Last spring, pictures from Bergamo and Wuhan went viral. Everyone wanted to know everything about the unknown virus. Yet the Covid-19 pandemic hit the media industry hard. In April 2020 alone, it recorded a 43 percent year-on-year slump in advertising sales. Unsurprisingly, media companies took advantage of the general, industry-neutral support offered, such as liquidity loans and short-time working subsidies. This notwithstanding, in 2020 the Swiss parliament decided on even further-reaching subventions in three sub-areas: CHF 30 million in one off grants to radio and TV broadcasters, CHF 10 million for online media’s subscription fees to the Keystone SDA news service, and CHF 20.4 million via indirect subsidies to the print press.
Some industries are more alike than others
Against the 2020 Covid 19 budget of around CHF 31 billion, such sums are a drop in the ocean. But that makes them no less problematic. Such spending cannot stand up to critical analysis – exemplified by the support for the print media:
- First, not all print media are entitled to funding. Only subscription-based daily and weekly newspapers are eligible; commuter newspapers are left empty-handed.
- Secondly, indirect press subsidies only support daily delivery by the Swiss Post. This puts individual subscription newspapers at a disadvantage, because Sunday and early morning deliveries are provided by private logistics companies.
- Thirdly, funding eligibility was granted based on arbitrary criteria. The delivery costs of titles with a circulation of 40,000 copies or less are covered in full, while titles with a circulation of more than 40,000 receive a CHF 0.27 per delivery.
- Fourth, the support has a structure-preserving effect. Media houses with a strong online presence and no Keystone SDA subscription will completely fall through the cracks.
Basic rules for neutral support
The additional aid provided for the media has a strongly distorting effect, as it favors specific market participants and forms of distribution. This contrasts with general measures such as short-time working or liquidity loans that help all media companies equally, regardless of circulation or distribution channel. Such competition- and technology-neutral measures are preferable both y in normal times and in crises. Industry-specific support must be consistently avoided.