Public Interest Journalism Startups in Europe: Trends, Players, Challenges and Incentives

Author: Attila Mong

Content map

1. Introduction

1.2 Definition and scope of the research

1.3 Methodology and research questions

2. Overview of the media startups scene

2.1 Broader trends shaping the European media startup scene

2.2 Key players, main challenges and adopted strategies

2.3 Resources and incentives for the growth of the media startup scene in Europe

3. Ideas for the promotion of media startups in Europe

3.1 EU planned policy responses

3.2 Recommendations from NGOs for potential policy responses

4. Conclusions

Annex: List of notable public interest journalism startups in Europe

1. Introduction

Over the past decade, public interest news media outlets have faced substantial setbacks due to economic crises, further worsened by the Covid-19 pandemic. News consumption habits have also fundamentally changed, shifting towards online news consumption, driven by technological innovations, including smartphone usage and mobile internet access. Audiences, especially younger demographics show a preference for social media and other digital platforms over traditional news outlets. Consequently, a significant portion of digital advertising revenue is being seized by platforms like Facebook and Google, a trend that has further weakened the industry’s outlook.

European news media are adapting to the rapid erosion of traditional journalism’s business model by exploring new online strategies. However, despite efforts to strengthen business models, labor-intensive public interest journalism faces increasing challenges in a changing market landscape. Against this backdrop, a fresh wave of innovative media startups has been emerging in Europe. They remain small, many of them operating under some form of non-profit format, but hold a strong commitment to watchdog journalism and are ready to experiment with new journalism formats, revenue streams and business models.

Despite their efforts and the advantages offered by the new digital era, they struggle to reach longer term viability, that is, to fulfill their mission to serve public interest with their journalism and at the same time to sustain themselves financially. Although they often manage to build sizable and dedicated audiences, they grapple with the task of converting this loyal following into paying supporters. Funding, predominantly philanthropic, remains scarce and fragmented. Existing incentives both on the national and EU level often fail to deliver effective support to these outlets with specific needs.

In recent years, there has been a growing awareness among diverse stakeholders that a more concerted effort is needed to dismantle prevailing obstacles and develop new measures and strategies to enhance the broader ecosystem of public interest news media while designing tailored incentives to facilitate the rise of newcomers. Governments, regulatory bodies, public institutions, donors, and media establishments increasingly recognize that they should collectively address these challenges to create an environment in which public interest media can thrive. This is particularly important as recent economic and market developments point to a fragile future for this sector.

1.2 Definition and scope of the research

In this paper, we focus on media startups in the European Union and the Western Balkans, and we are interested in ventures that share the following features:

1. Journalistic in nature: they are engaged in journalism, concentrating on news and current events, upholding the traditional principles of journalistic practice, and delivering content that users perceive as authentic journalism;^[1]
2. Serving public interest: they strive to inform the public about crucial societal matters, and are committed to the pursuit of truth, seeking to provide the public with reliable and accurate, balanced and representative information, made by actors independent from vested interests, be they political, corporate, or private.^[2] They aim to serve the audiences that have been overlooked by traditional media;^[3] and they were founded at least in part to fill the gap left as commercial news organizations retreated from producing public interest journalism;^[4]
3. Startup identity: distinct from established legacy media entities, they are self-contained and independently owned and operated^[5],[6]. New or in early stages of development, they are actively refining their business models, striving for expansion in terms of both reach and revenue, and inching closer to financial sustainability;^[7]
4. Varied scale: While their scale varies, they share a vision to monetize their work to meet their targeted journalistic goals. Adaptability is key, as they refine their business models progressively. Generally, their annual earnings total less than US$500,000;^[8]
5. Profit dynamics: These startups might fall into either the for-profit or non-profit category, with the latter being more common. Often functioning as non-profit or social enterprises, their profits are reinvested into the organization’s mission rather than being distributed among owners or shareholders.^[9]

1.3 Methodology and research questions

This research paper is based on desktop research conducted in July and August 2023 with a review of articles in the trade press and on the websites of European institutions, philanthropic organizations, and startups as well as of publicly accessible research reports, and academic literature. It aims to deliver an overview of the media startup scene in Europe by answering the following research questions (See Chapter 2):

1. How have the current trends shaping the news ecosystem evolved over the past few years? (See section 2.1.)
2. Who are the notable startups, what main internal and external challenges are they facing and what specific strategies have they harnessed to achieve success? (See section 2.2)
3. What examples for resources and incentives are in place to support the growth of news media and its media startup scene in Europe? (See section 2.3)

In Chapter 3, the research will present measures in place in Europe that have boosted or could boost the media startup scene. In Chapter 4, we will summarize the latest developments with a focus on how this scene is expected to evolve. Finally, in Chapter 5, we put forward recommendations about good and bad practices and experiences in supporting media startups in Europe, which could provide inspiration to media in other contexts such as Lebanon.

2. Overview of the media startups scene

2.1 Broader trends shaping the European media startup scene

From economic challenges to deteriorating media freedom, to technological advancements and to shifts in consumer behavior, several important trends shape the environment for public interest media startups in Europe which create both opportunities and risks for these initiatives.

Deteriorating overall economic environment: Over the past ten years, media outlets have encountered substantial setbacks due to a series of economic crises. These challenges were exacerbated by the economic downturn triggered by the Covid-19 pandemic. As a response to reduced advertising expenditures, media organizations introduced cost-cutting measures, streamlined their operations, and reduced their workforce.^[10] Revenue trends show a steady decline for print media, a moderate increase for TV and radio, and a significant upswing for digital news platforms (from €2.5bn in 2016 to €3.7bn in 2021; an increase of 60%). However, the growth in the digital sector falls short of fully offsetting the decline in print (from €22bn to €16.1bn, a drop of 27% from 2016 to 2021). Consequently, there was a substantial drop in total industry employment, from approximately 850,000 employees to around 600,000, reflecting a 30% reduction between 2008 and 2020. Profit margins varied between -3% and 7.5%.^[11]

Technological innovation drives changes in consumption habits:^[12] As European audiences are increasingly turning towards online platforms for accessing news, a key trend is the gradual reduction in news consumption through traditional media outlets. This shift is fueled by several factors:

• The increasing use of smartphones and widespread mobile internet access have facilitated the consumption of news virtually anytime and anywhere.
• The evolving online content offers are also shaping consumer preferences; consumers are drawn to the interactive nature of online news content.
• Younger demographics exhibit a preference for partially curated digital sources, with a particular affinity for social media platforms, blogs, YouTube, and similar video-sharing platforms. This group tends to engage less with established news organizations than other age cohorts.

Consequently, news media are operating in the framework of the attention economy. Various forms of content, spanning news, advertising, and entertainment, compete to capture attention in both online and offline spheres. Traditional media entities have expanded their online presence to maintain relevance and cater to citizens. Meanwhile, alternate players like social media platforms also serve as news sources.

Tech platforms’ Influence:^[13] Businesses’ reliance on external platforms continues to be a significant trend, coming with both risks and benefits. Online platforms have emerged as crucial catalysts for news consumption and traffic generation toward news media websites. This dynamic potentially enhances revenues, yet on the flip side, it could lead to news media becoming dependent on platforms, their distribution methods (including algorithms), and monetization models. While the advertising market in the EU has grown in recent years, particularly in the online sector, the news media have not benefited from the rapid expansion of internet advertising as it once did. This is due to the significant portion of digital advertising revenue being seized by platforms like Facebook and Google, a trend that has further eroded the news industry’s profitability.

Trust in the media has declined in various European countries: Starting from the early 2000s, technological advancements have led to a proliferation of media platforms and alternative channels, offering the public more options for sourcing their news. Simultaneously, mainstream media have faced reproach for allegedly not upholding their professional norms, being viewed as inaccurate and biased.^[14] The spread of disinformation, the use of clickbait, and increased political polarization have further accelerated the decline in public trust in the media.^[15]

While news holds value for people, they might not be prepared to pay for it. There is still a general reluctance to pay for access to news content. This divergence between the perceived value of news content and the unwillingness to pay for it poses a significant challenge to the viability of news media organizations. The preference for free news is prevalent among consumers online, driven by the belief that news should be freely accessible or that the quality of free news suffices. Although digital subscriptions represent the most common payment method, they are used by only a fraction of users.^[16]

Fractured market with a problem of scalability: Throughout the continent, media entrepreneurs encounter a fragmented market characterized by diverse languages, cultures, and media environments.^[17] As a consequence, news media companies remain focused on national markets, and just a small fraction of them have a presence beyond their domestic markets. While the number of news media companies is high, they tend to be small, and the sector’s turnover is mostly driven by large companies, in particular in TV broadcasting. With most news media companies (more than 80-90% depending on the sector) having 10 or fewer employees, the news sector has the highest share of micro enterprises in the EU, which is an indicator of fragmentation, potentially leading to a lack of economies of scale.

Public interest journalism struggle financially:^[18],[19] The rise of digital technology has over the last decade swiftly eroded journalism’s conventional business model reliant on advertising and subscriptions. Given this context, European news media, overall, are trying to explore new ways for viability, particularly in the online realm. These efforts include the exploration of novel business models, fostering community engagement, diversifying revenue streams, presenting bundled content packages, and embracing innovations in news media formats, often powered by Artificial Intelligence (AI). Labor-intensive investigative journalism focused on public interest, historically sustained by profits generated elsewhere within news organizations, has experienced cutbacks across the news industry. Different methods are being employed to strengthen business models, yet many outlets in public interest journalism grapple with financial challenges.

Media freedom and independence are in decline:^[20] While Europe still stands as the continent providing the highest level of press freedom, reporters face mounting obstacles. The 2019 World Press Freedom Index highlights growing hostility directed at journalists and the media, actively endorsed by political leaders and authoritarian regimes. Over the past decade, some governments have manipulated media landscapes to serve their own political agendas, as the example of Hungary and Poland demonstrate.

2.2 Key players, main challenges and adopted strategies

In the context discussed earlier, a fresh wave of inventive media startups is emerging in Europe. These startups are strongly committed to both their audience and democracy, driven by their focus on public interest journalism. Their ambition lies in reclaiming journalistic territories, audiences, and approaches that traditional media have overlooked. What sets them apart is their willingness to experiment with new approaches to sustainability and business models.

In this chapter, we will present some notable startups in this field. We will explore the main challenges they face, discussing research wherever it is available and highlighting the strategies the startups have harnessed to move towards viability.

2.2.1 Key players in the European public interest media startup scene

As comprehensive research is lacking in the sector of public interest media startups in Europe, it is challenging to gauge the number of enterprises established over the past decade. Nonetheless, analyzing an available and extensive database^[21] that identifies 80 such ventures across the EU, Switzerland and Western Balkans, some significant trends begin to emerge. (The Annex includes a list and a brief description of selected actors within the European public interest media startup landscape based on this database and the author’s own research.)

• The industry has experienced swift expansion, with three-quarters (71%) of the analyzed organizations founded in the past decade. However, this growth trajectory stalled over the last two years due to uncertainties stemming from the pandemic.
• The media outlets remain small: the database consists of mostly small to medium-sized newsrooms. Only 18% of the organizations have grown to the point where they employ more than 20 people. 45% employ five to 20 full time staff; 40% of them employ fewer than five people; the most common newsroom size was five to 10 full-time employees. There is no data, however, on the number of freelancers working for the newsrooms.
• Registering as non-profit entities is the most common: Half of the entries in the database are legally established as non-profit organizations, aligning with the media industry’s quest for fresh and viable business models. Considering diminishing advertising revenue and subscription earnings, these startups are venturing into novel avenues for funding, such as seeking philanthropic support (i.e., grants from foundations), which is frequently contingent on holding charitable status.
• Diversified revenue streams: These initiatives rely on a variety of revenue streams, with personal donations emerging as the leading source, as 71% reported accessing such funding. Support from foundations ranks second with 66%. Membership fees are employed by 41% of these ventures, while subscriptions and alternative crowdfunding methods are used by 30%. A mere 18% indicated revenue generation from advertising.
• Emphasis on local and regional coverage: In the database, 31% of news organizations are actively involved in local or hyperlocal reporting, addressing a void created by the retreat of legacy media from local journalism. Additionally, half of the outlets focus on regional coverage.
• Editorial focus on watchdog journalism: Among the surveyed organizations in the database, 70% fulfill their societal role as watchdogs through investigative journalism. This response echoes an industry-wide trend, as legacy media outlets have often pulled back from this domain due to declining ad revenues and subscriptions. Notable in the European context is that half of the participants in the database engage in cross-border investigations—a pioneering approach given the fragmented nature of the European news media market discussed earlier. Some 35% of the media outlets reported focus on data journalism and 23% on fact-checking.
• Coverage areas: Politics takes the lead with a majority (88%) of these entities covering the topic. Environmental issues hold the second position, shared by 83% in the sector. Moreover, around two-thirds delve into criminal investigations and the exposure of corrupt practices. Other crucial coverage areas reported include economics (78%) and health (71%).

Among the 80 news outlets cataloged in the aforementioned database, 18 have opted to unite within a self-organized exchange network, the Reference group,^[22] currently incubated by the foundation Arena for Journalism in Europe. This network, which boasts 26 members, operates across print media, audio media, and digital platforms.

2.2.2 Media startups’ main challenges and strategies adopted

While the media startups examined in this study benefit from greatly reduced entry barriers in the news sector and the availability of diverse digital tools for content creation, editing, and distribution, they still struggle to reach longer term viability, that is, to fulfill their mission to serve public interest with their journalism and at the same time to sustain themselves financially.^[23] This situation is a consequence of a set of external and internal challenges, which often intersect and overlap, as discussed below.

Political backlash, politicized market distortion, legal, physical and digital threats^[24],[25] As previously discussed, a notable portion of emerging public interest media startups adopt a robust watchdog journalism stance in their endeavors. Paradoxically, as these ventures achieve greater success, they encounter greater difficulties particularly in more restrictive media environments in the EU but also in countries with a good press freedom record. These challenges include:

• Political efforts to preemptively undermine their legitimacy, through disinformation campaigns, smear campaigns, anti-journalist rhetoric, often using captured media as a carrier
• Hostile legislation weakening access to information laws, freedom of information regimes
• Political efforts to undermine their access to international, cross-border philanthropic resources and investments or to use their “foreign” funding to discredit and sideline them
• Politicization of national mechanisms such as allocation of state advertising, which systematically disfavor independent news media startups
• Legal threats, malicious or frivolous SLAPP lawsuits particularly defamation or privacy cases
• Increased physical and digital threats

Market dominated by big players: The flip side of the fragmented market described earlier is that the news media market is dominated by large companies which account for most of the sector’s turnover. Research shows that 97.5% of the overall turnover in TV broadcasting, 89.6% in radio broadcasting, and 90.3% in the publishing sector is generated by companies with over 10 employees. Most startups, as demonstrated earlier, have adopted a strategy that, instead of directly challenging incumbent big players, focuses on finding niche approaches (in-depth, fact-checking, investigative journalism) and trying to survive without too much advertising revenue. In several markets in the EU and Western Balkans, startups also compete for audience attention with large media enterprises with opaque ownership structures whose performance and attacks on independent journalism systematically undermine trust in credible media.

Converting reach into revenue: Achieving a substantial reach remains a crucial objective for numerous media startups, as it holds significance not only in financial aspects but also in terms of amplifying the impact of their journalism. Although they often achieve this goal by building sizable and dedicated audiences and emphasizing community engagement, they still grapple with the task of translating this loyal following into paying supporters, especially considering the earlier noted reluctance of European users to pay for news. Converting a committed community into a paying audience often presents a formidable hurdle for media startups.^[26],[27]

Limited funding often not aligned with startups’ needs: Even though European media startups demonstrate achievements in audience growth, funding continues to be a primary area of concern. Startups in nations with comparatively smaller populations hold less appeal for the type of venture capital often seen in the American model. Additionally, Europe’s philanthropic culture is not comparable to that in the United States. While European foundations and other contributors can offer crucial initial funding for startups, they may not provide the substantial financial support that American philanthropists have historically awarded to sustain similar endeavors.^[28]

Some startups, especially those focused on investigative journalism are struggling to raise even seed funding. There is no viable market to tap into, there are no local donors, and the crowdfunding potential is also limited. In many cases, their markets are also captured by vested interests.^[29]

In addition to the scarcity of available funds for journalism initiatives in Europe, the sector also suffers from fragmentation. Few funders adopt a comprehensive ecosystem perspective, opting instead to concentrate on specific elements, countries or particular issues. This leads to a fragmented funding landscape, frequently centered around project-based allocations, while startups often require sustained core-funding spanning several years to cover their operations.^[30],[31] Numerous entities, particularly those focused on investigative journalism, depend heavily on a small number of key funding sources. These sources consist mainly of philanthropic support, which exposes startups to potential risks arising from donor preferences, shifts in donor priorities or situations where donors allocate funds for specific projects or themes.^[32]

There are also evident gaps in funding, especially for those outlets that reach a certain level of growth. Unlike the well-established funding ecosystem that exists for the technology startup sector, which includes options like seed funding, angel investors, and venture capital, European grants typically offer relatively modest sums ranging from a few thousand to tens of thousands of euros. Startups often lack a clear pathway to secure funding for the subsequent phases of their expansion.^[33]

In several countries,^[34] the lack of a tax-exempt, non-profit structure for journalism still hinders the sector from thriving.

Human resources, talent acquisition: Producing public interest journalism is distinctly labor-intensive, necessitating highly skilled journalists and technologically adept personnel. Moreover, media outlets must be able to provide sustainable, competitive salaries for this team over the long term. At a time when even major established media organizations find it challenging to maintain competitive wage levels, smaller independent media outlets must navigate methods to either bypass labor regulations or offer significantly lower wages. Under these circumstances, a growing number of skilled professionals may quit, no longer viewing journalism as a sustainable career option.^[35]

Internal organizational development challenges: The transformation of the news industry outlined above has resulted in the lay-off of numerous experienced journalists. Many of these startups were established by journalist entrepreneurs who recognized a potential opportunity in the digital transformation. However, having editorial expertise and passion does not inherently ensure business success and sustainability. This mismatch has given rise to distinct hurdles stemming from inadequate organizational and business skills. While certain philanthropic endeavors have tried to bridge this capacity gap, the challenge remains.^[36]

2.3 Resources and incentives for the growth of the media startup scene in Europe

In the territory analyzed, comprising the European Union and the Western Balkans, rules and regulations generally do not impose limitations on the establishment of media enterprises or the acquisition of licenses for media operations. While countries have diverse approaches regarding the management of licenses and registration/notification procedures for audiovisual media services,^[37] and in some countries there are restrictions on foreign ownership in media,^[38] the general approach is unrestrictive towards market entry. The summary below therefore focuses on resources, facilities and incentives which aim to support the growth of public interest media, including startups.

The EU highlights^[39] that it has in recent years stepped up its efforts to improve the overall economic environment of news media.

• The EU’s 2019 copyright reform serves to protect the financial sustainability of the press by reducing the “value gap” between the profits made by internet platforms and by content creators, encouraging collaboration between these two groups, and creating copyright exceptions for text- and data mining;^[40]
• The revised Audiovisual Media Services Directive (AVMSD) is intended to foster a level playing field between broadcasters and online media players;
• The Digital Services Act (DSA) and Digital Markets Act (DMA) aim to make digital markets fairer and more competitive.

2.3.1 EU level initiatives

This selective review includes EU level initiatives which directly or indirectly aim to support specifically the news media sector. They are not specifically targeted to support startups; however, these are initiatives that might benefit public interest news media startups by improving their overall environment, market conditions, competitiveness or by providing them access to funding opportunities.

News Initiative:^[41] the initiative under the European Media and Audiovisual Action Plan^[42] looks at the challenges facing the news media industry and seeks to provide a coherent response, bringing together different policy and funding instruments under a common banner.

• Protecting media freedom and pluralism:
  • EMFA and recommendations: In 2021 the European Commission (EC) published a Recommendation on the protection, safety and empowerment of journalists and other media workers^[43] and in 2022 a proposal for the European Media Freedom Act,^[44] a novel set of rules to protect media pluralism and independence accompanied by a Recommendation to encourage internal safeguards for editorial independence.^[45] In 2022, the EC published a Proposal for a Directive on strategic lawsuits against public participation (SLAPP).^[46]
  • Press and media councils: With an available budget of €1 million, the EC also aims to strengthen the position of press and media councils and help with further development of deontological standards.^[47]
  • Rapid response mechanism and media ownership monitoring: With a budget of €4.1m, the EC supports a rapid response mechanism^[48] that brings violations of press and media freedom to the forefront, and provides practical help to journalists under threat, including concrete tools such as advice and legal support as well as offering shelter and logistical assistance. The EU also supports a Media Ownership Monitoring System^[49] (budget: €500,000), a country-based database containing information on media ownership and a systematic assessment of both relevant legal frameworks and risks to media ownership transparency.
  • Funding media: After supporting a mapping^[50] of news media deserts across the European Union (budget of €1.99m), in 2023 the EC is allocating funding through a facility called Journalism Partnerships to support news media sectors with a special relevance to democracy, such as local and regional media, community media and investigative journalism (budget: €10m) and cross-border collaboration^[51] (€7.6m). This giant facility aims to help the sector with testing viable business models, developing business and editorial standards, promoting collaborative content, training and mobility of professionals, and sharing best practices.
• Supporting media innovation
  • News media platforms:^[52] Via a call for proposals for news media platforms (budget: €5.98m), support is given to projects that expand the use of tools and deliver news content across multiple media channels. In 2023, a second pilot project will support the setup of a citizen-facing online video platform. The goal is to improve EU citizens’ access to trusted information across the EU by setting up and developing European media platform projects.
• Stimulating media participation
  • Online media offer for young audiences:^[53] To enhance young people’s access to information, the Commission supports the development of innovative and attractive news projects for young Europeans. Projects produce and distribute thought-provoking content on a daily basis, showing multiple viewpoints, in formats attractive to youth.

2.3.2 National initiatives in countries in Europe^[54]

This selective overview includes a variety of examples showcasing both direct, indirect and supplementary support mechanisms designed for the press and media sector across several European countries, both EU and non-EU member states. While not exclusively tailored to startups, these initiatives can also benefit startup ventures in the industry.

Press subsidies and other direct support mechanisms: In some European countries, the state offers direct funding opportunities for media outlets. While many of these funds support traditional, print press products and their digital transformation, some schemes are open to digital publications, newcomers and startups, including non-profit media. In Austria, for example, there is a state facility in place to prepare media outlets for the future. Norway, Sweden and Denmark offer innovation support for news media, especially where new technologies are used to create editorial impact. France has state funds dedicated to the emergence of new media, innovation and local media. Luxembourg specifically names startups for support in news media. In the Netherlands the state finances innovative projects relating to the press and journalism.

Tax breaks and other indirect support mechanisms: In Germany, indirect subsidies are granted to newspapers in the form of a relief on turnover tax. In France, there are fiscal support measures like communal tax breaks, investment tax breaks, donation tax breaks, subscriber tax breaks and social contribution reliefs for journalists. In several European countries including Greece, Malta, Poland and Hungary, state advertising in media is an important support mechanism; however, these schemes are often criticized by international press freedom groups as arbitrary, non-transparent and favoring media loyal to the government.^[55],[56] In Hungary, media outlets that have established a foundation or a nonprofit entity can benefit from a so-called 1% scheme under which taxpayers can donate 1% of their income taxes to a nonprofit organization, including nonprofit media. In Spain, the government set up a youth culture scheme that allocates €400 per beneficiary to purchase culture products including press products and digital subscriptions.

Reduced value added tax for press: In 2018, the EU agreed that member states can apply reduced VAT rates or even scrap taxes on electronic books and digital press.^[57] Since then, several EU countries have introduced such measures. In a range of European countries, newspapers and digital press benefit from a sharply reduced VAT rate. The VAT rate for the press is 5% in Austria, Croatia, Latvia, Lithuania, Malta, Poland, Romania, Slovakia; 4% in Italy and Spain, 3% in Luxembourg, 2.1% in France, and 2.5% in Switzerland. In other countries the rate is somewhat higher but still reduced from the normal rates: 10% in the Czech Republic, Slovakia and Finland, 9% in Ireland, the Netherlands and Estonia, 7% in Germany, and 6% in Greece, Portugal and Sweden. In Belgium, Norway, the UK and Denmark, a 0% rate is applied to print and digital single-copy sales and subscriptions.

3. Ideas for the promotion of media startups in Europe

The previous chapter discussed a range of significant trends, presenting both opportunities and risks, that influence the landscape for European public interest media, including newcomers to the markets.

In recent years, there has been a growing awareness among diverse stakeholders that a more concerted effort is needed to dismantle prevailing obstacles and develop new measures and strategies to improve the broader ecosystem of public interest news media while designing tailored incentives to facilitate the rise of newcomers. Governments, regulatory bodies, public institutions, donors, and media establishments increasingly recognize that they should collectively address these challenges to create an environment in which public interest media can thrive.

3.1 EU planned policy responses

Transitioning from a patchwork of policies, the European Union is currently shifting its focus towards more holistic legislative efforts to confront these challenges. The recently adopted Digital Services Act and the Digital Markets Act aim to create a more secure digital arena, one that safeguards the fundamental rights of users while establishing a level playing field for businesses.^[58]

The European Media Freedom Act (EMFA), a draft legislation introduced by the European Commission would complement this framework by fostering regulatory convergence and cooperation, promoting the free provision of quality media services and ensuring the fair and transparent allocation of economic resources in the internal media market.^[59] As a targeted response to the challenges faced by public interest news media, it proposes a new set of rules to promote media pluralism, transparency and independence across the EU.^[60] Below is a selection of ideas for policy responses from the EMFA that might benefit public interest news media including startups:^[61]

1. Preventing undue interference in editorial decisions: “the regulation would require Member States to respect the effective editorial freedom of media service providers” and improve the protection of journalistic sources. “Media service providers would have to adopt measures to guarantee, once the overall editorial line has been agreed between their owners and editors, the freedom of the editors to take individual decisions in the course of their professional activity.”^[62]
2. Improving the transparency of ownership in media: “media service providers would have to ensure the transparency of ownership by publicly disclosing such information on their websites or another medium that is easily and directly accessible. The proposal would complement the existing framework by, under certain conditions, requiring all media services providing news and current affairs content to provide information on ownership–direct, indirect and beneficial owners–to recipients of media services.”^[63]
3. Better assessing media market concentrations: “the regulation would not prevent or set specific thresholds for media market concentrations; it would however provide a framework for national procedures for assessing market concentrations that could have a significant impact on media pluralism. It would also require that any legislative, regulatory or administrative measure taken by a Member State that could affect the media be duly justified and proportionate.”^[64]
4. Assuring transparent allocation of state advertising: “the rules aim at avoiding undue state influence, by minimizing the risk of misuse of public funding to favor and covertly subsidize certain media outlets that provide government-friendly views. Public authorities (national or regional level, or local governments of territorial entities of more than one million inhabitants) would have to publish information each year on their advertising expenditure on media.”^[65]
5. Creating transparent audience measurement systems: “the act would enhance the transparency and objectivity of audience measurement systems, which have an impact on media advertising prices, in particular online. Complementing the Digital Markets Act, the regulation would require providers of audience measurement tools to give media service providers and advertisers detailed information on the methodology used.”^[66]

3.2 Recommendations from NGOs for potential policy responses

In recent years, international institutions,^[67], non-governmental organizations,^[68],[69] media development entities,^[70] along with donors,^[71] have put forward basic principles, various strategies, policy recommendations and specific actions to improve the landscape of journalism that serves the public interest, including actions to facilitate the emergence of new players. Here is a compilation of concepts that has been shared in these circles, some of them obviously controversial, but worth mentioning:

Improving overall business, political and legal environments for startups: governments should establish robust measures to counteract distortions in the media market and create a diverse set of mechanisms, and indirect and direct subsidies to support public interest journalism, including specifically targeted facilities to support newcomers and startups. Governments should guarantee that any form of assistance provided to public interest media outlets includes safeguards that uphold diversity within the market and ensure editorial autonomy. Moreover, governments should encourage the creation of environments conducive to the flourishing of innovative financial models. The distribution of public subsidies, including state-sponsored advertising, must be based on impartial and unbiased criteria, and must adhere to clearly defined and transparent processes.

Taking state subsidies and support mechanisms to a new level: some in this scene, including certain donors, say that journalism serving the public interest is a fundamental public good, and therefore is beyond market logic. They propose fully subsidizing the field, through a form of universal basic income designated for eligible organizations.

Fostering a culture of ownership transparency, preventing ownership concentration: media outlets that openly share their ownership details can cultivate higher levels of trust among their audiences. Such transparency helps regulatory bodies curb excessive ownership concentration. Independent regulatory bodies and media establishments should make readily available, easily accessible information concerning media ownership.

Facilitating non-profit status and crowdfunding: governments ought to simplify the barriers that currently impede media outlets from obtaining nonprofit status. This adjustment would empower media outlets to accept donations and alleviate their tax obligations. While revenue from audiences will continue to be essential for sustaining media entities, governments should enhance systems that motivate individuals to contribute to the media organizations of their preference. This could encompass strategies like allowing income-tax allocations or providing tax benefits for digital subscription expenses.

Increasing philanthropic funding and fostering better collaboration of stakeholders: philanthropy will play a major role in the longer term in funding public interest journalism to ensure not just its survival but its growth. In order to offset the scarcity and the siloed nature of funding, it is important to introduce measures that help funders pool resources and act collaboratively. Examples include multi-stakeholder initiatives, investment coalitions like Pluralis bringing together media companies and foundations, or Civitates, which pools foundations into common action.

Improving availability and access to multi-year, core funding: core funding is key to the long-term viability of the field to complement project funds or thematically-tied funds. Core funding provides a measure of stability and flexibility to the grantee—and maximize its independence.

4. Conclusions

The outlook in Europe based on the current trends that shape the overarching business landscape for public interest media outlets, including startups, is pessimistic.^[72] In the coming years, these media outlets will have to navigate an environment of instability, set against the backdrop of a post-pandemic economic crisis, aggravated by an ongoing war on the continent and surging living costs for consumers.

In the short term, these market shocks will significantly influence the growth outlook of public interest news media and will further accelerate structural transformations, moving towards an even more digital and mobile-centric landscape with the increasingly growing influence of social media platforms. This continuing shift further intensifies the impact of big tech platforms on journalism formats and business models.

In the longer term, the continuing shift in audience behaviors will define the media outlets’ prospects. The consumption of news in traditional media like TV and print is expected to further decline, but news consumption on social media will not offset this drop. In some northern European media markets, publishers managed to somewhat counter this trend, but younger users increasingly prefer accessing news through social media, search engines and mobile aggregators, and show a weaker connection with news brands, using their websites or apps less than earlier generations. This trend is compounded by news avoidance. European users seem less interested in news, and many turn away from news temporarily or permanently. Audiences pay more attention to celebrities, influencers, and social media personalities than journalists.

With the dwindling interest and as increasing cost of living puts household finances under pressure, a sizable portion of the audience prefers freely accessible news. This signals that media outlets might not count on any more growth in subscriptions and crowdfunding. Similar to past trends, a substantial share of digital subscriptions remains concentrated in a handful of high-end national brands, making it a challenging landscape for startups to carve out a foothold.

These trends indicate that startup news outlets which in the past years have been successful in building online reach and converting this reach into subscribers or individual donors are facing a fragile future.

Recommendations for incentives that could serve as inspiration for initiatives in Lebanon

Using the insights from this research, this section will propose recommendations for incentives which could serve as a source of inspiration for initiatives in different contexts such as in Lebanon.

• Remove existing barriers to market entry: promote the formation of new companies, and dismantle existing barriers that hinder the entry of public interest journalism outlets into the market. This entails not only streamlining bureaucratic processes for permits, licenses, and registrations, but also ensuring that these procedures are easily accessible, low-cost, and efficient.
• Increase ownership transparency, prevent harmful market concentration: implement regulations which prioritize ownership transparency to increase trust in public interest journalism outlets and utilize competition rules to counteract market concentration, thereby fostering a diverse media landscape and enabling the emergence of new players.
• Facilitate startups’ access to local and international donor funding: public interest journalism startups should enjoy seamless and unobstructed access to a wide array of funding options from public, private, and non-profit sources. Encourage collaboration among stakeholders such as private companies, foundations, and impact investors so that they can better pool their resources and create multis-takeholder initiatives.
• Establish direct funding facilities for media startups: set up public funds dedicated to supporting public interest journalism with independent boards to oversee the allocation of funds, ensuring transparency. Prioritize easy accessibility and flexibility. Core funding should be provided to sustain essential operations, other funding schemes should foster innovation and experimentation, and also be tailored to address the unique organizational development requirements of startups like capacity building in organizational and business proficiencies.
• Introduce indirect funding avenues: this could encompass reduced VAT for media products along with social security reliefs or tax breaks. Ensure transparency in the allocation of state advertising and make it accessible to startups. Offer tax deductions for individuals and businesses that donate to or subscribe to recognized public interest journalism outlets.
• Introduce a tax-exempt and non-profit framework for public interest journalism: provide tax exemptions and non-profit status to journalism outlets dedicated to public interest to incentivize private donors, businesses, and philanthropic organizations to invest in their work. The non-profit status would shield these outlets from profit-driven motives and undue commercial pressures, ensuring their editorial independence and commitment to serving the public’s right to know.

Annex

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Author

Attila Mong is a Hungarian-born journalist, radio broadcaster and columnist with more than 20 years of experience in news and investigative reporting. Now based in Berlin, Attila works as Europe representative of the global press freedom organization, the Committee to Protect Journalists (CPJ) and a consultant on digital innovation projects with the DW Akademie, Germany’s leading media development organization. He is a supervisory board member of Atlatszo, a crowdfunded investigative journalism platform in Hungary.

Editors

Marius Dragomir and Judit Szakács

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Media and Journalism Research Center (MJRC)

MJRC is an independent media research and policy think tank that seeks to improve the quality of media policymaking and the state of independent media and journalism through research, knowledge sharing and financial support. The center’s main areas of research are regulation and policy, media ownership and funding, and the links between tech companies, politics and journalism.

Maharat Foundation

Maharat Foundation is a women-led freedom of expression organization based in Beirut dedicated to campaigns grounded in research and strengthening connections between journalists, academics, and policy makers.

It advances and enables freedom of expression, quality information debate and advocates for information integrity online and offline. Maharat promotes innovation and engages the journalistic community and change agents within Lebanon and the wider, MENA region to promote inclusive narratives and debates and to counter misinformation, disinformation, and harmful content.

Project brief

This publication is within the project entitled “Media Reform to Enhance Freedom of Expression in Lebanon”, implemented by Maharat Foundation, Legal Agenda and the Media and Journalism Research Center (MJRC) with the support of the Delegation of the European Union to Lebanon.

The project aims at enhancing Freedom of Expression in Lebanon through the promotion of media law reform as a priority on the national agenda and improvement of the environment for media coverage on the transparency and accountability of elections process.

The project supports the publication of background papers produced by Maharat Foundation on the local Lebanese context and by MJRC on the European standards and best fit recommendations for Lebanon.

The papers cover 6 main themes: Protection of journalists and their sources, Associations of journalists, Decriminalization, Incentives, Innovation, and Regulation, co-regulation and self-regulation opportunities for the media.

See more on our project page.

Disclaimer

This publication was funded by the European Union. Its contents are the sole responsibility of Media and Journalism Research Center (MJRC) and do not necessarily reflect the views of the European Union.

Cite this article

Attila Mong. (2024). Public Interest Journalism Startups in Europe: Trends, Players, Challenges and Incentives. Tallinn/London/Santiago de Compostela: Media and Journalism Research Center (MJRC).

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