When staff at Hungary’s left-leaning Nepszabadsag newspaper packed up their possessions one Friday night a year ago, they thought they were just moving across town.
As it happened, they were moving out altogether. Within hours, the paper had been shut down, literally overnight. Within weeks, ownership of the other publications in the group had been transferred to a new holding company linked to Lorinc Meszaros, an oligarch ally of populist Hungarian Prime Minister Viktor Orban and mayor of Orban’s hometown.
“It was an ambush,” deputy editor Marton Gergely said. “All the circumstances spoke against economic reasons for closing the newspaper down suddenly. We felt betrayed, lied about, cynically played. There were journalists close to retirement worried about their pensions. There were photographers, technical staff, and not all of them were opposed to Orban.”
Nepszabadsag, which had suffered a decline in circulation and heavy losses according to claims from the owners, was no isolated instance.
Across central and eastern Europe — and indeed in other parts of the world — political and economic forces are combining to put independent media under unbearable pressure.
The combination of falling newspaper circulations and ad revenues has shattered the business model and left newspapers weakened and vulnerable to both political and corporate pressure. Some fear that as a result, the ideal of journalistic independence is being critically compromised.
In Poland, for example, liberal outlets claim that they are now unfairly treated by the center-right government, which they say uses economic means to gain political ends.
“Since autumn 2015, there has been a drastic reduction — sometimes a complete ban — of subscription to some newspapers by public institutions, targeted mostly against two weeklies, Polityka, Newsweek and Gazeta Wyborcza, which criticise the ruling party,” Gazeta Wyborcza deputy editor-in-chief Piotr Stasiski said.
“There has been a total withdrawal of state-owned companies’ ads from critical media. These have been transferred to many [pro-government] media outlets. This has led to a loss of advertising and circulation revenue,” he said.
This is a common complaint across the region, said media investment expert Luka Oreskovic.
“From Poland and Hungary and all the way to the chronic state-sponsored pressures on media in the western Balkans — governmental action in the form of withholding public sector advertising, conducting repeated tax raids via state tax authorities, and restricting freedom of speech through the introduction of repressive and restrictive media legislation has had a negative impact on the quality of public discourse,” he said.
“These are powerful tools for curtailing media freedom and independence, as they can have — and have had — a tremendous impact on the financial health of stand-alone media outlets,” Oreskovic added.
“The economic volatility of media is an enormous challenge for journalism,” said former French Secretary of State for European Affairs Harlem Desir, who is now the Representative on Freedom of the Media at the Organization for Security and Co-operation in Europe.
“It is more difficult to find resources to finance independent and qualitative journalism. Furthermore, media ownership concentration is speeding up. This endangers pluralism and it also means that in some areas, local media are simply disappearing,” he said.
Globally, newspaper revenues have declined by 7.8 percent over the past five years, according to figures from the World Association of Newspapers and News Publishers (WAN-IFRA). However, that figure is distorted by the fact that newspaper circulations in China and Indonesia are up by more than 25 percent and in India have soared by 71 percent.
The reality for most parts of the world has been far more grim: circulation declines of 34 percent in Spain, 19 percent in Brazil, 32 percent in Australia, 22 percent in South Africa and 39 percent in Italy, to select a few.
While revenue from print sales shrinks, global print advertising revenue has been falling too, from US$79 billion in 2012 to US$58 billion this year.
Digital advertising is increasing — up 5 percent from 2015 to 2016 alone — but most of that growth has been captured by Internet giants Google and Facebook.
“The American commercial news model has been really falling apart over the last 10 years, and there has been a huge crisis in the ad model. The old media model is not the future, and that is exacerbating the problems,” said Tara Susman-Pena, a senior technical adviser for the International Research & Exchanges Board, which has been monitoring global media sustainability since 2001.
“Media is now weakened,” said professor Rosental Alves, founder of the Knight Center for Journalism in the Americas. “In western democracy, the media has been very profitable and as a result has been given more and more strength to become independent and immune to pressure for corporations and governments. But as the financial situation has changed, the vulnerability has increased.”
Starved of cash, many newspapers are forced to depend on income that comes with strings attached, in a way that can trigger disastrous soft-censorship and self-censorship. State advertising, in particular, is often used as a manipulative tool by governments; the advertising simply goes to the friendly press.
A global review by WAN-IFRA found that in many countries the press is worryingly dependent on state advertising.
Cambodia’s media, for example, “struggle to maintain editorial integrity, often succumbing to government [or private] influence that is rewarded with advertising. An estimated 99 percent of local advertising revenue is found in just a handful of newspapers,” the review said.
The need for money has also given commercial interests far more power. In many of the countries looked at by the global Worlds of Journalism study, journalists report that “advertising concerns” and “profit-making pressures” have increased in their newsrooms in the past five years.
Independent global media platform openDemocracy, in partnership with Index on Censorship and the European Federation of Journalists, is currently carrying out a survey of European journalists across 47 countries to find out whether commercial pressures have increased. So far, they say, the results are concerning.
Ownership is also a critical issue, as business enterprises take advantage of the financial weakness of the sector to roll out a number of takeovers. Last year’s Reporters Without Borders (RSF) report entitled Media: when oligarchs go shopping traced the “Berlusconi model,” where media owners have strong ties with politics and found it popping up all over the world.
The report cites the takeover of the previously independent South China Morning Post by Jack Ma (馬雲): University of Hong Kong political scientist Willy Lam (林和立) believes “that Jack Ma is acting as a political proxy for the Chinese government and its goal of silencing the last independent media voices in the territory.”
Susman-Pena admits she is gloomy about the future of the media industry, but WAN-IFRA chief executive officer Vincent Peyregne, is surprisingly less so.
Yes, he said, “traditional business models for news organizations have been turned upside down.”
However, he believes that this can ultimately have positive consequences too.
“We have entered a user-centric era where our business models now depend on the value we provide to our communities and end users, rather than the value to advertisers. This is leading to changes throughout the industry towards subscription models or membership. It is all about the readers now, and in the end that can be a powerful force to improve journalism,” Peyregne said.
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