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Sustainability of Professional Journalism in the Media Business

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Sustainability of Professional Journalism in the Media Business EXECUTIVE REPORT SUSTAINABILITY OF PROFESSIONAL JOURNALISM IN THE MEDIA BUSINESS ENVIRONMENT OF THE WESTERN BALKANS Authors: Sanela Hodžić and Brankica Petković Language editing: Stephen Yeo, Michael Randall and Toby Vogel This report is based on the Study that has been carried out by a team of researchers including: Lead researcher: Brankica Petković, Peace Institute, Ljubljana, Slovenia Regional researcher: Sanela Hodžić, Mediacentar, Sarajevo, Bosnia and Herzegovina National researchers: Ilda Londo, Albanian Media Institute (Albania), Vesna Nikodinoska and Slavčo Milenkovski, Macedonian Institute for Media (North Macedonia), Vladimir Kostić, freelance journal- ist (Serbia), Sanela Hodžić and Anida Sokol, Mediacentar Sarajevo (Bosnia and Herzegovina), Daniela Vukčević, Montenegrin Media Institute (Montenegro), and Jeton Mehmeti, GAP Institute (Kosovo*) Research conducted: June-November 2019 Report published: June 2020 This research reflects the economic position and needs of independent media outlets in 2018 and 2019, with the majority of market data pertaining to 2018 and research being finalised in November 2019. The report does not cover the dramatic changes occurring in 2020, when the economic consequences of the COVID-19 pandemic dealt yet another blow to media businesses and further diminished the pros- pects for sustainability of independent media in the Western Balkans. This document has been produced within the EU TACSO 3 project, under the financial assistance of the European Union. The contents of this document are the sole responsibility of the team of researchers and can under no circumstances be regarded as reflecting the position of the European Union. Copyright notice © European Union, 2020 Reproduction is authorised, provided the source is acknowledged, save where otherwise stated. It is in line with the: 1. EU communication and visibility requirements page 24 https://ec.europa.eu/europeaid/sites/devco/files/communication-visibility-requirements-2018_ en.pdf 2. The new Copyright Directive from July 2020 https://ec.europa.eu/commission/presscorner/detail/en/MEMO_19_1151 Disclaimer This publication has been produced with the assistance of the European Union. The contents of this publication are the sole responsibility of the GDSI consortium and can in no way be taken to reflect the views of the European Union. * This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo declaration of independence. Table of Contents INTRODUCTION . 5 1. MEDIA LANDSCAPE ����������������������������������������������8 2. MEDIA OWNERSHIP ������������������������������������������� 11 3. BUSINESS ENVIRONMENT AND FUNDING ������� 17 3.1. ADVERTISING MARKET ������������������������������������������������������������������18 3.2. GOVERNMENT INVOLVEMENT IN MEDIA FUNDING ����������������22 3.3. DONOR FUNDING ��������������������������������������������������������������������������23 3.4. ALTERNATIVE MEDIA FUNDING � � � � � � � � � � � � � � � � � � � � � � � � � � � �25 4. AUDIENCE ����������������������������������������������������������� 27 5. INDEPENDENT MEDIA IN THE REGION ������������� 31 5.1. ECONOMIC SITUATION OF INDEPENDENT MEDIA ������������������������������������������������������������34 5.2. OPERATIONAL AND STRUCTURAL NEEDS ������������������������������������������������������������36 6. CONCLUSIONS . 39 7. RECOMMENDATIONS ����������������������������������������� 42 7.1. RECOMMENDATIONS FOR MEDIA SUPPORT ����������������������������44 REFERENCES AND SOURCES . 48 Tables and Graphs TABLE 1. ESTIMATED NUMBER OF MEDIA OUTLETS IN THE WB REGION ��������������������������������������������������9 TABLE 2. OWNERSHIP OF MEDIA OUTLETS WITH HIGHEST REACH/SHARE ��������������������������������������� 13 TABLE 3. ESTIMATED ADVERTISING REVENUE, PER MEDIA SYSTEM (IN MILLIONS OF EUR) ����� 18 TABLE 4. SHARE OF TV IN OVERALL ADVERTISING SPEND IN THE REGION (2018) ����������������������������� 19 TABLE 5. EXAMPLES OF THE DISTRIBUTION OF SPORTS BROADCASTING RIGHTS IN THE WB REGION ����������������������������������������������� 20 TABLE 6. CURRENT REGIONAL MEDIA ASSISTANCE PROGRAMMES ������������������������������������������������������� 24 TABLE 7. AUDIENCE REACH PER MEDIA SECTOR IN THE WB REGION IN 2018 ��������������������������������� 28 TABLE 8. AUDIENCE REACH OF THE INDEPENDENT MEDIA ��������������������������������� 29 TABLE 9. EXAMPLES OF INDEPENDENT MEDIA IN THE WESTERN BALKANS ��������������������������������� 33 INTRODUCTION This report provides a summary of the findings of research on the economic situation, needs and prospects of independent media outlets in the Western Balkans (Albania, Bosnia and Her- zegovina, Kosovo, Montenegro, North Macedonia and Serbia), which was conducted between June and November 2019. The study revolves around an analysis of the structural conditions affecting media ownership, the commercial operating environment and the available sources of funding as well as media consumption habits and audience demand. The research team concluded that the space for independent journalism in the Western Balkan region was con- strained by: } The modest size of advertising markets; } The strong channels of political influence that distort the media market and lead to cor- rupt business relationships and practices, including the misuse of public funds to serve private interests; and } Strong competition, arising from the actions of regional and global players in the media market. There are a number of reasons why the challenges faced by independent media outlets have multiplied in recent years. These include the continuing economic crisis in the region as well as the collapse of traditional business models. The latter is largely due to shifts in audience behaviour and advertising practices resulting from global changes in information technologies and platforms. Moreover, the tactics employed by the regional and global players in these markets have made it harder for domestic media to attract advertising. The tech giants such as Google and Face- book enjoy a growing share of the advertising market because they are able to reach wider audiences for less money than domestic outlets. Furthermore, regional advertising packages offer access to audiences in the region’s smaller economies but they are often heavily dis- counted, thus undermining the position of domestic media outlets. The ruling political structures have been quick to exploit the resulting financial vulnerability of local media by instrumentalising government advertising and grants for media outlets. They are also known to put pressure on advertisers who fall within their sphere of influence. The sustainability of professional journalism in the region is further threatened by the absence of supportive media policies, by poorly functioning media markets and by a lack of effective business models. In such an environment, the survival of the independent media sector is predicated on long-term commitment and dedication – qualities which are mainly to be found among donor-dependent media. International assistance provides the space to practise professional journalism within both commercial and not-for-profit media, but this support does not maintain sustainability beyond a one- or two-year timeframe. Alternative sources of funding do exist. They include direct contributions from the audience including through community fundraising (mainly micro-do- nations and crowdfunding) and subscriptions, as well as the creation of specialised content capable of attracting larger audiences and increased advertising revenue. However, they are still in their infancy and the future of independent journalism remains uncertain. 6 The research was conducted by a team based in the Western Balkans, working under the auspices of the called Technical Assistance to Civil Society Organizations (EU TACSO 3) in the Western Balkans and Turkey, which is funded by the European Union.1 Based on both desk and field research, the study comprised a review of more than 125 publications and around 40 media articles as well as 36 in-depth interviews, 15 short interviews and written replies. The researchers also consulted Ipsos data on audiences and advertising markets2 in addition to a wide range of other sources including public registers, government and corporate websites.3 This report is an executive summary of the comprehensive regional study. 1 The research team comprised Brankica Petković (lead researcher) and Sanela Hodžić (regional researcher), co-authors of this report; as well as the national researchers: Ilda Londo (Albania), Sanela Hodžić and Anida Sokol (BiH), Jeton Mehmeti. (Kosovo), Daniela Vukčević (Montenegro), Vesna Nikodinoska and Slavčo Milenkovski (North Macedonia), and Vladimir Kostić (Serbia), who carried out the field research and reported on the results. 2 Ipsos is a global market research and consulting firm, with offices in the Western Balkans region. Ipsos provided the research team with data on the audience reach of media outlets as well as estimates and analyses concerning advertising spend and trends in media markets in the Western Balkans. 3 The full version of this study includes both the regional and six national reports and a full list of sources. 7 1. MEDIA LANDSCAPE The challenges to the sustainability of independent journalism stem in the first instance from the oversaturation of the media environment, in which several thousand commercial media outlets and more than 200 public television
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