The Press Market in Austria

1. Overview
Austria is one of the smaller countries within Europe and the EU. With a population of around 8,2 million, publishers can economically cover the press market pretty well with local, regional and national newspapers; however, the majority of the magazine side is made up by imports. Around 58% of the titles on offer are foreign, the majority from Germany (80- 85%). The foreign population in Austria is at around 10%;mostly nationals from Former Yugoslavia, followed by Turkey and Germany. The country is an important touristic destination (the tourism sector adds up to 9% of GIP, one in ten of the current work force works in tourism). Almost 60% of the foreign tourists are from Germany, 10 % from the Netherlands. Tourism has always been responsible for a balance of payments surplus, while the industrial sector first reached a positive balance of trade in 2002. Austria enjoys a strong winter and summer tourism. Among the cities Vienna (62,3%), Salzburg (13,4%) and Innsbruck are the main attractions. The major skiing resorts lie within the states Tyrol, Salzburg, Kärnten and Vorarlberg;certain glaciers even offer the possibility to do winter sports all year round. Besides, also the job migration is a reason for the sales increase of German publications. The same holds true for Turkish, Serbian and Croatian titles.

2. Press concentration
Compared to other European markets, Austria is highly concentrated. A few publishing houses and wholesalers dominate the market with press products. The Austrian media landscape is dominated by two groups, the Publishing Group News and the Mediaprint AG;both are closely connected to German holdings. The government tries to counter the problem of press concentration by offering financial support to certain publications. The state press subventions were introduced in 1975 and have been amended in 2004. A model based on three pillars has been introduced, focusing on three goals: the promotion of distribution, the specific promotion for maintaining the regional variety of dailies as well as the promotion of quality and future sustainability. With regard to the stake of foreign publishing groups in Austrian publishers, the state press support enjoys a high acceptance, but it is debatable from a competition policy point of view.

3. Press distribution
3.1 Press retail
The retail network counts more than 12.000 sales points, of which however about 3.000 offer only daily newspapers, while around 10.000 offer foreign publications. Austria has a density of sales points that can be compared to Germany; only Scandinavian countries have an even stronger network. The most significant type of retail are the so-called «Trafiken» (tobacconists). These were originally tobacco shops, but today also offer press, writing material, postcards and other small products and also accept lottery coupons. Licenses for tobacconists are announced by the state monopoly administration (Monopolverwaltung GmbH), which surveys the prohibition of advertising and discounts and the exclusivity of the sales territory. From the very beginning (Emperor Josef II introduced the monopoly on tobacco in 1784) war veterans, soldier widows and inocently poor civil servants were given tobacco outlets as a living. Still today, disabled people are considered first when a license is handed out. Tobacco makes up for only about half the revenue of the over 8.500 tobacconists. After Norway, Austria is second within Europe in the density of supermarkets. Besides the traditional local brand Julius Meinl there are also the market leader Spar (with the hypermarkets Interspar), the German REWE (Billa, Merkur, Penny), and the classic discounters Lidl and Aldi, the latter under the name Hofer, active in this market. Retail chains such as Billa, Spar and other discounters have only a very limited range of titles and are therefore not a big support to the variety in press products. Nevertheless, press sales are increasingly moving from the tobacconists to the supermarkets and petrol stations. Following the German example, a survey has been carried out in Austria which contains information on the retail structures and their main characteristics.

3.2 The press wholesale trade
Retailers get their delivery from three wholesalers, each of whom delivers the whole Austrian territory. Austria doesn’t have territorial exclusivity as in Germany, but division by products. This means that a particular title is distributed by only one wholesaler across the whole territory. All wholesale companies act as national distributors and as wholesalers for national and imported titles. In the field of logistics there exists a cost-efficient co-operation. The company Morawa Pressevertrieb GmbH is based in Vienna and was founded in 1877. It is a privately owned company delivering to around 12.000 sales points and has about 50 press shops of its own. Besides press their shops also offer a large range of books. Morawa also has its own outlets at train stations and airports. Pressegrossvertrieb Salzburg GmbH was founded by the Waldbauer family, and was later acquired by the Burda brothers. Besides local press it offers mainly German magazines and delivers around 3.000 titles to about 10.000 sales points. Three years ago it was taken over by the Swiss Valora AG. The company Mediaprint Zeitungs- und Zeitschriftenverlag Ges.m.b.H. & Co. KG is a subsidiary of the two largest Austrian daily newspapers Kurier and Kronenzeitung, half of which in turn is owned by the German WAZ group. Its activities are the distribution and home-delivery of daily newspapers.

4. Structural characteristics
In many aspects, but not all, the Austrian distribution system can be compared to the German one. Considering the high percentage of German publications this is not surprising. The main characteristics of press distribution are:

• Territorial protection: there is no territorial exclusivity, all wholesalers are active across the entire country.
• Exclusive distribution: division by product, only one wholesaler per title, defined by contract
• Price maintenance: the legal price maintenance no longer exists, but it continues to be respected
• Right of returns: unlimited right of return, the majority of publications are handled without physical returns
• Market entry: entry into the market is free
• Right of disposition: is with the wholesalers. Exception:retail chains with fixed range of products

Edited by presstrends GmbH, ith the contribution of Martina Thiele, University of Salzburg