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Digital Economy & Media Development Serbia Assessment report 2018 03 EXECUTIVE SUMMARY The main objective of this assessment is to l What are the key impediments to investment but results indicated serious problems and analyse the digital media landscape in Serbia, they face? obstacles related to media operations. with the aim of outlining the potential for future l How do they see the audience shifting and investment in communication start-ups, media market opportunities? There has also been no significant progress in digitalisation and tech solutions; to support the economic domain. Serbia has one of the l What export and regional opportunities are content production and pluralism; and to lowest average rates in the region, but also there? provide evidence-based guidance on which the a high unemployment rate, especially among l Thomson Foundation can develop its strategy How are they relating to other areas of the young people. Only the ICT industry performs for media support in Serbia. conventional media market? positively, when taking into account export and import figures. Serbian competitiveness The assessment methodology combined As the main contextual factors driving the is among the lowest in the region of south- available secondary data (reports, analyses, process of digital media development, this east Europe. The most problematic areas for existing assessments) in the area of media and assessment takes into account the political doing business in Serbia include tax rates, digital economy, publicly available raw online situation, macroeconomic trends, the media government bureaucracy and inefficiency, data (Eurostat, UNESCO, Eurobarometer), situation and the expansion of the digital access to financing, corruption and tax and 14 in-depth interviews with representatives economy and ICT sectors in Serbia. regulation. of Serbian institutions, private and digital economy sectors, international community The political situation and democracy scores Freedom of expression and media freedom and media outlets. Additionally, information for Serbia have continuously deteriorated over are among the biggest concerns. The media has been collected through informal meetings the last four years. Governance performance market is underdeveloped, monopolised and with representatives of the media, and through has slightly decreased in recent years, and controlled by politics and private interests. participation in different media and digital in comparison with other countries of the Television dominates the market, and is still the economy-related events in Serbia. region Serbia is ‘mid-developed.’ Corruption most popular type of media. Serbian audiences remains a serious problem that affects public increasingly read news online. Serbia is among The following research questions will guide and economic life, and limits the possibility of the countries with the lowest level of trust in the the assessment: further reforms. Serbia is top-ranked, along with media. Croatia, when it comes to media clientelism, l What are the key investments needed to grow? 03 The Serbian digital economy is on the increase, sectional partnerships. opportunities should take into account the ICT is becoming the wealthiest part of its following: economy, but most initiatives come from the Key impediments for development: l Serbia is perceived as an incubator, a private sector. While broadband is still in its l Broadband is underdeveloped and there is a test-ground for different innovative ideas and early stage of development, Serbia is among huge gap between urban and rural areas. patents. global leaders when it comes to mobile phone l Current regulation does not provide l There is a limited or ‘no production’ for subscribers. The Internet speed in Serbia favourable funding conditions for SMEs, start- outside markets. Serbia is mostly outsourcing, is much slower than in Europe (almost 7 ups and media organisations. developing technologies or providing support to times) and 2 to 3 times more expensive per l Current state of the media and media big global companies. megabyte of data transmission. Due to the freedom is not in favour of development, since l The Serbian market is small and bad infrastructure, most of the ICT business is most of the actors are struggling to survive. underdeveloped, especially the traditional located in the big cities of Belgrade, Novi Sad media market. and Niš. Serbia has the highest number of start- l Mindset and stigma of failure are big ups in the region, but their survival rate is low. obstacles for developing a business culture l There are significant external influences on There is a lack of continuous and substantial within business and media sectors. the way in which media content in Serbia is financial support for business, in the domains of created and presented to the public. research, pre-seed and seed phase. When it comes to the media audience, there are several important trends and Relations to other areas of the conventional The priority domains which the media observations which need to be taken into media market: need investments to succeed in the digital account: l The state of Serbia is preparing a new environment, include the following: l There are dramatic changes in the Serbian strategy for media sector development that will l In order to establish feasible operation audience, and media react only modestly to it. consider digital economy as an important driver. models, the media in Serbia need a friendlier l There is an increasing gap between ‘old l While the state is a dominant actor in the business environment, appropriate regulation audience’ and digital natives. traditional media market, it lags behind private and funding opportunities. l There is a lack of a research culture, and the sectors in the digital economy. l Their staff need more know-how, digital skills media - including start-ups - rarely use research l Only a few media organisations – mostly and continuous mentoring to grow. to target their audience, tailor the content and those operating on digital and online platforms l In order to develop their internal capacities develop their business plans. – prioritise the development of their business further and to maximise their influence, the models over independent status and content media need to network and to establish cross- Perspectives on export and regional production. 04 04 05 1. INTRODUCTION This assessment has two main objectives: “The current A case worth mentioning in this context is ICT l The first objective is to overview and analyse Hub Serbia. This start-up eco-system which the digital media landscape in Serbia, its current political and promotes the development of small businesses, development, shortcomings and obstacles, recently started to support Serbian media with the aim of outlining the potential for future economic through its media accelerator. In collaboration investment in communication start -ups, media situation in with USAID, it will provide support through digitalisation, and tech solutions in the domain knowledge, mentoring, developing hubs, of communication; to support content production Serbia is not establishing partnerships and supporting and pluralism. in favour of business models. l The second objective is to provide evidence- Assessment team, questions and based guidance on which the Thomson media methodology Foundation will develop its strategy for the next The Assessment Team consisted of a team 10 years in this field. development” leader and two specialists – one in the domain of digital media, and the other in the digital Context: Political, economic and Most of these are currently on standby, due to economy and entrepreneurship. The Team organisational factors an inadequate regulatory and legal framework, undertook the work required to produce a report The current political and economic situation in which needs to be adjusted to the market and that will assess the state of the Serbian digital Serbia is not in favour of media development. trends in the IT sector. media sector, paying attention to the business State capture, widespread clientelism, and aspect of media operations, the effects and constant decrease in media freedoms are usually There are several substantial initiatives coming potential relating to digitalisation, opportunities cited as the main problems and obstacles (EU from the private sector which significantly shape and needs for investments in infrastructure, Progress reports, IREX Media Sustainability the Serbian digital economy, such as the “Digital capacity-building and content production. Index, Freedom House, Reporters without Serbia Initiative”, a non-profit private partnership Borders, etc.). Economic and market conditions launched by the leading tech companies in The purpose of the assessment will also be are not in favour of developing sustainable Serbia. Its mission is to focus on improving the to highlight urgent problems when it comes to media, (politically and economically - in terms framework and eco-system required to enable potential external support for media and media- of ownership interest) which will produce and tech entrepreneurship and digital innovation in related business development, as well as the distribute content that is of high quality, fact- both industry and education in Serbia. needs and possibilities for investment and checked, reliable and trustworthy. partnership. The founding members of the initiative are On the other hand, the Serbian digital economy Infostud, Microsoft, Nordeus, Price Waterhouse
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