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Strengthening Public Interest in Ukraine's Media Sector

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Strengthening Public Interest in Ukraine's Media Sector Research Strengthening public Paper interest in Ukraine’s Russia and Eurasia Programme media sector April 2021 Anna Korbut Chatham House, the Royal Institute of International Affairs, is a world-leading policy institute based in London. Our mission is to help governments and societies build a sustainably secure, prosperous and just world. Contents Summary 4 01 Introduction 5 02 Ukraine’s media landscape 8 03 Ukraine’s main media actors 17 04 Influences on Ukraine’s media 29 05 Conclusion 35 About the author 37 Acknowledgments 37 3 Chatham House Summary — The media environment in Ukraine is complex, diverse and competitive. Most of the country’s outlets are privately owned by high-profile Ukrainians who tend to use them for political influence. However, a small number of media organizations uphold high standards of professionalism and integrity and are vital for shaping domestic political and social debate. These are mostly in print and online but also include some broadcasters, such as Suspilne, and international donor-funded multimedia platforms. — Ukraine has a vibrant community of media experts, activists and NGOs that monitor and analyse the sector. These individuals and organizations create development initiatives, advocate reforms and, to a certain extent, perform self-regulatory functions. Platforms for discussions among media professionals are contributing to an evolving industry culture. But they face challenges including limited authority to implement changes; unsustainable funding, often reliant on international donors; and a lack of consensus on ethical and quality standards within the media community. — Many outlets provide content for free and domestic audiences are accustomed to this practice. However, there are efforts in Ukraine to encourage consumers to pay for quality content. From early 2020, the biggest media organizations began restricting free access to their output. Meanwhile, smaller independent media are offering subscription and membership models to improve their economic sustainability. The COVID-19 crisis has pushed media organizations to be more proactive in creating business models that do not solely rely on advertising. — Ukraine’s media landscape is threatened by the disruption of traditional information delivery methods and consumption patterns; fake news and disinformation; a changing media economy; competition from social media and tech giants; and political turbulence and hostile actors, particularly Russia. — Reforms in media regulation – in addition to those in the judiciary and law enforcement agencies – could limit the influence of media owners and protect outlets from political actors determined to attack journalists or manipulate content. Furthermore, support for sustainable revenue models, technological capacity-building and better brand recognition could focus on independent outlets that lack the resources to compete with oligarch-owned media. Improved media literacy efforts are also important for creating long-term audience demand for quality content. 4 Chatham House 01 Introduction While oligarchs and political influence overshadow the media in Ukraine, other stakeholders are seeking to challenge the status quo to improve professional standards, media literacy and public trust. Ukraine’s modern mass media landscape emerged in the 1990s. Since that time, the country has had barely three decades to develop a culture of media production, consumption and regulation. Key factors that have shaped this evolution include a weak and oligarch-dominated economy, the political elite and Russian influence. By contrast, in the UK, the US and most member states of the EU, the history of the modern media sector, its audience and regulation spans well over a century. Ukraine’s experience differs from that of its Eastern and Central European neighbours. After 1991, Western owners had a considerable presence in media organizations in Poland, the Czech Republic and Hungary. While this injected much-needed funds into the post-communist markets and introduced a different professional culture, it also brought about a chaotic boom of media outlets in an unprepared regulatory environment. This often resulted in investors’ commercial interests being prioritized over quality content or the long-term development of a local media culture. According to Angelika W. Wyka-Podkowka, a researcher of media in Central and Eastern Europe, during the transition from post-communism to capitalism in Poland, Hungary and the Czech Republic: Very few companies wanted, in fact, to educate journalists and implement core journalistic values such as professional integrity and reportorial accuracy. Rather, a great majority of them regarded their investments as pure business… It can be argued that the central narrative characterizing the media transformation of Central Europe after 1989 has been the narrative of commercialization and tabloidization.1 1 Wyka-Podkowka, A. (2014), ‘Twenty-Five Years after the Fall: From Communist Monopoly to Foreign Control over Local Owners: Media Ownership and Its Effects on Journalism in Central Europe’, The Political Economy of Communication, 2(1): pp. 33–48, https://www.polecom.org/index.php/polecom/article/view/29/207. 5 Chatham House Strengthening public interest in Ukraine’s media sector Overseas investment in these countries began to change in the 2000s, especially after the 2008 financial crisis, when investors started to leave and subsequently sold their media assets to local owners. Martin Ehl, chief analyst of Hospodářské noviny, a Czech economics outlet, and Václav Štětka, a lecturer at Loughborough University, summarized the process in their piece for The American Interest in 2018: [W]e can conclude that foreign ownership can play a positive role in shielding independent journalism… But when bad economic times hit, the same foreign owner will care only about making a quick and painless exit from the market. Prevailing foreign ownership has also meant, historically, that profits have been channelled out of Central European countries without contributing to the broadening of the base of independent media. This has ultimately left media in Central Europe weak, easy prey for oligarchs and vulnerable to external pressures.2 Ukraine has not had a comparable level of investment from Western media organizations or individuals. This created an opportunity for oligarchs to dominate the sector, which is a trend that is also now emerging in the media markets of the Czech Republic and Hungary. As Western investors leave Central and Eastern European media markets, and the sector faces serious profitability and sustainability challenges around the world, it is unlikely that Ukraine will attract new media investment from overseas in the short term. For the most part, Ukrainian oligarchs operating in the media sector did not establish the outlets and organizations they now own. State media institutions, US investors, Russian companies, and local media professionals and journalists established and co-founded the most popular broadcasters. For example, ICTV, a channel that is now part of Victor Pinchuk’s StarLightMedia, was started in 1991 by the Ukrainian Broadcasting, Radiocommunications and Television Concern (BRT) and Story First Communications (CTC Media after 2004), a Russian private company originally registered in the US. Meanwhile, the initial co-owners of Ihor Kolomoisky’s Studio 1+1 included Oleksandr Rodniansky and Borys Fuksmann as well as US-based Central European Media Enterprises Ltd. Oligarchs gradually bought up and established control over these media assets in the 1990s and 2000s. As the oligarch-owned media companies developed, they dwarfed the national public broadcaster (the various predecessors of Suspilne) in terms of outreach, quality of content and resources. These powerful organizations are entrenched players in Ukraine’s media scene and continue to impede the evolution of a domestic media culture. 2 Ehl, M. and Štětka, V. (2018), ‘When Oligarchs Buy Media: A Central European Tale’, The American Interest, 30 November 2018, https://www.the-american-interest.com/2018/11/30/when-oligarchs-buy-media-a- central-european-tale. 6 Chatham House Strengthening public interest in Ukraine’s media sector As Western investors leave Central and Eastern European media markets, and the sector faces serious profitability and sustainability challenges around the world, it is unlikely that Ukraine will attract new media investment from overseas in the short term. Moreover, the experiences of Central European media organizations in receipt of Western investment show that such funding models do not guarantee the long-term sustainable development of a country’s media environment. A particular challenge is preventing investment from Russian media organizations, which tend to discourage high-quality independent journalism, prudent media practices or unbiased content. While the role of oligarchs overshadows discussions about the media in Ukraine, the political elite, civil society, journalists, editors and the media watchdog community are also important actors in the sector. This paper documents the main media sector developments in Ukraine since 2014 and examines the current landscape and key stakeholders – from oligarchs and politicians to the audience and civil society. It looks at new projects and experiments in the field that could eventually benefit the domestic media environment. This includes efforts to improve the country’s culture of media production and consumption, and proposed changes
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