Media Ownership Concentration in Romania: A Threat to Pluralism and Media Freedom?
Debates about concentration of media ownership and possible means of regulating it have been for some time now on the European agenda. Throughout the 1990s, discussions centered on The Green Paper on media concentration and pluralism, and on the two draft proposals for a Media Pluralism and then a Media Ownership Directive. At international level as well, academics, policy-makers, media researchers and various other stakeholders engaged and took sides in the debate concerning the impact of media concentration on democracy, conducting active deliberations such as the ones on the online forum hosted by OpenDemocracy.com (OpenDemocracy ND).
However, in the case of one of EU’s newest member, Romania, the concentration of media ownership is a fairly new topic on the public agenda, as reports have started observing it only after the year 2000 (see RWB 2004, EUMAP 2005, Freedom House 2006). For this reason, little research is available on how the collateral interests of increasingly consolidated media group owners affect media freedom. My research aims to provide more insight into this undergoing development on the Romanian media market, as well as discuss its impact on pluralism and media independence.
The Post-Communist Romanian Media Market: A Brief Overview
As in all the other countries in the region, the collapse of the communist regime in December 1989 was immediately followed by the abolition of the state’s official control over the media. The licensing procedures that had been previously imposed by the communist authorities on the publication of newspapers were now brought to an end and the market started advancing towards privatization and pluralization (Sukosd & Bajomi-Lazar 2003). The print media market was liberalized first and hundreds of periodicals mushroomed in the early 1990s as a result. Over time, however, the amount of printed media declined, mostly after 1994, when the monopoly of the public television ceased and private players were allowed to enter the audiovisual market. As a result, television is now the most profitable sector from the media market.
Thus, whereas the audiovisual market was largely dominated by the state-owned Romanian Television and Romanian Radio until the mid 1990s and only afterwards registered an increase in market players and real competition, the print media started with an extreme escalation in the number of outlets and ended up with moderate development by the end of the decade. The reasons behind this lie in the greater centralization of the audiovisual outlets, following the communist pattern, as well as the consequent difficulties in liberalizing this market as opposed to the print one. In addition, broadcasting’s use of spectrum and the ensuing licensing procedure brought a type of technical hurdle that did not apply in the case of the print media. High sunk costs in terms of investment should also be considered in explaining why private firms were overabundant on the printed media market earlier than on the audiovisual one.
Ongoing Trends: Concentration and Cross-ownership
Despite different developments, one thing can be stated without any doubt about both the print and the audiovisual market: they continued to grow at an accelerated pace after 2000. The state gradually lost the control over publishing and distribution, thus intervening less and less on the market. As an indicator of investments and profitability, advertising revenues increased from 225 million euro in 2004 (Martin 2005, p. 187) to 320 million in 2007 (Hotnews 2007a). This development, coupled with both the print and the audiovisual media markets getting more crowded by the end of 1990s (see EUMAP report 2005), might lead to the conclusion that the business environment became more competitive. However, a number of national and international reports noticed a different tendency.
A report developed by the Romanian Competition Council (2005, p.60) underlines concentration as being a visible market development, raising “dominance issues”. The document also advises a close watch of media mergers for the prevention of oligopolies that would restrict the access of new entrants on the market. A similar policy advice is highlighted in the EUMAP study on Television across Europe (EUMAP 2005) released at the end of 2005 and depicting Romanian TV as being “in troubled waters”. The main problems signaled by this report are, on the hand, addressing public television and its general lack of independence from the government, and on the other hand, commercial television, its insufficiently transparent ownership and its excessive concentration tendencies.
A larger report issued by Freedom House (2006) on media independence also reveals similar results. Though noticing that “political pressure on the Romanian media was considerably relieved in 2005” (p.3) after the elections, the report underlines the need for more transparency in media ownership. Additionally, a radical conclusion is drawn in a study published by the “Reporters without borders” organization (RWB 2004), stressing the “berlusconization” trend noticeable especially in the local press. Offering extensive examples of small regional media “empires” owned by local government party representatives and very often funded by the preferential granting of state advertising, the report concludes that “political officials control – directly or indirectly – all but very few of the country’s media” (p.3).
Collateral Issues: Transparency in Ownership and Funding
Despite the observed concentration presented in the reports above, proving the ongoing phenomenon with numbers is a difficult task. Recent developments from 2006 have shown that the data provided by official channels is not necessarily accurate. Although the Audiovisual Law requires the disclosing of ownership, no effective implementation strategies were undertaken by the industry regulator, called the National Council of Audiovisual (NCA), in cases where there was an obvious disparity between the official data provided to the Registry of Commerce and the actual groups exercising control over a specific media outlet. A frequent scheme used by some audiovisual media companies to hide their real ownership is registering in foreign tax havens, where shareholding anonymity is allowed by law, such as Cyprus, the Netherlands, the Antilles, the Virgin Islands or the Bahamas (Martin 2005).
Adina Baya in October 2007