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Austria

Austria

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Country Report 2022

Tales Tomaz, Josef Trappel, Anna Janny

Table of Contents

Media ownership

Austria is a small country in the centre of Europe, sharing borders with Germany, Switzerland, Liechtenstein, Italy, Slovenia, Hungary, Slovakia and Czechia. It is part of the German-speaking language area with some linguistic minorities (especially Hungarian, Slovenian and Croatian). The news industry is important in the country. Over two thirds of its 9 million inhabitants say to be highly interested in news (Gadringer et al., 2021). Above average readership rates for newspapers put owners of print media in high prestige position. At the same time, the Austrian media market is considered one of the most concentrated in Europe (Seethaler & Beaufort, 2021; Trappel, 2019; Steinmaurer, 2002).

For the EurOMo project, we analysed ownership and control of 12 traditional media outlets considering their relevance in their respective sectors (print, broadcast, online), measured either by high market shares or significant agenda setting potential. Following the crucial role of print media, the sample includes several newspapers with high market share and reach, according to the findings of the Media for Democracy Monitor 2021 (Grünangerl et al., 2021, p. 112). The boulevard ones are represented by Kronen Zeitung, the most read newspaper in the country reaching almost 30% of the population, and Kurier, with a reach of 7.4%. The free sheet Heute (11,6% reach) and the quality newspaper Der Standard (7.8%) complete the countrywide newspapers. With a readership comparable to national levels (corresponding to 9.8% of the whole country population), Kleine Zeitung represents regional newspapers in our sample, circulating primarily in the federal state of Styria. The weekly magazines Falter and Profil, by far the most read in this segment, complete the print media. Among the electronic media, the public service broadcaster ORF enjoys the highest popularity (Grünangerl et al., 2021, p. 102). When combined, ORF TV channels reach daily almost half of free-TV users. We have chosen the most news-related one, ORF 2, for our sample alongside two private ones, Servus TV and Puls 4. In radio, dominance of public service is even bigger with a combined reach of over 70%. Ö1 is their station dedicated to news, this way integrating our sample, whereas Radio Austria represents private radio.

It is worth mentioning that, according to the relevance criteria, no web-only news outlet could be included in our sample. Following a global tendency (Hardy, 2014; Hindman, 2018), legacy publishers, including the public service broadcaster, manage to control all relevant online news media in Austria. ORF website reaches over 60% of Internet users, while the websites of Krone, Standard, Kurier and Heute also enjoy reach between 34 and 42%  (Grünangerl et al., 2021, p. 118). That is why we only considered online media related to these brands. However, explicitly including these online counterparts into our sample allowed to grasp some divergent ownership structures, shedding light on the current complexity of media ownership transparency.

Table 1: Austrian sample of media outlets

Outlet Market Media group Main owners*
Kronen Zeitung Newspaper Krone-Kurier Family Dichand (50%), René Benko** (19.2%), Petra Grotkamp (10.6%)
Kurier Newspaper Raiffeisen bank (44.9%), René Benko** (19%)
Profil Magazine
Heute Newspaper Heute Wolfgang Jansky***, Eva Dichand***, Tamedia AG***
Standard Newspaper Standard Family Bronner (98.5%)
Kleine Zeitung Newspaper Styria Media Catholic Church** (100%)
Falter Magazine Falter Siegmar Schlager** (37.49%), Armin Thurnher** (27.49%), Hannes Pflaum (12.51%), Hans-Michel Piëch (12.51%), Florian Kenk (10%)
ORF 2 TV ORF Österreichischer Rundfunk public foundation (100%)
Ö1 Radio
Radio Austria Radio Alpha Medien Alpha Zehn Medien foundation, donor Niki Fellner (100%)
Servus TV TV Red Bull Family Yoovidhya**** (51%), Dietrich Mateschitz (49%)
Puls 4 TV ProSiebenSat1 Public shareholders (63%), Silvio Berlusconi (3.5%)
*Focusing on beneficial owners (natural persons) when possible to identify. Otherwise we indicate relevant companies.
**Control by means of a private foundation (Privatstiftung, in German).
***They own shareholdings in both print and online Heute, but with different participation.
****Distributed between the family company TC Agro Trading (49%) and the family heir Chalerm Yoovidhya (2%)
Source: EurOMo database 2022

In terms of ownership, the Austrian media system can be characterised as dual model, with a solid public service broadcaster alongside strong private media groups in the print market. This balanced approach has proven stable even after the liberalisation of the broadcasting market, in 2001, and the following rise of private TV and radio channels.

As expected, the ownership structure of the public media is relatively simple. ORF 2 and Ö1 are owned by a public foundation whose board members are determined by distributed political forces (executive federal and regional governments and proportional parliamentary representation).

Private media, on the other hand, display more complex arrangements. Most outlets are ultimately owned by families and individuals. Only Puls 4 is mostly owned by a publicly listed company, the German ProSiebenSat1 group. However, the single most important controller of this company is Silvio Berlusconi, who has majoritarian position in all companies upwards in the ownership chain.

In this context, three families stand out. Members of the Dichand family own half of Kronen Zeitung, the most read newspaper and part of the largest private media group in the country. In addition, one family member participates in the control of Heute, either by direct shareholdings (in the case of the online publication) or playing important roles in private foundations that own the printed edition.

Second, the Bronner family directly controls the quality newspaper Der Standard: 58.9% is owned by its founder and editor Oscar Bronner, 19.6% by his wife, Andrea Bronner, and 20% by his son and board member Alexander Mitteräcker. Only 1.5% of shares belong to other private shareholders.

Third, the Fellner family, a contemporarily important family in the Austrian media landscape, currently edits one of the largest free sheets and looks back to a number of economically successful media start-ups in the 1980s and 1990s. Our media sample includes Radio Austria, in which second generation family member Nikolas Fellner is the donor and economic manager of the private foundation that owns 100% of this countrywide radio network.

As in the case of the Fellners, the legal form of private foundations is used by many individual or family owners in the Austrian media business. Indeed, media ownership forms are diversifying throughout the world, and foundations have been one of these emerging models (Sjøvaag & Ohlsson, 2019). While in some countries they are a way to ensure the functioning of news media as market conditions deteriorate (see in this pilot project the cases of Denmark, Finland and Sweden) or hide actual ownership (see Hungary), in Austria they serve a triple function according to literature: a) asset protection: keeping assets, such as media companies, intact and in the control of one entity (e.g., by preventing single members from selling shares in case of inheritance or debt), b)  tax optimisation (especially in holding structures), and c) the (theoretical) benefit of very little public disclosure mandates regarding finances and beneficiaries – although the majority of news organisations choose to publish the names of private foundation beneficiaries in their imprints (Dohrau et al., 2019).

The Austrian media are also highly intermingled with non-media businesses. The biggest private bank, Raiffeisen, owns almost half of Kurier and Profil, while the beverage giant Red Bull has all shareholdings of the most relevant private TV, namely Servus TV. A Catholic private foundation is the single owner of the Styria Media Group, a traditional group that publishes the widely read Kleine Zeitung. Real estate investor René Benko controls almost 20% of Krone, Kurier and Profil by means of the holding Signa, which also has relevant participation of the construction businessman Hans Peter Haselsteiner.

Foreign ownership is also an issue in the Austrian media system. Besides ProSiebenSat1 and Berlusconi mentioned above, the German company Funke Mediengruppe owns some 25% of Krone, Kurier and Profil by means of the holding WAZ Ausland. Furthermore, the Swiss publisher Tamedia holds sizeable shares in Heute (25,5% in the print version and 51% in the online business). Finally, the majority of the shares of Servus TV is in the hands of the Thai family Yoovidhya (49% to the family company TC Agro Company and 2% directly belonging to their heir Chalerm Yoovidhya), although the current control of the channel and the entire Red Bull Media House lies in the hands of Austria’s richest entrepreneur, Dietrich Mateschitz.

As can be seen, although very intricate, media ownership relations in Austria are relatively transparent. Furthermore, the names of direct and beneficial owners of almost all media outlets are available on the website of the news organisation. The exceptions to the rule are: Servus TV, which does not indicate the participation of the family Yoovidhya in the control of the Red Bull; Radio Austria, which omits the private foundation Alpha Zehn Medien and related persons from their imprint(1); and Krone.at, which refers on their imprint only to an intermediary company of the group and links to the imprint of the newspaper, where beneficial owners can be found. All others clearly indicate who are the beneficial owners. Of course, this is due not to the mere willingness of the media companies and owners themselves, but to the Austrian media law (Mediengesetz), which in its paragraph 25 requires news media to disclose direct and beneficial owners on their websites as well as the other media-related companies in which they have participation.

In addition, most of the relevant information to assess who actually has influence in the news production is also available, such as names of managers and editors-in-chief. Figures on circulation of print media and audience of their electronic counterparts are generally disclosed by the national authorities, and revenues are mostly available in the company registers, facilitating the assessment of market power.

Although ownership relations might be relatively transparent in Austria, especially in comparison with other countries, it is important to highlight the risk represented by arrangements such as private foundations. The legal structure of this instrument in Austria allows ownership and control of media companies to be settled in a non-transparent way, even if currently most foundations clearly indicate their controllers. Furthermore, despite general availability of economic and financial data, a lack of transparency of state funding represents a clear risk. This is clearly demonstrated by the amount and allocation practices of public advertising that brought down Sebastian Kurz’s government in 2021. Public prosecution services suspect editorial favours in return for extensive state advertising in a media group’s outlet. At the time of writing (August 2022), the Austrian government discusses new strategies to fund the media in a more equitable and transparent way, but the results of the negotiation are uncertain.

(1) As a matter of comparison, Falter also has two private foundations as ultimate owners, and their imprint mentions them and their respective donors, board, and beneficiaries.

Distribution channels of news

In Austria, distribution channels have little control over news provision. Linear distribution in print and broadcasting is a competitive and well regulated business, whose cornerstone is common carriage. As such, the population has several affordable providers through which they can use their favourite news sources. Internet distribution follows a similar pattern, with high access rate to broadband (Austria figures among the most affordable countries in the EU for high speed internet), a competitive market and high compliance to net neutrality standards, reducing the potential influence of providers in news.

However, risks are increasing over time because of growing news use through digital intermediaries such as search engines and social media. Responding to the Reuters Institute Digital News Report 2021, 41% of the population said to have used a search engine to look for news in the week of the survey, a market dominated by Google (over 90% of searches in the country). Facebook was a source for 31.2% of the population, according to the same panel. WhatsApp (22.3%) and YouTube (20.6%) are further relevant intermediaries (Gadringer et al., 2021). TV is still the main source of news for Austrians, used by 71.2% of the population every week, but Alphabet and Meta services slowly become important players in the distribution of news in the country.

The problem is that, unlike traditional distribution channels, these intermediaries potentially influence the news distribution as they actively promote or downrank content through (mostly algorithmic) moderation. Their criteria to do so are, however, highly non-transparent. When users come across news in these services, there is no information about the reason for the upranking of the content. Following increasing public pressure and the prospective of EU regulation, these intermediaries began to describe some criteria in Terms of Use or similar documents, but often in a very generic way.

A further point of concern is that these intermediaries are increasingly cooperating with news organisations in many countries, celebrating commercial agreements of several types (e.g., direct transference, copyright payments, training and support). For example, Google announced in May 2022 a deal with news publishers in different countries (among them Austria) to license content under the European Copyright Directive. Google will pay publishers for content which goes beyond links and short extracts, and publishers have full control over whether or not and how their content is previewed in Google Search (Connal, 2022). However, often this relation with news organisations is non-transparent. In the May deal, for example, Google does not disclose which Austrian news media benefit neither the agreement figures or whether this has any impact in content prominence of any Google service.

For now, the risks for transparency in control over news are moderate, as the Austrian population still prefers direct access to websites and apps of popular news brands, besides the high use of television. However, if non-linear news use keeps growing and the intermediaries do not limit their influence over news selection or clarify their role, transparency of control over news might sharply decrease in the next years.

Legal framework

Finally, Austria has a rigid legal system on ownership transparency in place. The general media law applies to all sorts of opinion shaping media, both offline and online. They all are obliged by law to disclose their ownership in sufficient detail. Once every year they all have to republish their ownership structure, and changes during the year need to be made public as well. Furthermore, there are obligations for radio and television companies going even further, including the disclosure of shareholder information and beneficiaries in the case of private foundations. Whoever applies for radio or television licenses is required to open ownership books for the regulatory authority in great detail. Such information is, however, not accessible to the public. As mentioned before, public service broadcasting is owned by a public foundation, whereby all board membership is stipulated in detail by the respective law (ORF Law).

However, in practical terms, some Austrian media companies manage to disguise ownership in complex structures, as described above. More specifically, the legal framework does not seem to fully address the issue of private foundations, which are less transparent than other forms of corporate ownership.

Regarding funding, the Austrian media transparency law provides for clarity on advertising and other forms of funding by public institutions. It requires all public institutions to disclose investment in all forms of advertising, including on websites and digital intermediaries, above the minimum amount of €5,000 quarterly. The beneficiary media and the amounts must be revealed. The resulting data is published four times a year by the relevant media regulatory authority.

Austria’s merger and acquisition legislation contains specific provisions for media mergers. To simplify the rather complex regulation, general mergers rules apply equally to media mergers, but thresholds are 20 times lower than those of other economic sectors. In addition, the risks to ownership and content diversity must be explicitly considered when approving or rejecting media mergers. There is formally no space for government intervention in such media merger decisions taken by the relevant cartel courts.

With regard to content moderation on digital intermediaries, Austria has set the communication platforms law into force in 2021, obliging larger digital platforms to install internal mechanisms to enable users to flag unlawful content, according to the penal code. Failure to do so results in financial penalties up to €10 million. For implementation, a legally responsible person needs to be nominated by all platforms exceeding either 100,000 annual users or 500,000 euros in annual turnover. However, the platform law does not specify any provision for transparency in content curation criteria. The national regulatory authority expects that upcoming EU law such as the Digital Services Act (DSA), approved by the European parliament on 5 July 2022, will lead intermediaries to be more transparent in this respect.

 

Final remarks

The Austrian media market can be considered reasonably transparent with regard to ownership and control. Owners of the opinion shaping media are disclosed, and no legal ownership is actually contested or said to be “straw man”. Risks for transparency are moderate. Most news used by the population are provided by traditional media firms and distribution channels, and legacy media institutions and practices are well regulated. But algorithms play an ever increasing role and there are no sufficient provisions so far to ensure that users know who decided the news they should read or watch. Therefore, the legal framework is solid with regard to the legacy media landscape, but certainly needs revision to keep up-to-date with the latest technological and economic developments.

 

References

Connal, S. (2022, May 11). Google licenses content from news publishers under the EU Copyright Directive. Blog Google. https://blog.google/around-the-globe/google-europe/google-licenses-content-from-news-publishers-under-the-eu-copyright-directive/

Dohrau, B., Fahringer-Postl, B., Leyrer, P., Meindl, F., Obermair, B., Zinnöcker, B., & Wieszmüllner, S. (Eds.). (2019). Die Privatstiftung in der Praxis: Kompakt & konkret. dbv-Verlag.

Gadringer, S., Holzinger, R., Sparviero, S., Trappel, S., & Schwarz, C. (2021). Digital News Report Austria 2021. Detailergebnisse für Österreich. Dept. of Communication Studies, University of Salzburg. https://doi.org/10.5281/ZENODO.4775408

Grünangerl, M., Trappel, J., & Tomaz, T. (2021). Austria: Confirmed democratic performance while slowly digitalising. In The Media for Democracy Monitor 2021: How leading news media survive digital transformation (Vol. 1, pp. 95–152). Nordicom. http://urn.kb.se/resolve?urn=urn:nbn:se:norden:org:diva-12102

Hardy, J. (2014). Critical political economy of the media: An introduction. Routledge.

Hindman, M. (2018). The internet trap: How the digital economy builds monopolies and undermines democracy. Princeton University Press.

Seethaler, J., & Beaufort, M. (2021). Monitoring media pluralism in the digital era: Application of the Media Pluralism Monitor in the European Union, Albania, Montenegro, The Republic of North Macedonia, Serbia & Turkey in the year 2020. Country report: Austria. Centre for Media Pluralism and Media Freedom (CMPF). https://doi.org/10.2870/764424

Sjøvaag, H., & Ohlsson, J. (2019). Media ownership and journalism. In H. Sjøvaag & J. Ohlsson, Oxford Research Encyclopedia of Communication. Oxford University Press. https://doi.org/10.1093/acrefore/9780190228613.013.839

Steinmaurer, T. (2002). Konzentriert und verflochten: Österreichs Mediensystem im Überblick. StudienVerlag.

Trappel, J. (2019). Austria. https://medialandscapes.org/country/austria (European Journalism Centre).

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