Discouraging developments in the German news media market

The German print media is going through a rough phase, with many newspapers closing and journalists laid off as a result of declining revenus. This structural crisis is having a negative effect on the quality of public debate on essential issues, such as the EU.

Indira Dupuis
8 April 2013
Demotix/Hownbackphoto. All rights reserved.

Demotix/Hownbackphoto. All rights reserved.

The German media market has altered quite dramatically since reunification. Due to a high demand for information, and the existence of both West and East German media suppliers, newspapers reached their highest ever circulation in 1991. Since then, most of the East German media outlets have disappeared; the broadcasting system has been integrated into the West German structures, while the newspapers were sold to western media companies or closed down.

Along with this, print readership began to decline during the 1990s. In the last ten years, German newspapers have lost about six million subscriptions and street sales - not just in the east, but all over Germany. Today distribution sales are stable, but revenues are declining, mainly caused by a fall in the press' share of advertising revenues:

 Federation of the German Advertising Industry (ZAW)

Source: Federation of the German Advertising Industry (ZAW)

In 2011, the print media had a turnover of €8.5 billion, but their share of advertising dropped to third place on the market (19.5%), after online (23%) and TV advertising (21.8%). By 2015, it will probably have lost a further 1.5%, according to PricewaterhouseCoopers. Daily newspapers, however, still reach about 47 million readers per day, and the circulation of the print media’s e-papers is growing fast (by 50.4% to 227,669 issues sold in the third quarter of 2012). As a result, the current economic struggles of newspapers in Germany cannot be explained simply by structural changes which have hit the newspaper business all over Europe and overseas.

The growing economic pressure within the German print media market has led to increasing media concentration and has forced publishers to take drastic financial measures. In 2012, many notable newspapers, important within the realm of public political discourse, as well as the news agency DAPD, went bankrupt. Along with this, the German journalism market is facing the highest wave of lay-offs since 1945, according to the Federal Employment Agency.

One of these bankrupt newspapers, the Frankfurter Rundschau, is a traditional nation-wide newspaper with a strong political slant towards the Social Democratic Party. In the last decade, the FR has declined in prominence due to increased competition, the establishment of the Tageszeitung and a shrinking readership, but also due to a certain retro-style in addressing its public which did not engage any new readership (a problem not unique to FR).

This decline was fuelled by a constant cost-cutting policy, which included the merger of the editorial board with the staff of the Berliner Zeitung. In the ongoing insolvency proceedings the FR could be sold to a Turkish investor. Given the public outcry in Germany when the Pro7Sat1 media company was sold to foreign investor Haim Saban in 2006, one might expect similar opposition to the sale of the FR. Especially since in Germany the media, as an institution, is considered to be the one of the most important pillars of national democracy.

The Financial Times Deutschland has already ceased distribution. This business paper was launched by Andrew Gowers from its parent company Financial Times in 2000. This was during an economic boom for the German print market, just before it collapsed as a result of the first big bust in the German advertising market. With its Anglo-Saxon style of journalism, less biased and more fact orientated than its continental equivalents, it reformed the German quality newspaper market. However, the FTD was never financially successful and its owner, Gruner und Jahr, ended up losing €250 million during its twelve year run.

In 2010, Süddeutsche Zeitung published a series of articles under the headline, “Journalism – what for? Do we still need investigative journalism and professionals looking into stories? And, first and foremost, how can it be financed?”. Despite what is implied in this and other public discussions, I would follow Wolfgang Münchau’s theory that it is not the sophisticated, analytical and well informed journalism that is most at risk - this will survive like all valuable content; because of its scarcity as well as the publicity of renowned journalists along with the possibility for them to sell their knowledge through different channels: blogs, tribunes and on the payrolls of think-tanks and foundations.

It is actually that the business model of the average daily newspaper does not work anymore. Especially since publishers have decided to cut back on investment in their most valuable resource: their staff. Between 1993 and 2005, the number of full-time journalists decreased by one third according to a survey of media scientists from Hamburg University. Along with this, a growing number of freelancers live, not on journalism alone, but also on advertising and public relations. Furthermore, publishers’ budgets for the further education of journalists have been greatly reduced.

So what does all this mean for the German European Public Sphere? In Germany, news about the EU has never made up a large part of the news sector, but its importance was nonetheless well recognised. This might change during the current print media crisis.

Currently, regional newspapers in particular are cutting back expenditures for all political reporting. Due to this, printing space has also been reduced, which affects the reporting of more complex issues - issues which are important when put into the broader context of reporting more than the mere facts of the story. There are fewer options to specialise in a certain field and fewer chances to engage in investigative reporting which is, in many ways, the core of journalism.

As a result, EU reporting becomes less attractive for well-informed and educated people because of its lack of recognition and resources, as well as the existence of better job opportunities. The reporting of EU issues already relies highly on news agencies, press offices and EU media services. This fails to meet the needs of readers interested in EU affairs who nowadays already have access to all these resources. As the EU puts a lot of effort into information about policies, it becomes clear that the additional value of journalism is analysis, background information and explanation. Publishers have to acknowledge this as the basis for their business strategies.

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