Can Europe Rescue Media Biz, and If So, Can the U.S. Do It, Too?

Governments in Paris, Berlin Give Away Papers to Teens, Retrain Journos

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NEW YORK (AdAge.com) -- New government policies that could help news organizations will be on the agenda this week when the Federal Trade Commission convenes public meetings on journalism and the internet.

Participants are slated to discuss, among other things, proposals for new tax treatments for news organizations, changes in copyright law and doctrine, new antitrust exemptions and more public support for public affairs news.

Even so, it's behind Europe in its efforts to save the media business from digital disruption. Some governments there, particularly in Paris and Berlin, are aiming to shore up young people's interest in newspapers, support retraining for traditional journalists and give newspapers better leverage with aggregators and search engines.

Many such measures are less likely to fly in the U.S., of course, because of the resistance to government influence over the media. But it will be interesting to see whether Europe turns up any approaches that can smooth the wild transition to a new business model.

"They are concerned, as we are in the U.S., how an industry that has played an important role in democratic processes is going to be able to continue that in the future," said Robert G. Picard, director of the Media Management and Transformation Centre at Jönköping International Business School in Sweden. "But the adversarial relationship between the public and the government is much lower in Europe than in the U.S., so there's much more willingness to have government play a role."

The French government is pursuing an $899 million aid package for newspapers, including allotting money to help send 18-year-olds a free newspaper once a week for a year. "I don't understand how anyone could doubt the legitimacy of the state in this process," French President Nicolas Sarkozy said in January when he announced the plan.

The package also promised negotiations with printing unions to lower costs; more government ad spending with newspapers, both in print and online; and support for new-media training involving unions and universities. But the plan to help get newspapers in young people's hands got the most attention.

"I was surprised when they decided to subsidize readers and not the companies," said Mr. Picard, who worked with the French government on its aid package. "It's a really interesting opportunity to watch. Nobody's done this before in a significant way."

According to the French government, by the end of October, when it officially introduced the "My Free Newspaper" program, 30,000 young people had already signed up to receive papers during a pre-registration period.

Many observers criticized the program, arguing that improving the papers' content would do more to win readers. Others were more supportive, despite their own questions. "Everything has to be tested, and we have to be humble," said Dominique Delport, CEO of Havas Media France.

In Germany, politicians have been talking with publishers about revising copyright law so newspapers have more leverage with aggregators and search engines. Chancellor Angela Merkel's governing coalition has proposed rights for publishers akin to those already covering music and movie publishers, perhaps requiring a license for any commercial use of publishers' content on the web. "The internet cannot be a copyright-free zone," the coalition said in October.

"Newspapers in Germany are looking at a 30% revenue loss, and they don't like seeing Google making money from their own hard work," said Gunnar Brune, managing director of Lowe Deutschland. One problem is that any such process would take a long time to reach fruition. Another is the likely need for such regulations to cover Europe, not just one country in Europe.

And then, too, copyright law affects many parties, including authors, editors, commercial users and consumers. "The copyright laws are very impactful, and if you change them for this specific problem, you might solve this one, but you'd get a bigger problem," Mr. Brune said.

Others are forging their own approaches. A Dutch press commission is beginning its work this month. Earlier this year Dutch media minister Ronald Plasterk said the government would spend $6 million to pay salaries for 60 young journalists at newspapers across the Netherlands.

How much help these efforts will deliver, of course, remains unclear. "It certainly seems the governments are fighting an uphill battle," said Anita Elberse, associate professor of business administration in the marketing unit at Harvard Business School. "To have a diverse media landscape in which different voices can be heard is obviously important to any democracy, but I wonder whether these actions will be effective. We have little evidence to go on here."

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