There are already numerous voices all throughout Europe expressing their doubts about the state aid regime applied to the print media, in France or anywhere else in Europe, as an effective measure to ‘save’ this industry.

Following these thoughts and related debate, we would like to propose an article by Eric Leser published in the current affairs online magazine “Slate.fr” last February 20th, 2013, on this topic. Below you can find a translation of this article into English:

 

State aid for print media: The steel industry syndrome

It isn’t by slowing down the destructive process of an already doomed model that we will prevent its disappearance. On the contrary, if the press does not wish to be transformed into molten iron, then it must reinvent itself.

Of what purpose are the millions of Euros spent by the state to support the print media? They are of no, or little purpose. In substance, this is the conclusion reached by the French Court of Auditors in their report on the diverse and varied public funds allocated to the print media, which was published on February 12th.

The document is entitled: “Une occasion de réforme manquée” (A missed opportunity for reform). It nearly went unnoticed. The media in France have firmly-rooted corporatist reflexes. Print media is suffering, and it is kept alive by billions of Euros worth of public money, but this is best kept quiet, especially at a time when the state is desperately trying to cut spending.

It goes without saying that we are strictly forbidden to touch the 5 billion Euros distributed between 2009 and 2011, according to an estimate made by The Court of Auditors.

«Dictated by urgency, this plan did not obtain the desired effects, neither did it help to correct the weaknesses of press aid politics, characterised by a ‘one-stop system’» wrote the court.

For each copy published, state aid amounts to 48 centimes for L’Humanité, 29 centimes for Télérama or Le Nouvel Observateur, 27 centimes for Libération, 23 centimes for L’Express, 19 centimes for Le Monde, 17 centimes for Le Figaro, 16 centimes for Les Echos and even 15 centimes for Elle and 10 centimes for Télé 7 jours! Before its collapse, France Soir had a record aid of 50 centimes per issue.

All this is without taking in to account the indirect aids, like for example Air France’s mass purchase of national newspapers. According to the OJD, in 2011, this represented 14% of Liberation sales, 12.5% of Echos sales, 11.7% of Le Monde and 10.2% of Le Figaro sales.

Costly and ineffective aids that have perverse effects

It is therefore not surprising that France’s print media receives the most support in Europe, despite being amongst the least distributed. Not only are these aids ineffective and a waste of taxpayers’ money, but they also have numerous perverse effects.

The Socialist Party Deputy Michel Françaix, who submitted a report in October 2012 on the media and the situation of the French press, summarised the situation by citing Antonio Gramsci:

The crisis consists precisely in the fact that the old is dying and the new cannot be born”.

He underlines that the media aids are more suited to the old model “irrespective of their purpose, relevance and viability”.

He adds: “Too busy trying to preserve the existing model, the sector is forgetting to innovate and to make necessary investments for the future”.

As with all technological breakthroughs and along with the explosion of digital media, the press is facing the Schumpeterian paradigm of creative destruction. However, by holding back through any means possible, the destructive process remains inevitable and, at the same time, we are slowing down the creative process.

It’s like the example of the French iron and steel industry where mistakes were made. Billions in public funds and nationalisations couldn’t prevent the collapse of a large segment of the French iron and steel industry. Through failure to rapidly adapt to a new reality, this prevented the emergence of powerful French industry leaders.

Distorted competition for the ‘pure players’

The current situation of ‘pure players’ or purely digital media organisations such as Slate, we know, illustrates the perverse effects of public support that the ‘old’ press benefits from.

The pure players have become recognised over recent years as rare innovators in French journalism. Even though they have become quite popular amongst young readers, they are still struggling with the precarious economic situation partly due to distorted competition as they do not have access to the hundreds of millions of Euros that are fed each year to their competitors.

As a result, at the end of 2011, France’s first pure player, Rue89, was forced to sell itself to the Le Nouvel Observateur and clearly the merging of two different cultures wasn’t easy.

Over the past two years, Mediapart has no longer been profitable and, to prevent further damage, has been committing tax fraud by self-assigning a very favourable VAT rate of 2.1% to print media (like Arrêt sur image or Indigo Publications). By law, digital media organisations must pay a VAT rate of 19.6%.

Slate is constantly battling in an advertising market that is resistant to change and new arrivals. For decades, it has been run by stakeholders who are uninterested in changing an inefficient system, but prefers to maintain a system that earns them a very good living.

Owni filed for bankruptcy at the end of last year.

Finally Atlantico, the last to arrive, have also been struggling to build their own model but are at least benefitting from financial support, being the only pure player who claims to be right-wing.

An artificial world

Print media in France lives in an artificial world cut off from economic and technological reality. Trying to obtain more and more financial aid to function has become normality. Recently, it managed to force Google, with the help of public authorities, to finance a modernisation fund that will cost Google over 60 million Euros.

The paradox is that the majority of the ‘big’ national newspapers belong to groups for whom they are a marginal activity. Dancers, influential instruments used by executives who make their profits in other industry sectors; weaponry, telecommunications, luxury, finance, toilet systems and, in turn, Le Figaro belongs to Serge Dassault, Le Monde to Xavier Niel (Free), Pierre Bergé and Matthieu Pigasse (Lazard), Les Echos to Bernard Arnault (LVMH), Libération to Edouard de Rothschild, Le Point to François Pinault, Le Nouvel Observateur to Claude Perdriel (SFA).

Print media is suffering all over the world. It is facing technological breakthroughs and the rapid rise of digital media, which are destroying its economic model, distancing itself from young readers. “All studies have shown that daily national newspapers are rejected by the under 25s” wrote Frédéric Filloux for Slate back in February 2009.

We can deplore the threats that weigh heavily on the future of emblematic and influential newspapers such as Le Monde or The New York Times. We can rightly ask ourselves how articles written by hundreds of journalists belonging to a professional culture with its own unique ‘savoir faire’ will survive, but we cannot dismiss this evolution. In the same way, conventional photography made way for the digital era, vinyl and CDs were replaced by MP3 and now, even the future of the paperback book is looking bleak.

Print media has no other choice but to attempt to reinvent itself. In France, this is failing to happen and huge financial public aids are doing it more harm than good. They are preventing print media from asking itself questions, and are encouraging it to stick to a doomed model.

Can we hope for a moment of clarity from the group in charge of financial aids for print media, run by the Minister of Culture and Communications, Aurélie Filippetti? Her track record is no cause for optimism, as it reminds us word for word of those of her predecessors… of which nothing positive came about.

 

The article in the original language (“Aides à la presse: le syndrome de la sidérurgie”) can be read here: http://www.slate.fr/story/68531/aides-presse

 

Article translated into English by Alexander Twist