in Austria, France, Norway, and Sweden, concluding that reforms are needed to deal with changing market conditions.⁴⁷ While all these studies have greatly added to our knowledge of subsidies, newer data painfully are missing. The most recent study by Matthias Künzler and colleagues offer an integrated view on media subsidies, covering the press, broadcasting and online media.⁴⁸ However, given the dynamics of media and media policy trying to deal with digitization, a lot has changed since the study was published.

To our knowledge, only Rasmus Kleis Nielsen's 2014 study takes a comprehensive approach to public funding and encompasses both PSM funding and media subsidies.⁴⁹ The author comes to the conclusion that public funding has “remained largely frozen”⁵⁰ in its late twentieth-century form in most Western countries, arguing that the combination of media change and policy inaction erodes its effectiveness. Importantly, Nielsen's interview data suggested a number of reasons for this lack of change that transcend country-specific policies and processes that have been confirmed by other studies. He identifies, first, “effective lobbying by incumbent industries trying to protect their interests and fearful that any reform will be at their expense,”⁵¹ something confirmed by various case studies.⁵² Nielsen further finds a relatively limited high-level political attention to the policy challenges associated with current changes in the media industries. This, too, has been confirmed by other studies⁵³ showing how, all too often, policy-making is based on short-term economic considerations and political feasibility rather than more mature, long-term views on the role of media in society.

Several years have passed since Nielsen's study. This begs the question of whether media policy has been “unfrozen” to deal with the effects of digitization for media and democracy or whether it remains in the same state as before. With our study, we would thus like to address this research gap. We ask which forms of public funding currently exist in small democratic-corporatist European media systems and whether these funding models live up to the spirit of a rights-based perspective.

Methods and Propositions

This study is based in a so-called simple comparison of both the funding of PSM and the subsidies to private media, allowing for systematic analysis of similarities and differences between media systems.⁵⁴ The comparison includes a number of relatively similar democratic-corporatist small states in Western Europe, namely Austria, the Flemish and the French communities of Belgium, Denmark, Finland, Norway, Sweden, and Switzerland. These media systems share important characteristics: On the one hand, the state plays an active role in media policy, which includes relatively strong PSM and support mechanisms. At the same time, high levels of media freedom are maintained.⁵⁵ On the other hand, small media systems are characterized by a shortage of resources as well as small audience and advertising markets limiting media production. This situation is argued to influence media policy.⁵⁶ Nevertheless, the selected cases offer some important variation: First, some of the selected media systems—namely Austria, the French Community of Belgium and Switzerland—are confronted with giant next-door neighbors sharing the same language, which leads to fierce competition on audience and advertising markets.⁵⁷ Second, the Nordic countries have developed a particular model of a media welfare state that shapes their media policy (universally available communication systems; institutionalized editorial freedom; extensive cultural policy for the media; consensual policy-making and compromises between key stakeholders).⁵⁸ Third, Belgium and Switzerland are multilingual countries, a fact that influences media policy as well.⁵⁹

Previous research suggests that the license fee as the traditional way of PSM funding has passed its expiration date due to digitization.⁶⁰ Thus, we expect, first, that, while preserving PSM, the license fee has been replaced with new forms of funding that are no longer dependent on the ownership of a radio or TV set. Given the similarity of the analyzed media systems, we further expect that similar alternative funding mechanisms have been implemented. Existing studies also suggest that media subsidies are often oriented toward the survival of legacy media, which have been successful in lobbying to protect their short-term interests at the expense of new market entrants.⁶¹ Hence, we propose, second, that subsidies for private media mainly benefit legacy media. While we expect that subsidies today are also available for online journalism, we assume that they have been designed to mostly help traditional newspaper companies (support for both their print and online operations) but not to invigorate media diversity and provide aid for start-ups and independent online media outlets. In light of the on-going media crisis, we also expect that subsidies have been implemented across the analyzed media systems.

The comparison was based on a qualitative content analysis of documents. All relevant documents referring to media subsidies and PSM funding—including legal documents (e.g., acts, decrees, licenses, and agreements between governments and media organizations), as well as explanatory notes that accompany them, policy documents, reports, and secondary literature⁶²—were collected.⁶³ Next, for data analysis, the documents were coded systematically, using deductively developed categories (see Table 1).⁶⁴ Regarding PSM funding, categories were developed based on previous studies that address the funding model currently in place (form of public funding; permissibility of advertising revenues), key figures of PSM funding (total revenues; public revenues; share of public funding; level of fee/tax per household/person) and the regulation of funding (decision-making procedure on level of funding).⁶⁵ With respect to subsidies for private media, categories reflect the differentiation into direct/indirect subsidies⁶⁶ and cover existing support measures (text-, audio-, and video-based media), level of support, source of funding, as well as the process of allocating the money (e.g., eligibility criteria; decision-making body).

To check the reliability and validity of our results and to take into account the most recent developments, experts from the individual media systems were approached to provide feedback.⁶⁷ Subsequently, results were interpreted from a communication rights' perspective⁶⁸ to see to what extent the public funding in place helps to protect or further them.

Results

Funding of PSM

Internationally, the most dominant PSM funding model is a mix of public and commercial revenues.⁶⁹ The analyzed media systems are somewhat different in this regard: In the Nordic countries PSM is not allowed to air advertising at all, whereas in the Flemish Community of Belgium it is only allowed on radio (but sponsoring is allowed on TV), and in Switzerland only on TV (see Table 2). Where advertising is permitted, PSM organizations have to adhere to stricter regulation than commercial broadcasters.

With respect to the form of public funding, the traditional license fee on the ownership of a radio or TV set has slowly but steadily become the exception in the analyzed media systems (see Table 2). While the Flemish Community of Belgium replaced the license fee by a direct allocation from the state budget as early as 2002, recent years brought about a transition to new funding models in other media systems as well.

• In 2013, Finland replaced the license fee with a special public service tax (“Yle tax”) to be paid by all adults and organizations. Individuals' tax amounts to 2.5% of their taxable income (up to EUR 163); organizations' tax depends on their turnover (up to EUR 3,000). The revenues are paid into an earmarked fund exclusively dedicated to funding PSM.

• Sweden followed suit in 2019. Adults have to pay a public service fee that amounts to 1% of their taxable income (up to SEK 1,300, approx. EUR 123). In contrast to Finland, organizations are exempt from the new funding model. Revenues are paid into an earmarked account that only serves the funding of PSM.

• Denmark chose a different path. From 2019 to 2023 the license fee (2018: DKK 2,527, approx. EUR 339) will gradually be phased out and replaced with direct funding from the state budget. At the same time, the funding of the main PSM organization DR is cut by 20%.

• Norway recently decided to abandon the license fee (2019: NOK 3,038.56, approx. EUR 308) and from 2020 funds PSM from the state budget.

• The French Community of Belgium replaced the license fee (previously EUR 100) with funding from the state budget starting in 2018.

• Switzerland transformed the license fee into a new broadcasting fee in 2019. With the new funding model all households (CHF 365; approx. EUR 328) and organizations (amount dependent on turnover) are required to pay the fee, irrespective of whether they can receive radio or TV.

• Austria is the only analyzed media system to still have a license fee in place. Both households (2019: depending on the Bundesland between EUR 251.16 and EUR 320.76, of which EUR 206.52 is for the PSM organization ORF) and organizations are obliged to pay.

Interestingly, the similar, small media systems analyzed here vary considerably in revenues of PSM organizations (see Table 3). This can be explained, at least in part, by price levels, population size, and multilingualism. For instance, the Swiss public broadcaster SRG has to produce an equivalent offer in three languages (plus, as several of these organizations, programs in a minority language). Regardless, total revenues are significantly lower than in large media systems like France, Germany, or the UK.⁷⁰ The share of public revenues varies as well, with PSM organizations that are allowed to air advertising receiving between 60% and 75% of their revenues from public sources (see Table 3 and Figure 2).

With regards to the evolution of PSM funding over the last ten years, the level of public funding has increased in all the analyzed media systems but the Flemish Community of Belgium, where a right-wing government cut its funding for VRT from roughly EUR 300 million to EUR 270 million (nominal value). While the increases in many media systems look impressive at first, nominal values do not account for inflation. For instance, in Norway the nominal increase of public funding is 39.4%, yet, prices increased by 23.2% over the same time period, leading to a real increase of 13.2%. Similarly, in Austria the nominal increase is 26.4%, prices increased by 18.4%, reducing the real increase to 6.8%.⁷¹ In any case, with the exception of Flanders (and more recently Denmark with announced cuts of 20% to DR's funding), PSM organizations can still rely on stable public funding in exchange for fulfilling a program remit (see Table 4).

To assess the level of public revenues, it is helpful to relate public funding to the gross domestic product (see Figure 3) and the population (see Figure 4). From this perspective, Belgium spends least on PSM organizations.

Decisions about public funding are mostly the responsibility of government or parliament. In Finland, Norway, and Sweden, parliament is responsible whereas in Switzerland it is the task of government. In the Flemish and French communities of Belgium, funding is set in a management contract between government and VRT or RTBF, respectively, in Denmark in a contract between the minister of culture and DR. In Austria, the Foundation Board of ORF—consisting of members appointed partly by the government and the “Bundesländer”—decides on the part of the license fee reserved for ORF. Moreover, in the Belgian communities, Denmark, and Finland, the amount of the state allocation and the media tax, respectively, are indexed to reflect general inflation, in Norway and Sweden the amount of funding is set for several years in advance.

Direct Subsidies

In all the analyzed media systems, private media organizations are supported by direct measures that are mostly selective in nature. The comparison shows a wide variety of support measures that benefit different forms of media (see Table 5). Looking across the media systems under study, it appears that support can relate to the operation of media organizations (production support), individual projects (e.g., single TV shows, investigative reporting, or innovation) or the distribution of media content. With respect to the level of support, most direct subsidies are financially modest, especially when compared to PSM funding or to the benefits generated by indirect subsidies like tax benefits. As with other public spending, the amount of funding is decided by government and/or parliament.⁷² Regarding the source of funding, the support measures are mostly funded from the regular state budget. However, there are a few exceptions: In Austria the project support for radio and TV productions and in Switzerland the production support for local/regional radio and TV stations is funded from the same source as the PSM organizations (license fee in Austria and broadcasting fee in Switzerland). In Denmark, this was the case as well. Given the current phasing out of the license fee, the TV2 regional stations, local noncommercial broadcasters, and independent TV productions will be funded completely from the state budget in the future. In the Flemish Community of Belgium, distribution companies have to contribute to the funding of local television, in the French Community of Belgium the support measures for radio are funded by radio stations themselves based on their turnover. In Sweden, in the past, the press subsidies were partly funded by a tax on advertising in newspapers.

Production and project support are the two most common forms of media subsidies. Some kind of selective production support that allocates money to media organizations for their operation exists in all the analyzed media systems (see Table 6). With respect to the press, Austria and the French Community of Belgium subsidize the production of printed newspapers, whereas in Denmark, Finland (only newspapers in minority languages), Norway, and Sweden today not only print media but also text-based online media qualify for support. In Denmark, independent online-only players qualify for additional production support.

While less known, most analyzed media systems also support private broadcasting. Mostly local or regional radio and TV stations receive financial support for their operation or the fulfilment of a program remit. Regional TV stations are supported in the Flemish and French communities of Belgium, Denmark (including their online offer), and Switzerland, regional radio stations in Switzerland and noncommercial local stations in the French Community of Belgium, Denmark, and Switzerland. More recently, Finland (only 2017–2019) and Norway started to support programs on a national commercial TV station.

A convergent production support covering all types of private media is still the exception and exists only in Sweden. While there were plans to replace the traditional production support for the press with such a new convergent system, the implemented reform was less far reaching. In the end, the existing support system was kept in place and complemented with a modestly funded convergent production support for local journalism. Up to three media organizations per region can receive support, irrespective of type (text, audio, video), form of distribution (online or offline), or business model (paid and free media).

Aside from production aid for the operation of a media organizations specific projects can be supported (see Table 7). First, some measures aim at supporting single media productions, mostly in radio and TV: In Austria, commercial and noncommercial radio and TV stations as well as independent production companies can apply for the funding of single productions; in the French Community of Belgium, support is available for radio works; the Flemish Community of Belgium and Denmark supports independent TV productions both in traditional TV and online; Norway subsidies local audio and video production projects; and in the Flemish and French Communities of Belgium, investigative reporting projects can apply for funding. Second, project aid can aim at supporting innovation. For instance, the formation and reorganization of text-based media is supported in Denmark or innovation with respect to editorial content as well as its production, distribution, and consumption in Norway and Sweden. For a limited time (2015–2018) Finland also supported innovation projects in the media sector.

Moreover, distribution support for printed newspapers still exists in Austria and Sweden. In Denmark and Finland, periodicals can benefit from subsidies as well; in Norway, distribution is supported in the remote Finnmark region. Regarding broadcasting, Austria, the French Community of Belgium, Norway, and Switzerland support the digitization of radio distribution; the French Community of Belgium also supports the distribution, promotion, and commercial exploitation of radio broadcasts.

A main question when dealing with subsidies is the process of allocation. While support for newspapers and text-based online media is usually bound to predefined eligibility criteria, support for broadcasting is often linked to the fulfilment of a program remit. Local or regional stations in the Flemish and French Communities of Belgium (TV), Denmark (TV2 regional stations), and Switzerland (radio and TV) as well as national commercial channels in Finland and Norway are financially compensated for the production of specific programs (e.g., local news).

In contrast to a program remit, eligibility criteria restrict the discretionary power of the decision-making body: Media organizations that meet the previously established criteria receive the subsidy automatically, which is thought to prevent political influence. Eligibility criteria can refer to the editorial output, the media organization as well as its market position and economic situation (see Table 8).

Decisions on the allocation of subsidies are the task of the existing media regulator or a specialized committee for most support measures in Austria, Denmark, Norway, and Sweden, whereas subsidies are allocated by government in the Flemish and French communities of Belgium, Finland, and Switzerland. The selection of investigative projects for funding in Belgium is the task of an independent jury (see Table 9).

Indirect Subsidies

Indirect support measures exist in all the analyzed media systems and usually take the form of general subsidies (see Table 10). First of all, newspaper publishers benefit from substantial tax benefits: The printed press and more recently also the electronic press is either completely exempt from the value-added tax (VAT) or profit from a reduced VAT rate on sales. Second, in some media systems the distribution of newspapers is indirectly supported. For instance, in Belgium and Switzerland, the indirect-selective measure of preferential postal rates for newspapers exists. Third, other ways to indirectly support the media sector include subsidies for news agencies, journalism schools, or press councils. And while not qualifying as an official support measure, in Austria the press receives a high number of advertising orders from public bodies (EUR 171.5 million in 2018). As for the level of support, tax benefits and distribution support are the most significant forms of indirect aid. As is the case with other tax benefits and public spending in general, deciding on the level of support is the task of government and/or parliament.

As with direct subsidies, the regular state budget is usually the source of funding. Only the subsidy for the Austrian press council is funded by license fee revenues.

With respect to the process of allocation, tax breaks do not necessitate an allocation decision. Yet, other indirect support measures do. As with direct-selective support measures, the indirect-selective postal rate reduction that exists in Belgium and Switzerland makes it necessary to define eligibility criteria. In Belgium, only newspapers that are published at least five times a week, with general interest content, a minimum of 30% of editorial content, and at least three advertising customers are eligible for support. De facto, this excludes online-only news media from receiving these benefits, disturbing the level playing field. In Switzerland, newspapers need to be published at least once a week, consist of at least 50% editorial content, charge a price, and fulfil minimum (1,000 copies) and maximum (40,000 copies; 100,000 for cooperating newspapers) circulation numbers.

While in Austria and Norway, the media regulator (supported by advisory bodies) is taking the decisions on the allocation of funding; in all other media systems, this is the prerogative of government. However, the allocation of reduced postal rates in Belgium is decided by the service provider itself, the Belgian Post. For a long time, this has been the case in Switzerland as well. Today, the decision is taken by the government.

Discussion and Conclusion

In this article, we set out to investigate which forms of public funding exist in small democratic-corporatist European media systems in order to find out whether subsidies have been “unfrozen” from their late twentieth-century form to better ensure the democratic demands in the contemporary media ecosystem. Moreover, we ask whether these funding models live up to the spirit of a rights-based perspective. To be clear, a trend toward becoming “unfrozen” does not mean the removal of public funding, as a free-market paradigm might suggest. Rather, unfrozen refers to a reinterpretation of existing public funding that recognizes changing media structures in order to make sure media policy remains effective and to prevent policy drift.

Starting with PSM, results of the comparative analysis show one important difference between the Nordic countries on the one hand and Austria, the Flemish and French communities of Belgium and Switzerland on the other. While advertising is prohibited in the former, PSM are funded from a mix of public and commercial revenues in the latter. However, there are no patterns with respect to the form of public funding, the level of funding and its determination. And while the results—as proposed—confirm that the traditional license fee has been replaced with new forms of funding, our assumption that similar alternative funding models have been implemented is clearly not supported: The two analyzed Belgian communities, Denmark and Norway have switched to funding from the state budget, Finland and Sweden introduced an earmarked fee or tax, Switzerland changed to a broadcasting fee, and only Austria still has a license fee in place. The varying developments in the Nordic countries are surprising, especially the decision to fund PSM from the state budget in Denmark and Norway, as they present a departure from both the former path of media policy and a uniform Nordic approach. It is an open question whether this could be explained by isomorphism in times of uncertainty or right-wing governments trying to expand their influence on PSM.

Looking at subsidies for private media, results show three clear patterns. First, VAT reductions or exemptions for printed and electronic newspapers benefit press companies significantly in all the analyzed countries. Second, text-based media and broadcasting are handled differently across all analyzed media systems. While subsidies for text-based media are funded from the state budget, subsidies for private broadcasters mirror the public funding model of PSM. Moreover, for text-based media, eligibility criteria have been defined to determine which media qualify for subsidies, whereas subsidies for broadcasters usually come with a remit attached. Third, only the Nordic countries have extended their production subsidies for newspapers to include text-based online media as well.⁷³ In contrast, in Austria and the French Community of Belgium subsidies benefit print publications only.⁷⁴ Although we proposed that subsidies mainly benefit legacy media, this does not seem to be the case in Scandinavia. In addition to extending their existing production support to text-based online media, a convergent production subsidy benefitting all types of media was introduced in Sweden and innovation projects are eligible for funding in Denmark, Norway, and Sweden. Further, we also expected that direct subsidies for online journalism would have been implemented across the analyzed media systems due to the on-going media crisis. This is not yet the case in Austria, the Flemish and French communities of Belgium or Switzerland. Yet the Swiss government recently proposed to introduce a direct-selective aid for online journalism. While the Austrian government announced plans to increase its existing direct aid for newspapers by introducing a new advertising tax for platforms, no subsidies are in sight for online media. Moreover, the Flemish government just decided to abolish the project funding for innovative journalism only introduced in 2018.

Our results show that, indeed, public funding and especially media subsidies recently have moved on somewhat from their resilient late twentieth- century form.⁷⁵ While PSM funding has remained steady or increased (at least) nominally in all but one case (Flemish Community of Belgium), both the funding model and the remit have been modernized to reflect changes in media use. Moreover, subsidies are available to online journalism in several of the analyzed media systems. At the same time, different regulatory approaches to PSM and private media remain in place. Moreover, subsidy models in most media systems are not convergent in the sense of encompassing text, audio, and video both online and offline but, instead, retain a differentiation between text-based and audio/video media, based in traditional models of media regulation. Does this mean that public funding has been unfrozen and, if so, does unfrozen, by definition, constitute an improvement? To continue with the ecological analogy: can public funding policies be unfrozen to a point that amounts to the melting of the ice caps with detrimental effects on the entire media ecosystem?

To make these evaluations, we return to our core argument that funding models should further communication rights like the right to access, availability, competence, dialogue, and privacy/autonomy.⁷⁶ Equal access for citizens to information sources regardless of the mode of delivery should not be seen as restricted to questions of technology or distribution. In our view, this implies a convergent approach to public funding as well. On the one hand, subsidies for private media should be technology-neutral. First steps have been made with traditional subsidies being extended to the online world. Yet, so far, a truly convergent subsidy system has only been introduced in Sweden. On the other hand, we argue for a central role of PSM in realizing citizens' right of access, which requires that PSM is allowed to fulfil its remit in new ways and to produce its content for online use that, moreover, is not limited to audio-visual only, as some remits stipulate in response to lobby work from print media. Availability refers to a plurality and diversity of content that provides factual information, orientation, and cohesion. Given the earlier-discussed media crisis, public funding can play a vital role in safeguarding the provision of journalism at the local and the national levels and in maintaining a diverse media landscape. As a key “enabler,”⁷⁷ that is, an institution that helps people form a political opinion and live their lives in a way they see fit, removing public funding from PSM would amount to letting the ice caps melt. A vibrant and securely funded PSM has an important role to play in providing internal pluralism and domestic audio-visual production. Moreover, subsidies are typically argued to aim at strengthening media diversity by helping smaller media organizations to survive. As we have seen, through production support for online journalism and smaller newspapers as well as innovation support, the Scandinavian countries come closest to this idea. Yet in too many countries, subsidies are aimed primarily at the survival of legacy media in highly concentrated markets without promoting external pluralism or market entry by start-ups, nor stipulating journalistic standards (e.g., observance of journalism ethics) as a prerequisite to receive funding. The competence to use media critically according to a person's own expectations can be fostered by several actors, not least educational institutions, platforms, media, and telecommunication providers. While a marginal topic for this article, in some media systems, media literacy programs receive support as part of indirect subsidies. The promotion of a public debate that allows for dialogue certainly is a key function of media and an important part of citizens' communication rights. Media play an important role in facilitating dialogue between various societal groups. For democratic societies to work, it is necessary to recognize and understand dissenting opinions, even if we do not share them. However, due to media freedom, policy options are more restricted in this regard. While PSM have a remit to safeguard internal pluralism and make different voices heard (and receive public funding to fulfil their remit) and private broadcasters, at least in Europe, have to provide balanced coverage, private print and online media are free to hold partisan views. In none of the analyzed media systems, the eligibility criteria for subsidies prescribe any conditions relating to content, which goes a long way toward facilitating an automatic allocation of subsidies and, thus, safeguarding media freedom. However, subsidies that support partisan media in monopolistic markets would seem to conflict with a right to dialogue. Subsidies should instead support secondary players and facilitate market entry; moreover, support should be made available irrespective of type of content (text, audio, video) or form of distribution (online or offline). Yet, dialogue also refers to interaction with citizens. Whereas dialogue between media and citizens is less central when discussing public funding, citizen involvement in media policy certainly is. In none of the analyzed media systems did we find evidence that citizens are involved in decisions about media subsidies. With respect to PSM funding, citizen involvement is more pronounced as some governments probe the views of citizens in this regard⁷⁸ and many PSM try to incorporate citizens in some way but, too often, this is not a major requirement in management contracts between the PSM organizations and governments.⁷⁹ Moreover, in Switzerland citizens had the opportunity to participate in two popular votes on PSM funding.⁸⁰ We furthermore argue that some forms of public funding are more in tune with a citizen perspective. Whereas a license fee, broadcasting fee, or earmarked media tax reminds citizens of their democratic responsibilities and creates a more “personal relationship” with the PSM institution, funding from the state budget removes the direct connection between collective funding and PSM. Finally, privacy and individual autonomy refers to the right to decide how personal information is used. While PSM are regularly reminded of higher standards of data protection,⁸¹ the topic is absent in discussions about media subsidies.

In conclusion, it appears as if the current models of public funding do not completely live up to the requirements of a rights-based approach to media policy. While public funding plays an essential role for maintaining a universally available PSM providing internal pluralism and domestic production as well as for helping private media survive in times of crisis, subsidies too often show a fixation on keeping legacy media in highly concentrated markets alive instead of fostering diversity and market entry. Clearly, private media organizations with a proven track record of professional journalistic performance in line with democratic values should continue to be eligible for public funding. Yet, media policy should not be concerned with funding the survival of particular technologies, media organizations or industries but should ensure the production of journalism and media's role as enablers of communication rights. In our view, this means, first, to allow an independent and securely funded PSM to fulfil its remit in a technology neutral fashion, that is, not just with linear broadcasting but also online. While being required to fulfil a clearly defined remit that puts an emphasis on pluralism, diversity, and dialogue, PSM must be allowed to develop into a personalized on-demand service that pays particular attention to issues of privacy and citizens' autonomy in that regard. Moreover, to strengthen citizen's responsibility, autonomy, and voice, PSM should not be funded from the regular state budget, should contribute to media literacy by covering developments in the media sector, and should incorporate citizens in decision-making. Second, we would argue that a convergent subsidy system is most compatible with communication rights. Instead of guaranteeing an industry's survival, media policy should put the public interest first, rather than exclusively support legacy media, in order to facilitate the market entry and survival of new players, such as online-only news media, that help further content diversity and a plurality of voices and, thus, democratic debate. Such a convergent production support would allow for new outlets to establish themselves and, potentially, for more innovative forms of engagement and interaction with citizens than most legacy media currently provide. At the same time systems of distribution support could be adapted to the digital world by helping fund technical infrastructure. Finally, eligibility criteria for subsidies, too, should foster communication rights of citizens. For instance, subsidized media organizations—both legacy media and new journalistic ventures—should be obligated to abide by a self-regulatory press council, protect their users' privacy and contribute to media literacy.

As Nielsen showed, frozen public funding mechanisms are subject to policy drift.⁸² Reforms of media policy are, thus, necessary to keep PSM funding and subsidies effective with regard to the democratic role of the media and the realization of citizens' communication rights. Our results show that the public funding of media is indeed thawing but it is not yet the end of the ice age of legacy media support. In our view, modernizing the funding and remit of PSM organizations and introducing convergent subsidy systems are important steps in strengthening a rights-based perspective on media policy. Nevertheless, public funding remains contested both in media policy and in scholarly debates. Critics worry that public funding might lead to an infringement of media freedom and contravenes the values of liberal market systems.⁸³ With regard to the first point, the actual institutionalization of funding models is obviously the key. Our empirical analysis shows that in many media systems a body at arm's length from government (e.g., an existing media regulator or a specialized committee) is responsible for allocating subsidies, often with little discretion. As for the conflict between a minimalist and a more interventionist approach to media policy, we would argue that—given the positive externalities of journalism—there are good reasons for public funding even from an economic perspective. Moreover, living up to the democratic role of media and contributing to the realization of communication rights make it necessary to consider not only arguments of neo-classical economics.

Acknowledgments

This article is based on two research projects supported by the Government of the Principality of Liechtenstein and the Swiss Federal Office of Communications (OFCOM). We would also like to thank the experts from the individual media systems for their support and the anonymous reviewers for their helpful comments.

Footnotes

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