Saddened by the news from the media market

“It is of course sad when a big media like Fréttablaðið retires. There are dozens of media people, if not hundreds of people, who lose their jobs, and of course that is a sad day in itself,” Minister of Culture and Business Lilja Dögg Alfreðsdóttir tells about Fréttablaðið’s withdrawal from the Icelandic media market yesterday.

“The issue today is that there has been a market failure in the media market after the big content providers came in. We are working on it now – and we have been working on it in an international cooperation – to capture them,” the minister continues, adding that it is not a challenge that the Icelandic media face alone.

“In Sweden, 73 percent of all advertising revenue goes to these big conglomerates and in Iceland, that proportion is 45 percent. Everywhere, you’re striving to capture this and temporarily try to tackle this market failure because everyone wants to have a strong national media, and that’s why it’s vital that we get our arms around this,” says Lilja.

Taxation of the big social media players and the issue of RÚV

The Icelandic government is working on the matter at the OECD level, among other places, where taxation of foreign content making companies is among other things under discussion and some of the money that would be made available there would then go to domestic media.

“In addition, I have a growing belief that media subscriptions are going to increase. For example, we see this from the New York Times, where the revenue model has changed dramatically in that advertising revenue has decreased, while subscriptions have increased significantly. Thus I think the trend will become more pronounced, and now, for example, the five-year federal budget announced that we are going to spend almost two billion ISK over the period, in the form of tax incentives, supporting the media,” she says.

The issue of RÚV

What about the Icelandic National Broadcasting Service, RÚV, and its presence on the budget and advertising market simultaneously? The Minister spoke in an interview with the other day that the policy was to take RÚV off the latter. What is the timeframe there?

“We will have a design for it by the next budget,” answers Minister of Culture and Business Affairs Lilja Dögg Alfreðsdóttir.




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