Media Landscapes in Central Europe 25 years after Transition
Since 1989, the media systems in Central and Eastern Europe (CEE) have generally been in a state of flux. The initial transition period, marked by the liberalization of markets and “spontaneous privatization” in both Hungary and the then-Czechoslovakia, was followed by a long and winding process of consolidation. The impetus for change came from a vision to shape institutional framework and journalistic culture after “Western” models.
However, most scholars and observers agree that this process has never been fully completed. The particularities of the post-communist transformation and the legacies of the past left their marks on the building of democratic media systems in this part of Europe; systems which have fallen short of the normative expectations emphasized at the beginning of the transition.
Regardless of concerns about the public service media’s political dependence, lack of journalistic professionalism, and increasing political parallelism, media systems in Central Europe enjoyed a time of brief stability around the mid-2000s. This steadiness can be attributed to the benefits of EU accession and the subsequent period of economic growth.
Retrospectively, it turned out to be the calm before storm. Media in the region was soon hit by two macro-structural trends which significantly shattered the still-unsettled architecture of the CEE media systems: the rise of the internet and digital technologies, and the global economic recession. Their impact, both separate and combined, has been felt across all platforms. It has unleashed a wave of changes in media landscapes and the end is still nowhere in sight. This is especially true when regarding print media and their ownership structures.
As recent political developments in the region have progressed, in the case of Hungary the ascent of populism and authoritarianism, even more challenges are being hurdled at professional journalism. In particular, public service broadcasters have encountered many obstacles when dealing with increasing political pressure atop of their ongoing struggle to redefine their mission in the digital age.
The Impact of the Internet
Arguably, over the last ten years and across the world, the rise of online technologies has been the key driving force for profound transformations in the communication and media environment. In this respect, CEE has been largely following and absorbing trends and processes affecting other countries. This is particularly so with the decline of newspaper circulation being a direct consequence of the changing news consumption patterns, with more and more people seeking information online.
In countries like Denmark, Finland, Australia, and the U.S., according to this year’s Digital News Report by the Reuters Institute, online media have surpassed television as the main source of news for people. In these countries, the importance of print is quickly diminishing and starting to trail even behind social media. This trend is mirrored in the plummeting of newspaper circulation and sales numbers; according to World Association of Newspapers and News Publishers, sales of European newspapers have fallen almost a quarter in the past five years, which is more than in any other region.
In the V4 countries, where the negative impact of the internet on newspaper markets has only been intensified by the long-term effects of the 2008/2009 financial crisis, some titles have suffered even deeper losses. Circulation of the still-leading Hungarian political daily newspaper, Népszabadság, has been halved since 2009 and currently stands at around forty thousand copies, a mere quarter of the numbers the daily used to claim in mid-2000s.
A similar drop has affected Gazeta Wyborcza, the once highest-selling newspaper in Poland, which went down from more than half a million copies in the early 2000s to under two hundred thousand in the past few years. In the Czech Republic and Slovakia, newspaper circulation has been declining by 7-10% per year. Mladá fronta DNES, the biggest Czech quality daily, is currently selling half as many copies (around 150,000+) as in 2007, similarly to the overall market leader Blesk (at 240,000+ copies). The Slovak daily SME has suffered a drop of 20% in circulation in last year alone.
It could be argued that the decline of print-news readership is being compensated by users accessing their internet platforms. For example iDnes.cz is the online version of Mladá fronta DNES and it claims over 4 million unique users per month, making it the top Czech online news portal. But these gains have so far not translated into generating adequate revenues for the publishers. This has been accredited to the fact that neither digital advertising nor online subscription models have been able to offset the losses incurred by print papers. According to a recent study, digital-only subscriptions represent approximately 10% of the news companies’ total circulation/publication revenues, and “every one dollar gained in digital advertising has resulted in loss of seven dollars in print.”
In the global hunt for innovative solutions to help publishers adapt to the new digital environment, Central Europe has been on the forefront with the birth of Piano, an original country-wide paywall system developed by two Slovak online media entrepreneurs, Marcel Vašš and Tomáš Bella. Since its 2011 launch in Slovakia, where it is still being used by several major publishers, the system has been exported with mixed results.
In Slovenia, the national paywall based on Piano was taken down in February this year following unsatisfactory results; however, it seems to be alive and well in Poland although some publishers have been using their own subscription models alongside the national paywall. In the Czech Republic and Hungary, on the other hand, only a handful of publishers have opted for an online subscription model, which means that the majority of online news content continues to be available for free.
Changing Media Ownership: New Patterns and Risks
The decline of revenues following the impact of the internet as well as the global economic recession resulted not only in the search for new business models but also in significant changes on the map of media ownership in Central Europe. In fact this has been the most significant period since the arrival of Western investors in the early 1990s. During that time, a large number of print media in the region was owned by German, Austrian, Swiss, as well as Scandinavian companies; their presence and share of the market has notably shrunk during the last several years.
Although the initial wave of departures was prompted by the effects of the recession on the advertising market, the process has not stopped even after the economy started to grow again. With the exception of Poland, it has even intensified in the other V4 countries – several major publishers were transferred to the control of local investors.
Arguably, the most illustrative example of this process is the Czech Republic, where the reversal of ownership patterns from international to local proprietors was among the most dramatic of all CEE countries. The Czech Republic used to be a country heavily dominated by foreign media ownership before the crisis, with the share of foreign investment in many of the media segments reaching up to or even beyond 80%. Today, there are no foreign investors among the newspaper publishers. Instead the press and part of the broadcasting media scene are divided among a handful of Czech billionaires with little or no previous experience with the media business.
The one receiving the most attention is clearly Andrej Babiš, the current Deputy Prime Minister and Minister of Finance as well as the owner of the Agrofert Group: the biggest food processing and agricultural corporation in the country. Having acquired the media house MAFRA in 2013 – shortly before the snap Parliamentary Elections – from the German Rheinische Post group, he became the leading media mogul in the Czech Republic: controlling two national newspapers, a chain of regional news weeklies, and a nation-wide commercial radio station.
The intertwinement of business, media, and political interests has been one of the defining features of the new type of local ownership recently replacing the transnational capital across CEE. But such an explicit concentration of political, economic, and media power in the hands of one person is simply unprecedented, not only in the Czech Republic, but also in the region as a whole.
Even if the case of Mr. Babiš is exceptional, the increasing involvement of business tycoons in media markets causes concerns about the editorial autonomy of these titles. It becomes more worrisome when the powerful proprietors state that their primary motivation for investing in media is not the quest for financial profit.
This has been confirmed by Marek Dospiva, the co-owner of PENTA, one of the largest investment groups in the Czech Republic and Slovakia. He has recently purchased one of Slovakia’s biggest media houses, Petit Press, as well as the publisher with a monopoly on Czech regional daily newspapers, Vltava-Labe-Press. Following a journalist’s question regarding their plans to invest in media, he replied “I am not going to beat around the bush: the fact that we own media gives us the assurance that it will be more difficult for anyone to attack us.” This notion of media as a security tool, or an instrument of deterrence against potential enemies, is obviously in direct contradiction to the normative ideas about journalistic independence and the ascribed role of media as “watchdogs” for democracy. It represents perhaps one of the biggest disillusionments from the post-transformation development of media systems in CEE.
Public service media under pressure
With the current crisis of commercial models in news media struggling to secure financial sustainability in the online environment while also combating the utilitarian intentions of new proprietors, there seems to be an even greater need for public service media to adhere to their principles. It is more pressing than ever that they safeguard the survival of professional journalism and maintain its independence from political or business pressures. However, in the CEE region, this is easier said than done.
Given the notorious politicization of public service broadcasting (PSB) organizations, which have never been allowed to fully escape from partisan or governmental influence, the initial hopes of transferring the BBC model to this region seem naïve and unrealistic. Of course, not everywhere is the situation as grim as in Hungary, where PSB has been directly controlled by the state and effectively turned into a mouthpiece of Viktor Orbán’s authoritarian regime. But even in other countries, public service television has been getting into trouble.
In Poland and Slovakia they have had to cope with the loss of audiences and budget cuts. In the Czech Republic they have had to deal with populist-motivated calls from various political actors for the suspension of licence fees or even privatization of the PSB; these attacks are being spearheaded by the current President Miloš Zeman and his allies. So as new challenges have been piling on to still-unresolved issues, the search for institutional stability, professionalization, and structural independence, the defining struggle in the history of not just public service broadcasting but of media systems in Central and Eastern Europe in general, is clearly far from over.
The author is Senior Researcher and Head of the PolCoRe Group at the Institute of Communication Studies and Journalism, Faculty of Social Sciences, Charles University in Prague.