1. Media ownership concentration and regulation of advertisement market in Central and Eastern Europe: T he case of the Czech Republic Dr Václav Štětka Senior Research Fellow Department of Politics and International Relations University of Oxford Culture of debating, freedom of expression and independent media, Ochrid 3-4 April 2012

2. Media and Democracy in Central and Eastern Europe (2009-2013) 10 new EU post-communist member states Focusing at news media: broadcast, print, online Investigating the relationship between quality of democracy and quality of media in countries of CEE http://mde.politics.ox.ac.uk

3. Evolution of the Czech print media market: key features Rapid, “spontaneous” privatization of print media by editorial teams in 1990-1992 Fast and widespread internationalization: majority of newspaper / magazine publishers sold to foreign investors in the first half of 1990s First CEE tabloid launched by Ringier in 1992 (Blesk) Consolidation of market since late 1990s Monopolization of regional daily market by Verlagsgruppe Passau

4. Media ownership/concentration regulation: liberal framework Foreign ownership restrictionsNone Ownership transparency enforcementNone Horizontal concentration restrictions“non-dominant position” < 40% market share (2001 Economic Competition Protection Act) Horizontal concentration restrictions – analogue broadcasting - One licence per one nation-wide TV or radio broadcaster, no ownership interests in more than one broadcaster - Networking of local radio stations : up to 70% of population reach Horizontal concentration restrictions – digital broadcasting Max. two licences per one nation-wide TV or radio broadcaster, no ownership interests in more than one broadcaster Cross-media concentration restrictionsNone

5. Czech daily newspaper market: limited pluralism DailyType / profilePublisherMajority owner Circulation (2010) Blesk tabloid (news/gossip) Ringier Axel Springer CZ Ringier Axel Springer Media (SWI / GER) 384 991 MF Dnesquality (centre-right)MAFRA Rhenische Post (GER) 239 646 Deník (regional) network of regional dailies (semi-quality) Vltava-Labe- Press Verlagsgruppe Passau (GER) 224 122 (combined) Právoquality (centre-left)Borgis Zdeněk Porybný (editor-in-chief) 128 404 Aha! tabloid (celebrity gossip) Ringier Axel Springer CZ Ringier Axel Springer Media (SWI / GER) 100 397 Sportsport Ringier Axel Springer CZ Ringier Axel Springer Media (SWI / GER) 54 413 Lidové novinyquality (centre-right)MAFRA Rhenische Post (GER) 49 920 Hospodářské novinyquality/financialEconomiaZdeněk Bakala44 225 Haló Novinyparty paperFutura Communist Party of Bohemia and Moravia (not monitored) MetroFree paperMAFRA Rhenische Post (GER) 257 053 E15Free paper / financialMladá fronta(unknown) (not monitored)

7. Czech television market: from commercial monopoly to digital fragmentation? State television transformed into public service broadcaster in 1991 In 1993 first licence to national commercial broadcaster granted to TV Nova (CME) In 1994 TV Nova had up to 75% audience share By 2000 commercial monopoly started changing into duopoly with the rise of TV Prima (50% sold to MTG in 2005) Digitalization: first multiplex started in 2005; last analogue broadcasting switched off in February 2012 4 national multiplexes (the first one for public service broadcasters)

9. Altogether 72 television programmes broadcasting in Czech language (2011)

10. MAFRA, a.s. Cable / digital TV iDnes.tv Óčko (music TV) Local radio Classic FMExpres National dailies MF DNES Lidové noviny Metro Printing Plants Mafraprint Internet News Portals iDnes.czLidovky.cz Distribution PNS, a.s. Largest Czech media conglomerate: MAFRA (RBVG): example of horizontal, vertical and diagonal concentration 36 % of daily newspaper market 20 % of online news market

11. Despite tendencies to concentration / conglomerization, lack of pluralism still not a key problem of the Czech media scene, mainly thanks to new media platforms (digital TV, internet portals, blogosphere) Main risk for autonomy coming from new type of media owners – local business elites pursuing other-than-media interests

12. Most influential Czech business/media tycoons Main companyMain domain of business Media outlets control Zdeněk Bakala (4 th richest Czech) New World Resources (NWR) Coal mining, coking plants, energy production + distribution Hospodarske noviny (daily) Ekonom (economic weekly) Respekt (political weekly) Petr Kellner (richest Czech) PPF GroupPrivate equities, real estates, insurance, banking Euro (economic weekly) [in 2011 sold to his close business ally] Tomáš ChrenekMoravia Steel; Agel Steel production; energies; health care TV Barrandov (digital) Andrej Babiš (2 nd richest) Agrofert Holding Food processing5+2 days (free weekly) Ivan ZachGES Invest; GES Medical Care Health care; air handling systems TV Prima (50%) Local radio network Hey Jaromír SoukupMedea GroupMedia buying, advertising Instinkt (weekly) Týden (weekly) New Profit (weekly)

13. Jaromír Soukup: concentration of news media + advertising + political power Advertising tycoon, owner of the biggest PR and media buying agency MÉDEA Among his clients are several biggest Czech state companies: ČEZ, Czech Railways, Czech Mail, Czech Airlines etc. Since 2011 owner of several political weeklies (Týden, Instinkt, Mladý Svět, Profit) Politically active, supporter of several parties ◦ 2006 : sponsored the Green Party (Deputy Minister of Education in 2006-2007) ◦ 2010: supported the Czech Social Democratic Party and new party Public Affairs (advertising deals in election campaign – up to 90% discounts; + providing analytical and PR services)

14. State advertisement as a means for financing political campaigns and political pressure Political parties control State companies invest Media buying agencies buy Advertising space in media DISCOUNT invest favour

15. Biggest state advertisers in the Czech Republic (mil. CZK, listed prices) 20102011 ČEZ (energy company)240121 Czech Railways10635 Czech Railways Cargo3531 Prague Airport1526 Forests of the Czech Rep.11824,5 Czech Airlines1021 Land Fund of the Czech Rep.8,513 General Health Insurance Comp.2811 Czech Tourism32055 Source: KantarMedia

16. Top 10 advertisers in the Czech Republic in 2010 (listed prices) AdvertiserAmount in CZK Procter & Gamble Czech Republic 1 521 262 110 Kč HENKEL ČR 1 442 267 541 Kč UNILEVER ČR 1 201 064 466 Kč Vodafone Czech Republic 1 134 778 394 Kč L'oréal Česká republika 852 099 451 Kč Lidl Česká republika 846 074 814 Kč T-Mobile Czech Republic 786 559 241 Kč Nestlé Česko 649 691 035 Kč Telefónica O2 ČR 649 092 273 Kč Social Democratic Party 614 134 495 Kč Source: Admosphere, s.r.o. (http://www.mediaresearch.cz)

17. Top 10 product categories in advertising expenditures in the Czech Republic in 2010 (listed prices) Product categoryAdvertising expenditures in CZK Perfumes and toilet articles 4 627 172 522 Kč Cars 3 948 740 651 Kč Banking and savings products 3 131 839 679 Kč Supermarkets, food stores 2 261 342 082 Kč Medicinal drugs 1 726 507 069 Kč Detergent, cleaning products 1 670 861 679 Kč Data transfer, telecommunications 1 537 667 329 Kč Political parties and organisations 1 448 534 970 Kč Vitamines, nutritional supplements 1 403 977 300 Kč Non-alcoholic beverages, mineral waters 1 359 067 620 Kč Source: Admosphere, s.r.o. (http://www.mediaresearch.cz)

18. “Lessons” from Czech media transformation: are there any? Profitability – a precondition for media autonomy; weakening of economic base increases vulnerability to political-economic pressures ◦ The fast growth of advertising market in the CR after 1990 helped preserving independence from political parties Foreign ownership generally beneficial ◦ Despite various negative consequences (e.g. tabloidization, concentration), Western investors largely safeguarded editorial independence and often elevated/maintained professional standards “Better laws” on media ownership/concentration not necessarily a key to more transparent & pluralistic media environment ◦ Problem with implementation rather than sheer existence of laws ◦ Self-regulation often more successful in building healthy journalistic culture than rules imposed by the state However, clear rules still needed for distribution of state advertising, and for the funding of election campaigns Safeguarding independent and economically stable public service media is crucial for keeping up professional standards and providing objective, unbiased information

19. Thank you! vaclav.stetka@politics.ox.ac.uk http://mde.politics.ox.ac.uk