Government support packages aren’t a long-term media solution

By Dr. Merja Myllylahti

Auckland University of Technology (AUT)

Auckland, New Zealand

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While stranded in Finland and waiting for any flights back to New Zealand, I have been following with the great interest how different countries and governments support their media outlets during the COVID-19 pandemic. To say the virus has catapulted news publishing into crisis is the understatement of the year.

In countries such as New Zealand, the pandemic has accelerated the restructuring of media. For example, in April, the country’s largest magazine publisher Bauer Media closed its doors with substantial job losses. In Australia, BuzzFeed recently pulled out of the market, and reportedly 157 other newsrooms have been closed temporarily or for good.

The picture is anything but pretty.

Therefore, it is not surprising governments have announced support packages for media, and in some countries, media outlets are supported by millions of dollars. Four countries — New Zealand, Australia, Canada, and Denmark — announced media support packages amounting roughly to US$100 million.

These government support packages include relief in transmission fees for broadcasting firms, tax rebates, increases in advertising spend in legacy media, and buying digital and print subscriptions in news media. In New Zealand, the government is spending over one million dollars to purchase news media subscriptions. Digiday reports that, in the United Kingdom, the government has become one of the biggest advertising spenders in newspapers.

While the governmental coronavirus-related support is welcomed by many media outlets, they are hardly a long-term solution for news companies’ financial crisis; they are simply rapid responses to cashflow problems. As The New York Times points out, many “experts and publishers say the advertising campaign is a welcome influx of revenue, [but] few expect it to save the industry.”

Rasmus Kleis Nielsen also points out the dangers with governmental support for media, and the same applies to support coming from platforms. “We know that what platforms give, they can take away. That shouldn’t make us forget that what politicians give, they can take away.”

And that kind of summarises the problem with any governmental outside relief for the media at this point: It is temporary fix.

Banner image eourtesy of tookapic from Pixabay.

About Dr. Merja Myllylahti

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