Overcoming the financial problem – strategies used by local media in Europe 

A sure sign of a healthy democracy is the presence of pluralistic media. Having a vibrant media landscape ensures that citizens get exposed to multiple narratives which help them make better decisions. But this pluralistic media environment is on a decline in Europe. 

The Media Pluralism Monitor (MPM) 2023 labelled Europe’s market plurality to be at high risk. A pluralistic media market consists of numerous media outlets which results in the audience accessing a range of opinions and analysis. A market with low pluralism on the other hand keeps the power of the media to influence the public in the hands of a few big players. 

MPM 2023 found that the indicators for market ownership are all placed within the high-risk category and that the actual degree of ownership concentration is “worrisomely high almost everywhere [in Europe].”  

Cruz Negreira, a researcher from the University of Santiago de Compostela, mentions in her research that the economic crisis of 2008 resulted in the closure of multiple small media outlets and local offices. The erosion of the traditional advertising model due to digital advertising coupled with the economic crisis pushed many journalists to lose their jobs. Around 12,000 journalists were left unemployed in Spain itself. 

This deterioration of the traditional media landscape along with unemployed journalists, coincided with the rise of digital news. Negreira says that “the Internet made it possible for small teams of journalists to start their own projects.”

As Negreira further explains, “in the 2000s, after the crisis of the traditional media model and the economic crisis of 2008 (with serious consequences for the journalistic sector), digital media and digital natives began to grow, many of them local."

She highlights  her point by mentioning Goiena, a local news media of the Basque Country, an autonomous community in Spain. This local media publisher hosts an advanced section that promotes citizen participation in the local affairs. 

The digital transition has been a catalyst for local and community-focused media. Spain saw a tremendous rise in the number of such digital publishers, going from 1,247 digital outlets in 2005 to 3,065 in 2018. Despite this growth, such local first outlets are experiencing a major problem – funding.

In the past decade, there has been a steady decline in the revenues of local newspapers. The lack of funds has pushed many media outlets to merge with bigger news corporations, posing serious harm to the plurality of the media landscape. 

Carl-Gustav Linden, a researcher on local media from the University of Bergen, mentions that “hyperlocal media face many challenges, especially ones of financial sustainability.” The MPM 2023 too identified that the biggest challenge faced by local digital media outlets is funding. 

Local media often prioritise community service over economic viability. This leads to precarious financial standing for the outlet in the medium and long term. Lack of funding also puts more pressure on the journalists and reporters as they would then need to do their work on a voluntary basis. 

Founders of many local media outlets start their project by investing their own money. This was the case for De Utrechtse Internet Courant (DUIC).

Started in 2011, DUIC is a free news publisher for the Dutch city of Utrecht. Robert Oosterbroek, the editor-in-chief, mentioned to The Fix how the organisation started with its own capital. “DUIC has always been free, mainly in the first years because the founders invested their own money.” But personal capital is typically not a good long-term strategy. 

Linden describes that “There is no recipe that fits all, but a close engagement with the local community and listening to people's concerns as well as creating community through different measures seems to be a common feature [in financially sustainable media].”

Oosterbroek mentions how DUIC grew their audience base over the years. An increased audience base also resulted in an increase in revenue. “The news platform has also grown over the years. Because the reach of DUIC increased, more turnover could be generated.”

Apart from an increased audience base, the other way local media gains its funding is by relying on national and international grants. The sustainability of these organisations is highly dependent on the financial support given by the state. MPM 2023, traces the state’s role in providing subsidies to 19 EU member states.

Within them, only 15 countries have the state-provided subsidy reserved for local media. And within this list, only five EU countries, Austria, Denmark, Hungary, Netherlands and Spain, are considered to have adequate funding. 

In Austria, the Press Subsidy Act of 2003 offers financial support to regional newspapers. Recently, they have also added additional funding worth €20–25 million to support quality journalism. This fund is also used to promote regional reporting. 

The new Danish media agreement of 2021 has reworked its media support system to help the Danish population access more local news. According to this agreement, more funds will be allocated to local journalism and local media outlets.

In the Netherlands, the funding of local outlets is a task allocated at the municipality level. According to the Media Act, the funding must be provided to one broadcaster per province and one per municipality. The country also has Sydj, an organisation tasked with providing subsidies to the local media.

Negreira explains that in Spain “the government does not have specific [direct] measures to support local media. In the autonomous communities where there are co-official languages (in addition to Spanish), there are subsidies to promote the use of the local language in the media.”  

Apart from government funds, the local media publishers have found other ways in which they can gain funds. While Portuguese sinalAberto relies on grants, Romanian Iașul Nostru relies on grants and reader-derived revenue. In many cases, local media rely on multiple modes of revenue. For instance, Germany’s RUMS gains revenue from shareholder capital and consultancy services. 

The other way is expansion, when the local media outlet expands to cover more localities. Negreira provides the example of the Somos Madrid group, which includes - Somos Malasaña, Somos Chamberí, Somos Chueca, Somos Lavapiés and Somos Tetuán

“It started as an independent hyperlocal media project in Madrid, which grew by creating media outlets in several districts of the city. They are currently partners of a national digital native media, elDiario.es, and benefit from this partnership to have greater economic stability and a wider reach,” she tells The Fix.

Despite the struggle faced by local media to financially sustain themselves, they still pour their effort into making sure that they do their best for the community at large. Oosterbroek mentions, “Of course, there are financial challenges that editors have to deal with. But our biggest challenge still remains: how do we stay relevant? How do we make the biggest impact? What stories are important to tell? What do Utrecht residents want to read about?"

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