Two ways to break a media market
Austria subsidised its media market into stagnation, Hungary repressed its own into innovation. Both are now trying to redefine the role of the state in their information ecosystem.
The train ride between Budapest and Vienna takes somewhere between two and a half hours and eternity, depending on the season, the operator’s mood, and whether Mercury is in retrograde. One of us lives in Vienna, the other in Budapest, and we travel between our cities often enough that delayed trains have become both a recurring source of irritation and material for jokes that some parts of the former Habsburg empire still consider “too soon”.
The two countries share a train line, a border, several excellent dishes, and media systems in which the state matters enormously. Both struggle with political influence over advertising, the role of the public broadcaster, and the design of government support for journalism.
In Austria, these instruments were used mostly to stabilize. The result is a deeply conservative media market: subsidized incumbents, generous public advertising, weak incentives to innovate, and a striking absence of new digital-native challengers.
In Hungary, especially over the past sixteen years, similar instruments were used to subdue the information ecosystem. State advertising and political pressure on private advertisers were used intentionally to starve independent outlets. Public media became a weapon of mass deception. The regulator mostly served to legalize politically motivated media capture. Independent media were pushed into scarcity and, because of that scarcity, into experimentation.
Both countries are now redesigning their information ecosystems.
Austria wants to reform before its soft dependencies harden into something worse. In Hungary, the regime that captured most of the media space has collapsed, and the new government has to decide what to do with the ruins.
We think the two debates would benefit from listening to each other. This is our attempt to start that conversation.
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Subsidized stagnation or authoritarian innovation
Austria distributes media support through two channels. The first is direct subsidy: around €80 million per year in formal media funding. The second is public advertising: €418 million in 2024, spent by federal ministries, federal state governments, chambers, and public enterprises. For comparison: Austria spends roughly nine times more on government advertising than Germany does, for a media market a fraction of the size.
Every existing subsidy is tied to a minimum number of years of existence, which means new media organisations cannot access public support at all. The dominant metric is economic size, which means larger outlets receive proportionally more, reinforcing market concentration. Two thirds flow through processes directly exposed to political discretion.
The advertising side drew sustained criticism, both domestically and from the European Commission, which raised concerns about the scale of public spending and the fairness of its distribution. The corruption scandal around former Chancellor Sebastian Kurz showed that it was an instrument of editorial influence rather than public communication.
In Hungary, there is no Austrian-style subsidy architecture to speak of. The Fidesz government had no interest in transferring public money to outlets it did not control, and the outlets it did control did not need a formal subsidy system because they had something better: a completely weaponised advertising market.
Loyal outlets received state advertising on a scale entirely disconnected from their actual audiences; independent outlets, regardless of reach, received nothing. Private advertisers, particularly in regulated sectors, learned quickly that spending money with 444, HVG, Telex or 24.hu created political and regulatory exposure they did not want. Total government advertising spend since 2015 exceeds one billion euros, almost all of it directed by political logic rather than market logic.
The two systems, unsurprisingly, produced very different outcomes.
The last serious wave of new entrants (private radio and tv stations) to the Austrian media market arrived in the mid-1990s with the liberalisation of broadcasting. The incumbents are protected, the print sector is propped up, the public broadcaster is comfortable, and the few attempts at digital-native journalism operate at the margins of a system that was never designed to make room for them. Austria has lost roughly a third of its journalism jobs in two decades, from over 7,000 in 2006 to well under 5000 today, and yet the structure of the market has barely shifted.
In Hungary, the advertising-market interference was followed by media capture and extreme levels of consolidation: according to some estimates up to 80% of the scene got captured with entities like the government aligned Central European Press and Media Foundation controlling 470+ outlets alone.
Those who did not want to become a cog in the government comms machinery had to choose between innovation or going out of business. Lots of people lost their jobs. The outlets that survived did so by becoming digital-only, audience-funded, and structurally lighter than a lot of their peers in the region. Print, with its overheads and its vulnerability to distribution pressure, is essentially gone as a serious business or political force. The major independent outlets and a long tail of regional and vertical players are digital natives with diversified revenue streams: some advertising, audience revenue, paywalls, memberships, events, book publishing and in several cases the 1% income tax redirection mechanism.
The Austrian outcome is a market that does not produce challengers because it does not need to. The Hungarian outcome is a market that produces challengers because it had no other option, but at the cost of losing a lot of great people and newsrooms to intimidation and capture.
Hungary’s three layers of reform
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