The economy and its impact on the media landscape in Germany

Germany is the largest economy in Europe and the fourth largest in the world, making it one of the world's leading economies. The economic system is based on the social market economy, which combines elements of capitalism with social security. Germany's economic strength is based on a robust industrial base, a strong SME sector and a significant export industry. In 2023, Germany's gross domestic product (GDP) totalled around 4.1947 trillion euros. This corresponds to a GDP per capita of around 49,542 euros. By comparison, GDP in the EU in 2023 was 16.97 trillion euros and 37,594 euros per capita. 

Further comparative figures:

• United Kingdom: 3.332 trillion euros
• France: 3.049 trillion euros
• Italy: 2.328 trillion euros

The unemployment rate in Germany is around 5.8 per cent, with regional and seasonal differences. 

In 2023, the total debt level of public budgets as defined by the Maastricht criteria (national debt) was over 64 per cent of gross domestic product (GDP), which is moderate by international standards. The federal government has the highest debt. It accounts for around 70 per cent of national debt. This is followed by the federal states with 24 per cent. The debts of the cities and municipalities account for 6 per cent. 77 per cent of the federal government's creditors are based in Germany and the eurozone, while 23 per cent come from third countries. 

German import and export

Germany is a strong export nation. German industry plays an important role. At 26.6 per cent, the share of industry in Germany's gross value added is the highest of all G7 countries. The most important German export goods include vehicles and vehicle parts, machinery and equipment, chemical products, electronics and electrical engineering products as well as metals and metal goods. Alongside China and the USA, Germany is one of the three largest exporting nations. 

Measured by the importance of foreign trade for gross domestic product (GDP), Germany is the most open economy of the G7 countries. The foreign trade ratio is 98.6 per cent - this is the sum of imports and exports in relation to GDP. Germany thrives on the free exchange between countries, promotes this and advocates open, equal relations on an equal footing with all countries. Alongside other European countries, the USA and China are Germany's most important trading partners. In 2022, Germany exported goods worth 1,576 billion euros. The export ratio was 50.3 per cent. 

However, Germany's true strength lies elsewhere: the heart of the German economy beats in the SME sector. This refers to the 3.5 million companies in Germany with an annual turnover of less than 50 million euros and fewer than 500 employees. They represent 99.3 per cent of all companies in Germany. Almost 1000 of them are "hidden champions", i.e. world market leaders that are little known to the public. 

The most important imported goods are vehicles and vehicle parts, crude oil, natural gas and other energy sources, electronics and electrical engineering products, chemical products, textiles and clothing. 

Economic situation of the media industry

The media and entertainment industry in Germany is a smaller but nevertheless important sector of the economy. Turnover in the German media market totalled around 71 billion euros in 2023. This corresponds to less than 0.2 per cent of GDP. There is a wide range of newspapers and magazines, from regional daily newspapers to national magazines. There are currently almost 336 newspapers published in Germany in print or as digital e-papers with a total circulation of 12.8 million copies per publication day (IVW: 1st quarter 2024). 

The focus is on the 318 mainly local and regional daily newspapers as well as the 16 weekly newspapers and two Sunday newspapers. The respective circulation figures vary depending on the publication. Some of the best-known daily newspapers are Bild, Süddeutsche Zeitung, Frankfurter Allgemeine Zeitung and Die Zeit. 

The German television market is dominated by public broadcasters such as ARD and ZDF and private broadcasters such as RTL, ProSieben and Sat.1. 

There are a large number of radio stations, including public broadcasters such as Deutschlandfunk and Deutschlandradio Kultur, as well as private stations such as Antenne Bayern and Radio Bob. 

The digital media market is growing steadily. Online news portals such as Spiegel.de, Focus.de and Tagesschau.de are popular. Social networks such as Facebook, X (formerly Twitter), Instagram and YouTube also have a major influence on opinion-forming, especially among the younger generations. 

The financing of news media and journalism has changed considerably in recent years. Traditional business models based on the sale of advertising space, classified adverts and the sale of media at newsstands have sought equivalents in the digital world. In addition to reach marketing, many media now also rely on digital subscriptions and participation in classified advertising markets that are independent of journalism. Digital offerings have become more popular in recent years.

Main players in media financing

The federal and state governments, as well as the EU, provide funding for certain media projects and initiatives, particularly in the area of cultural and educational programmes. These funds are allocated according to transparent criteria in order to minimise political influence. Freedom of the press is enshrined in the German constitution, which is why no financial support is provided for journalistic content; instead, funding is limited to structural support, e.g. for journalism schools. Some funding programmes are also managed by the state media authorities, which are independent of the state.

Public service broadcasting, financed by the licence fee, plays a central role in the German media landscape. ARD, ZDF and Deutschlandradio are the main players and enjoy far-reaching independence thanks to the funding provided by the licence fee. Nevertheless, some sections of the population dislike the licence fee, which is criticised for the obligation to pay and the way it is used.

Political parties are also invested in media and publish their own party magazines. The Social Democratic Party of Germany (SPD), for example, has an investment structure that includes several German daily newspapers and radio stations. 

Advertising remains one of the most important sources of revenue, especially for commercial TV stations and online platforms. Large advertisers such as car manufacturers, consumer goods companies and technology companies play a central role. Philanthropy is becoming increasingly important in media financing: foundations and philanthropic organisations are increasingly supporting investigative journalism and independent media projects. For example, the Bill and Melinda Gates Foundation is funding a Spiegel reporting project and the Correctiv research collective receives donations from many foundations, including the Schöpflin Foundation, the Mercator Foundation and the Madsack Foundation of publishing heiress Sylvia Madsack.

The type of financing can have an impact on the independence and quality of reporting. For example, advertising and subscriptions offer a certain degree of financial stability, but can also lead to conflicts of interest if commercial interests compromise editorial independence. Philanthropic funding and government support can also create dependencies, although they often have a less direct impact on reporting.

The traditional advertising market is shrinking

The advertising market in Germany has changed significantly in recent years, particularly as a result of the shift from traditional media to digital platforms. This has had a significant impact on media companies' sources of income. In 2023, gross advertising investment in Germany totalled around 33.81 billion euros. Compared to the previous year's figure, there was a decline of almost three billion euros. 

At more than 16.5 billion euros (2023), television was by far the largest advertising medium. Newspapers followed with the next largest gross revenue from advertising at 5.5 billion, while cinema accounted for the smallest share at 118 million. 

The growing importance of digital advertising has led to increased concentration in the market, with large technology companies such as Google and Facebook accounting for a significant proportion of advertising expenditure that was previously spent on traditional advertising on TV, radio, newspapers and magazines. 

Main trends and changes in media financing

Commercial broadcasters such as RTL or ProSieben and Sat.1 rely heavily on advertising revenue. Public broadcasters such as ARD and ZDF are benefiting from stable licence fees. Traditional newspapers and magazines are struggling with declining circulation figures and are looking for new sources of income, such as digital subscriptions or paywalls. Local and regional radio stations continue to rely on advertising, but are also struggling with competition from streaming services. Digital platforms such as Spiegel.de and Zeit.de have successfully established themselves as important news sources and combine advertising and subscriptions as sources of revenue. 

The big winners in this development are digital and hybrid media models that can react flexibly to changes in consumer behaviour. The main losers are traditional print media, which are finding it difficult to adapt to the new market conditions.

Influential news media

Public broadcasters retain their leading role, while specialised news channels such as n-tv and Welt are becoming increasingly important. The "Tagesschau" format in particular reaches a large proportion of the population both linearly and digitally. Quality newspapers such as Frankfurter Allgemeine Zeitung (FAZ) and Süddeutsche Zeitung (SZ) are increasingly focussing on digital subscriptions and premium content. Platforms such as Politico Europe and Handelsblatt offer specialised journalism for political and economic elites and are financed by subscriptions and advertising.