Strengthening Media Systems Activity - (SMS) - USAID
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Strengthening Media Systems Activity
(SMS)
Political Economy Analysis
Submitted: September 10, 2018
Revision submitted: October 12, 2018
Agreement Number: AID-169-C-17-00006
Activity Start Date and End Date: September 27, 2017 to September 26, 2021
Total Award Amount: $6,493,591
COR Name: Marko Pjević
Submitted by: Evan Tracz,
Chief of Party, SMS Project
IREX Serbia
Email: etracz@irex.org
Linda Trail
Senior Technical Advisor, Information & Media
IREX
Email: ltrail@irex.org
Produced by: Center for Free Elections and Democracy (CeSID) and IREX
“This report is made possible by the support of the American People through the United States Agency for International Development
(USAID). The contents of this report are the sole responsibility of IREX and authors and do not necessarily reflect the views of USAID
Authors: Bojan Klačar, Sever Džigurski, Ivo Čolović, Saša Mirković, Srđan Garčević, and Miloš
or the United States Government.”
Stojković
Contents
1. Executive Summary and Main Recommendations ......................................................................... 1
Introduction............................................................................................................................................. 1
Foundational Factors .............................................................................................................................. 1
Main Problems in the Media Sector ...................................................................................................... 2
Rules of the Game .................................................................................................................................. 2
Stakeholder Analysis .............................................................................................................................. 3
Here and Now ......................................................................................................................................... 3
Explanations Held by Actors ................................................................................................................. 4
Change Drivers ....................................................................................................................................... 4
Future Prospects..................................................................................................................................... 5
Recommendations .................................................................................................................................. 5
Potentialities for Strategic Influence .................................................................................................... 5
Practical Recommendations ........................................................................ Error! Bookmark not defined.
2. Introduction....................................................................................................................................... 7
2.1. Global Media Trends ....................................................................................................................... 7
2.2. Serbian Media Landscape................................................................................................................ 8
2.3. Public Opinion of the Media Landscape ........................................................................................ 9
2.4. Why Political Economy Analysis .................................................................................................... 9
2.5. Team, Approach and Methodology ............................................................................................. 10
2.5.1. Methodological Limitations ........................................................................................................................................................ 11
3. Serbian Media Landscape .............................................................................................................. 11
3.1. Media Market: Key Features ......................................................................................................... 11
3.2. TV Remains Key, but Digital Media are Growing in Importance ............................................. 13
3.3. Public Opinion of the Media Landscape ...................................................................................... 16
4. Foundational Factors ...................................................................................................................... 19
4.1. Demographics ................................................................................................................................ 19
4.2. Political System.............................................................................................................................. 20
4.3. Macro-economic Context ............................................................................................................. 21
4.4. EU Integration ............................................................................................................................... 22
5. Main Problems in the Media Sector.............................................................................................. 25
6. Rules of the Game .......................................................................................................................... 30
6.1. Legal and Policy Framework ........................................................................................................ 30
6.1.1. Specific Media Laws......................................................................................................................................................................31
6.1.2. Media Strategy process ............................................................................................................................................................... 32
6.2. Stakeholders Analysis .................................................................................................................... 34
6.2.1. Institutional Players: Capacities, Motivation and Power Dynamics ................................................................................... 34
Political Economy Analysis - Revised ii
Strengthening Media Systems Project6.2.2. Non-Institutional Players: Capacities, Motivation and Power Dynamics ..........................................................................36
6.3. Analysis of dynamics, capacities and potentials related to identified problems...................... 38
7. Here and Now ................................................................................................................................. 42
8. Understanding Change Processes .................................................................................................. 43
8.1. Explanations held by actors .......................................................................................................... 43
8.2. Change and its Drivers .................................................................................................................. 45
8.3. Discursive Practices and Future Prospects ................................................................................. 46
8.3.1. Discursive Practices .....................................................................................................................................................................46
8.3.2. Future Prospects ..........................................................................................................................................................................47
9. Conclusions ..................................................................................................................................... 50
10. Recommendations ........................................................................................................................ 50
10.1. Potentialities for Strategic Influence ......................................................................................... 51
10.2. Practical Recommendations ....................................................................................................... 52
11. References ..................................................................................................................................... 54
Annex: Quantitative research on a representative sample of 1,000 respondents aged 18 ........... 57
Political Economy Analysis - Revised iii
Strengthening Media Systems Project1. Executive Summary and Main Recommendations
Introduction
This Political Economy Analysis (PEA) aims to (1) assess the media environment and media market; (2)
identify key problems related to media business in Serbia; (3) identify stakeholders, both institutional and
non-institutional, their incentives, capacities, and power dynamics to deal with these problems; and (4)
understand socio-political forces and changes to the media sector in Serbia. Further, it intends to define
recommendations that contribute to the achievement of the objectives of the Strengthening Media
Systems (SMS) Project.
The analysis employed an inclusive and participatory approach and was based on USAID’s Applied PEA
Framework as well as ideas developed through the Thinking and Working Politically Community of Practice
and those stemming from the Doing Development Differently manifesto.
Foundational Factors
Demographics are a starting point for the PEA, as negative demographic trends in Serbia - depopulation
and migration flows - have a direct impact on the media market and potential new business
models. According to OECD, Serbia is ranked 31st of the world’s top 50 countries for
emigration: on average, 31,000 people left Serbia annually between 2005 and 2014. These
negative trends, combined with an aging population, poor purchasing power, and a proliferation of media
reduce the prospects for successful media businesses and for the new business models.
Party politics is an extremely important foundational factor because the implementation of
the legal framework is influenced by politics. This is particularly noted in relation to the political
pressure on independent media, failed privatizations, dependence of local media on state sources and,
finally, through public project financing and large advertising budgets. The political context shapes nearly
all of the main problems noted within this PEA analysis: (1) they empower further politicization of the
sector and production of politically motivated content, (2) lack of transparency and bias in the process of
co-financing of media content due to the strong influence of the ruling party, and (3) control of state
advertising and procurements related to PR and media services alongside control of the privatization
process.
Regarding the economy, Serbia has made progress and is moderately prepared to develop
a functional market economy, having laid firm foundations for growth and preserved
macroeconomic stability. However, the starting point is unfavorable, as the Serbian economy remains
one of Europe’s poorest, with a nominal GDP per capita of €4,900 (EU-28 Average 2017: €29,900).
Furthermore, capital is concentrated in Belgrade, together with political and economic power. Key
structural reforms in the areas of public administration, taxation, and state-owned enterprises are yet to
be completed. In addition, media is trusted by only 15% of citizens and in general, organizations that ought
to articulate citizens’ demands in the political system enjoy low levels of trust - non-governmental
organizations, trade unions, and political parties (CeSID/USAID, 2017). A poor economy means poor
purchasing power of citizens and consequently stagnation on the media market and limited
commercial revenues for media outlets.
In such a political environment, the European integration process represents a strong steering
wheel for various sectors in Serbia, including media. With regard to audio-visual policy and media,
the most important EU negotiation chapters are Chapter 10 Information Society and Audio-visual policy
and Chapter 23 Judiciary and Fundamental Rights. Further, Chapter 5 (Public Procurement), Chapter 8
(Competition Policy), Chapter 9 (Financial Services), Chapter 16 (Taxes), Chapter 20 (Enterprise and
Industrial Policy) and Chapter 24 (Justice, Freedom and Security) include aspects relevant for the media
sector and point to various challenges. Influence of EU as a foundational factor on the media sector can
be significant in the field of reform of regulatory framework and through pressure on the ruling party in
Political Economy Analysis - Revised 1
Strengthening Media Systems Projectorder to improve media sector, media marker and freedom of expression in the process of EU
integration.
Main Problems in the Media Sector
The PEA analysis identified four main groups of problems related to media sector: (1) a fair,
transparent and functional market, (2) state aid regulation and state ownership in media, (3) commercial
revenues and advertising, and (4) media business in the digital environment. The most important issues
and opportunities related to the outlined groups of problems which shape the media sector and illustrate
possible recommendations are:
→ An outdated and incomplete Media Register which raises issues in relation to media ownership
and transparency,
→ Inconsistent interpretation of VAT requirements for project financing purposes by tax authorities
directly affects local media and leads to unequal treatment,
→ Project co-funding of media content and state advertising alongside with other public
procurements,
→ Lack of verified information on the value of the market and market participants and lack of a single
measurement system, based on common standards that would take into account small and local
players, and
→ Obstacles to on-line payments, which would make audiences a key factor in ensuring media
sustainability.
Rules of the Game
Formal rules defining roles and procedures attached to the relevant public institutions
concerned with different aspects of the media sector in Serbia are fairly well defined.
However, non-implementation, partial implementation and misinterpretation of current laws has resulted
in an unregulated media market and an environment sensitive to political influences. This is particularly
noted in relation to the co-financing of projects in the field of public information, particularly at the local
level with transparency of procedures, allocation of the funds and composition of independent
commissions. In addition, the information on the total of allocated funds through this scheme on all
government levels is not available.
As a result of weak enforcement of formal rules, informal rules dominate the media sector
and represent channels to exert political and financial influence. Media sector stakeholders are
susceptible to such influence due to the lack of transparency in state co-financing mechanisms, an
oversaturated market and dependence on state and municipal funding. Funding alternatives, such as
advertisers and marketing agencies, are motivated by their own interests, and political pressure, in
addition to profits.
The rules of the game are defined and enforced by a set of institutional actors. Within the
government, these include several ministries and governmental bodies with the Ministry of Culture and
Information and REM having the key roles. The Ministry of Public Administration and Local Government
also plays a major role, as do the Ministry of Tourism, Trade and Telecommunications, the
telecommunications regulator RATEL, and the Office for Human and Minority Rights. Despite their
diminishing influence, Ombudsman and the Commissioner for Information of Public Importance and
Personal Data Protection also have an important role. With the exception of the Commissioner for
Information, whose mandate is ending in December 2018, all other aforementioned government bodies
are orchestrated by the ruling political party. The main self-regulatory body is the Press Council,
established in 2010.
Political Economy Analysis - Revised 2
Strengthening Media Systems ProjectAmong private sector actors are commercial television stations that operate alongside public service
broadcasters (the national-level RTS and the RTV for the Province of Vojvodina). Civil society
stakeholders include journalists’ and media associations, with the most recognizable and influential being
the Journalists’ Association of Serbia (UNS) and the Independent Journalists’ Association of Serbia
(NUNS). However, the media-related policymaking has suffered from disagreements between these two
organizations over the past 20 years.
Non-institutional stakeholders often collaborate on initiatives, but the proliferation of entities and
multitude of interests means that consensus building is often a challenging process. At the same time,
there is a growing number of associations that were established more recently (in the period of last 5-10
years). Due to their ties with the ruling Serbian Progressive Party, the political importance and influence
of these associations is rapidly growing through the involvement in working groups and co-financing
commissions.
To respond to at least some of presented problems and challenges, the new Media Strategy is to be
drafted by the end of 2018. After numerous controversies, in June 2018, a Governmental Media Strategy
Working Group was re-established to develop a strategic document that should be prepared by the
Government of the Republic of Serbia by the end of 2018.
Stakeholder Analysis
The relations of different institutional and non-institutional players are complex. Cooperation
between institutional stakeholders is based on the provisions of the law but depends on the existence of
political will, as well as on the skills and knowledge of staff appointed to key positions within these
institutions. The most constructive cooperation between institutional stakeholders is most often initiated
within the EU chapters. On the other hand, the portfolio of the Ministry of Culture and Information is de
facto placed in the prime minister's office, revealing the importance of personnel policy for the initiative
and the desire for sincere changes in this sphere. The lack of initiative in this key ministry
contributes to passivity of other state stakeholders in this sphere. Constructive cooperation
between this key ministry and the Regulatory Authority for Electronic Media (REM), over which the
ministry has formal oversight, has never been implemented in practice. Furthermore, the current
composition of REM and the lack of political will to improve the existing situation is one of the key
problems for real reforms in this area.
Current cooperation between institutional and non-institutional players on the drafting of the Media
Strategy is motivated by correcting the negative assessment from the latest EU Progress Report on Serbia,
the proactive role of the OSCE in the process, as well as the personal involvement of staff from the
Cabinet of the President and Prime Minister of Serbia. Capacities of CSOs are mostly based on aid from
the donor community. Specific initiatives for changing the current situation in the media
sphere are practically related to the financial capabilities of each actor individually or within
the coalitions. Representatives of the media industry are potential allies for many activities and their
capacities are large and varied, allowing different modes of collaboration. One risk is that the public
interest is not a particular priority for these commercially-oriented stakeholders.
Here and Now
In general, the media market is saturated and dominated by large actors across traditional
media. The still inexpensive entry costs and growth of the digital economy are set to promote further
proliferation of media outlets. There have been a few success stories in recent years while tabloids remain
the most vital segment of the market.
Online media are gaining some ground in terms of impact, which has been leading to some
advertiser migration, although this transition from traditional to new media has been slow
and websites are still lagging behind print in market share. Consequently, many print media
outlets turned towards digital environment to increase their reach and revenues. However, experts and
Political Economy Analysis - Revised 3
Strengthening Media Systems Projectmedia representatives feel the Internet is still more of a tool than a production platform and that its true
potential for production remains under-utilized.
The market also continuously attracts scrutiny of independent local and foreign actors due to its opaque
financing and ownership structures. Independent media, especially those critical of the government, are
struggling to function commercially.
The complexity of interactions within the Serbian media sector is characterized by the
existence of numerous media and journalists’ associations as well as their relationships and
dynamics. The situation among them is described as complicated—lacking understanding, cooperation
and solidarity. Divisions are also observed among journalists with clear political sides and opposing value
bases.
In order to address some of the existing problems (such as project co-financing, issues related to security
of journalists, etc.), the Serbian government formed the Coordination Body for Media Cooperation in
June 2018, while journalists' associations and media associations formed a Dialogue Team.
Explanations Held by Actors
The collection of research participants' descriptions and explanations of the media sector were based on
participatory drawing and in-depth, semi-structured interviews.
Schematic presentations of hierarchies and relationships dominate the drawings. While primarily
dealing with the influence and power of different types of media (TV being the most
important), they also portray the role of the legal framework and the problem of its
inadequate implementation. Another pattern observed is the symbolic presentation of the Serbian
media sector as chaos, with dark clouds and a vortex.
In line with the drawings, interviews reveal strong segregation. Beyond the situation being described as
polarized, it is further seen as full marginalization of those not working in line with government interests.
One theme agreed upon by most interviewees is that the current situation in the media sector is a
consequence of the global digitalization trends. The present situation is also explained through a
dominance of tabloids and pro-regime media, which is further deteriorating media content quality and
jeopardizing the level of media literacy in society.
Another explanation comes from the observation that media associations neither have strong
partnerships nor well-coordinated actions. Moreover, independent regulatory bodies are losing their
influence in the public sphere, leaving media and journalist associations with very few remaining allies.
Finally, project co-financing is seen to be based on good ideas but has not been adequately implemented
as it is neither protecting the public interest nor being transparently executed.
Change Drivers
Digitalization is changing media consumption, making it faster and shorter. Consequently, marketing
budgets are moving to online media and, although this transformation is slower in Serbia
compared to global trends, it is already significantly transforming the way media outlets are
operating. Research findings suggest that future actions must take into further consideration the digital
economy and private sector ICT, which is seen as the most prosperous and vital segment of Serbian
economy.
Regarding endogenous factors, political interests are seen to be the key driver, which is further causing
strong divisions between independent and pro-regime actors, while economic interests are also
significantly impacting the media sector. When looking into dynamics between stakeholders, actors in the
media market are segregated and the level of solidarity and broad cooperation is dropping. Furthermore,
although their role is not perceived as crucial, citizens are increasingly seen as important. This analysis
Political Economy Analysis - Revised 4
Strengthening Media Systems Projectshows a potential among the public for further action in the field of creating new business models and
digital operations.
Future Prospects
Research respondents have a rather pessimistic opinion about the future prospects of the
media sector because “there is neither a free market nor free advertisers operating”. The
rule of law and an increased media literacy among citizens are seen to be major preconditions for positive
prospects in media sector. With regard to the legal framework, the focus should be on ensuring adequate
implementation.
Regarding video content, a stronger role of consumers in selecting and editing the content is anticipated.
It means media should follow the logic of production of more personalized content for different types of
audiences. This analysis also suggests that further actions have to take into account a lack of surveys on
demand side, especially at the local level.
News formats are expected to change in order to respond to shorter time and “higher
demand for exciting, clear and quick news”. Thus, media outlets will be pressured to be more
responsive to the needs and expectations of consumers by making the information relevant and related
to their daily lives. Among other aspects, this will require a higher quality of content and innovative
approaches in reaching out and keeping consumers.
Recommendations
Recommendations emerging from this study are grouped into two categories: strategic interventions
and practical recommendations. They are tailored to be in line with the USAID SMS project’s goal
and objectives.
The set of practical recommendations is divided into four key issues recognized by this analysis: a) fair,
transparent and functional market, b) state aid regulation and state ownership in media, c) commercial
revenues and advertising, and d) media business in digital environment. In addition, practical
recommendations targeting legislative and regulatory framework for the media in a broader sense, and
the market environment for media (ranging from broad advocacy and education topics to specific
operational issues).
This PEA shows that progress with regard to many recommendations requires strong cooperation
between CSOs (advocacy campaigns), the digital sector (knowledge, expertise) and international
organizations (leverage). Media in Serbia also needs to adapt through the use of modern technologies,
adjusted news formats, and modified communication channels. Finally, for deep understanding of specific
recommendations related to the possible cooperation with other actors: the EU is a significant driver for
the media sector but negotiations with the EU move very slowly and the media sector in the EU
integration process is a cross-cutting issue, which therefore calls for a cross-sectorial and
multidimensional approach.
Potentialities for Strategic Influence
Three priority areas that potentially have long-term effects include:
• Legal environment, including an improved legal framework, adequate implementation of existing
laws, minimizing inconsistency between different laws and/or between local laws and global trends,
and the independence of regulatory bodies;
• The enabling environment for digital business (including e-commerce, online payments, education
for media business, digital based media, digital based content, etc.).
• Wider media and digital literacy, which would influence media consumption habits and increase
demand for a content of higher quality;
Political Economy Analysis - Revised 5
Strengthening Media Systems ProjectMore specifically, strategic interventions could aim at:
• Strengthening the cooperation between media outlets in order to decrease costs of content
production through sharing and co-production;
• Improving prioritized media related laws in order to avoid obstacles for online payments and
crowdfunding, and to regulate inconsistency among them, especially with regard to global trends
such as General Data Protection Regulation (GDPR) and Copyright Law;
• Exploring possibilities for stronger engagement of citizens as one of the most important pillars for
alternative business models;
• Enhancing the transparency of various media areas such as media registries, state aid (advertising,
procurements, and co-financing of media content), and media market data and analysis.
In doing so, USAID and IREX could explore possibilities to develop partnerships at different levels in
Serbia:
• OSCE, Delegation of EU and embassies could be strategic partners, with whom the coordination
of interventions and influences should be ensured.
• Media associations should be involved in defining strategic objectives and specific policy
recommendations.
• Digital-oriented businesses and CSOs could be more strongly involved in advocacy and awareness
raising. They might be included through direct engagement, leveraging their different capacities
and know-how, and sharing their knowledge and experience with new or potential players;
• Advertisers are potential allies in improving the transparency and control of advertising-related
financial flows. They could be partners to advocate for improving regulations that govern their
activities. Priority areas that would have short- and mid-term effects have been identified through
conversations with advertisers: (1) further interpretation of the Law on Advertising in digital space,
(2) improvement of transparency of media market by developing self-regulatory mechanisms, and
(3) cooperation with digital-oriented businesses in order to improve their capacity to produce
better quality media and/or digital content and consequently, their capacity for stronger
advertising revenue potential.
Sets of practical recommendations, for each group of identified problems, are provided at the end of this
document.
Political Economy Analysis - Revised 6
Strengthening Media Systems Project2. Introduction
2.1. Global Media Trends
Media production and consumption are rapidly changing across the globe. New technologies are
shifting the manner in which media content is distributed, which brings challenges for
traditional methods of charging for content (Deloitte 2018: 3). Recent Reuters Oxford Digital
News report indicates that 82% of respondents in 37 countries use digital media and online sources to
obtain news compared with 71% for TV, 36% for print, and 33% for radio. According to the same study,
computers are the most popular digital devices, but trends show smartphones catching up and likely to
surpass, especially among younger generations (Reuters Institute, 2018).
As high-quality content will likely always be in demand, a challenge for media companies is twofold:
maintaining or even increasing content quality while extracting maximum value for that content.
A challenge for media companies is figuring out how to create an experience that each consumer
feels is tailored specifically for her or him (Deloitte 2018:2). More specifically, according to EPC
Global Media Trends Book, six major trends are reshaping the way content is produced and published
including a critical increase in use of digital devices and Internet connectivity, consumer-driven content
consumption, discovery of news and entertainment through social media, accelerated shift to digital
platforms, growing video consumption, and rising habits focused on specific articles than to an entire issue
(EPC report 2016).
According to the EPC study, most consumers will be using their smartphones to access media
content by 2019, going straight to specific articles (not the publication’s home page) and
getting there via social media and not by search (EPC report 2016: 3).
This trend makes mobile the world’s fastest growing and the fastest growing advertising
spend category. For media companies, mobile presents challenges and opportunities in production,
consumer behavior and consumption, competition, interaction, distribution, monetization, attention,
advertising revenue, subscription revenue, and product development (EPC report 2016: 6). In response
to this trend, media companies are adopting mobile-first strategies.
At the same time, social media is driving massive traffic to magazine and newspaper websites,
underscoring the opportunity for publishers to optimize their social strategy (EPC report
2016: 7). In relation to this, most magazine and newspaper publishers are finding that less than 10 percent
of their traffic comes directly to their homepages. Meanwhile, the double-digit and triple-digit growth of
social media referrals may have reached a tipping point with search engine referrals as a marketing method
to drive traffic to magazine and newspaper media content in 2014, according to Shareaholic (as cited in
Deloitte 2018: 5). For these reasons, publishers should beef up their social media optimization (SMO)
operations while continuing their search engine optimization (SEO) campaigns. This means that articles
and posts would be set to appear to particularly targeted groups in Google search as well as on social
networks, enabling media to reach specific audiences.
Simultaneously, video usage and revenues are growing exponentially around the world. Recent
data suggests that the market is gradually taken by “over the top” (OTT) distributors 1 and the rise of this
content is among the most exciting for companies in this sector. Data that illustrates this trend is that by
mid-2017, 58% of U.S. household’s accessed OTT content and advertising revenues from OTT channels
exceeded those from web browser plug-ins. Further, 82% of respondents stated that monetizing content
through OTT is a major growth area for their business (DLA Piper 2018: 5).
1
Over the top (OTT) is a term used to refer to content providers that distribute streaming media as a standalone product
directly to consumers over the Internet, bypassing telecommunications, multichannel television, and broadcast
television platforms that traditionally act as a controller or distributor of such content.
Political Economy Analysis - Revised 7
Strengthening Media Systems ProjectRegarding advertising revenue, Internet advertising spending is poised to surpass television ad
spend, driven by PC-based Internet and especially mobile Internet advertising. DLA Piper
research indicates that by 2020 most revenue will come from internet and digital channels. This revenue
source is followed by traditional TV, social media, and OTT (DLA Piper 2018: 17). Meanwhile, e-
commerce and digital subscriptions, as well as video, programmatic and native advertising
all portend a vibrant future source of digital revenue for publishers (EPC report 2016: 4).
Deloitte suggests that targeted advertising represents a key growth opportunity for media companies in
2018 (Deloitte 2018: 1). However, success will likely depend heavily upon gaining more insights into
customers’ demographics and viewing behaviors.
In the sphere of intellectual property rights protection, as the type of IP infringement evolves, so
too do the strategies and technologies needed to prevent it. Internet streaming is recognized to
have the most detrimental financial impact. The solution is a combination of legal measures and
preventative technologies to fight infringement. However, improvements to the current legal and
regulatory framework are needed to tackle the continuously evolving content infringement
threat effectively. Collaboration between content creators, license holders, and large technology
platforms is also of vital importance. Content creators and license holders find online monitoring and
take-down notices most effective in addressing IP infringement. Some 27% of respondents stated this
measure is the most effective. A further 19% find ISP blocking injunctions most effective, while criminal
action against suppliers of equipment used to facilitate piracy is in third place (DLA Piper 2018: 32).
Key finding: New technologies, including social media, are shifting the way media content is distributed,
which brings challenges for traditional methods of charging for content.
2.2. Serbian Media Landscape
The media scene in Serbia is extensive, saturated, and inadequately regulated. It is also
insufficiently transparent, with unclear ownership of media outlets, opaque financial
operations, and an unsupervised advertising market. The Regulatory Authority for Electronic
Media (REM) is weak and passive, its reputation tarnished by numerous controversies (dating back to its
establishment) from the beginning of their work and its professional integrity frequently open to public
criticism, especially during election campaigns. Major issues affecting media outlets include a political
environment that pays only lip service to media freedoms; challenges brought about by the economic
downturn and growing popularity of the Internet (which calls for continuous adaptation to new moralities
of the media market); and the lack of professional solidarity.
There is no information on the exact number of (active) media outlets, while most recent studies
indicate that this number is around 2034 (Prava mera medija, 2018: 10).
Television remains the dominant medium, and its impact on the market is vast in terms of both viewership
and advertising budgets. In 2017 the advertising market for media was valued at €176 million
net, of which television accounted for more than one-half (55%); print media came in second,
at 16%. The remainder of the list was made up of online, at 15%, OOH, at 11%, and radio, at
4%. Cable distributors are significant players on the media market. The key player is SBB, a company
which operates within the United Group, one of the biggest regional media corporations with operation
in producing of content, distribution of channels and media buying. Telecom Serbia is also an important
player, especially in the light of the announcement that the company plans to buy other cable
distributor(s). For all TV stations, it is extremely important to be part of one of the cable operators in
Serbia.
The mainstream media market is very concentrated – the share of the audience of the main four players
in each medium is high: 63.27% for print media, 62.35% for television audience, and 51.2% for
radio. According to Media Ownership Monitor, the main players on the TV market include Public Service
Broadcasters, Pink Media Group, Antenna Group and Happy TV (62,35 % of the market), on Radio market
Media Tim, Maxim Media Group, PSB and Antenna Group (52,1 % of the market), and on Print market
Political Economy Analysis - Revised 8
Strengthening Media Systems ProjectRingier Axel Springer, Adria Media Group, Insajder Team and Novosti (63,27 %). Media Ownership
Monitor estimates that owners and managers of TV outlets who publicly endorsed the current
government serve 40.2% of the Serbian audience. The results are even starker for radio (42.6%)
and print media (50.73%).
Key finding: The media scene in Serbia is extensive, saturated and non-transparent, with unclear
ownership of media outlets, opaque financial operations, and an unsupervised advertising market.
2.3. Public Opinion of the Media Landscape
One-fifth of citizens, surveyed as part of the PEA study could not find sufficient information on media
developments. The spread of ‘fake news’, the political instrumentalization of media and lack of
professionalism have been perceived as main problems of Serbian media, by respondents.
Citizens also believe that the political party in power, as well as oligarchs and the government more
generally, exert significant influence over media. Media owners and editors are listed as fourth in terms
of influence.
Chart 3.2.1. In your opinion, who exerts the greatest influence on media outlets’ editorial policies? (%)
Politicians from ruling parties 29.4
Local oligarchs and business people with dubious money 16.6
The government of Serbia 12.5
Media outlets’ managers and editors 11.8
No-one, journalists are free to report as they see fit 8.5
Politicians from opposition parties 5.8
Governments of the foreign countries 4.2
International media corporations 4.2
Serbian businesses 0.4
Does not know, Cannot tell 6.6
0 10 20 30 40
Key finding: Fake news, politicization, and lack of professionalism among journalists are seen as the key
problems in the media. Editorial policy is perceived as being under the control of the ruling party,
oligarchs, and the government.
2.4. Why a Political Economy Analysis?
This PEA provides in-depth analysis of the state of the media and media sector as a whole in Serbia by
(1) considering the effects of foundational socio-economic and external factors on identified groups of
problems, (2) identifying key legislation and stakeholders, both institutional and non-institutional, their
capacities, motivation, incentives and power dynamics among them; and (3) understanding socio-political
Political Economy Analysis - Revised 9
Strengthening Media Systems Projectforces and changes to the media sector while defining recommendations that seek to address the state
of the media market and contribute towards the achievement of objectives of the Strengthening Media
Systems (SMS) Project.
In undertaking the PEA, the emphasis was placed on the regulatory environment and the media market,
particularly its digital segment. The context for this PEA is also colored by both local and global challenges
(described above) as well as the EU accession process that Serbia is undertaking. In addition, a new Media
Strategy is under development in Serbia that ought to define key trends for the future.
The methodology was based on the USAID Applied PEA Framework 2, as well as ideas developed through
the Thinking and Working Politically Community of Practice 3 and from the Doing Development
Differently manifesto. 4 According to these, PEA is an analytical approach to help understand the
underlying reasons why things work the way they do and identify the incentives and constraints impacting
the behavior of actors in a relevant system. By helping identify these influences—political, economic,
social, and cultural—PEA supports a more politically informed approach to interventions. As such, it aims
to provide useful information for implementation, learning, and adaptation instead of being a one-off
exercise with a stand-alone product.
Accordingly, this PEA looks into three dimensions: Foundational Factors (e.g. demography, politics,
economy, and EU accession process), Main Problems in the Media Sector, “Rules of the Game” (e.g.
formal and informal rules and norms that shape public and private actors’ behavior, incentives, and power
relations) and the Here and Now (e.g. how current events and circumstances influence the objectives,
behavior and positioning of key actors). Recommendations for the SMS Project are identified through
analysis of these dimensions.
2.5. Team, Approach and Methodology
The complexity of the PEA required a careful definition of the approach and methodological framework
employed, and, as such, the creation of a team able to meet the requirements of this endeavor. The
broader framework was determined by good PEA practices adjusted slightly in this case so as to better
suit the local environment. This PEA was a five-stage process that included (1) Problem Definition,
(2) Analyzing Power, (3) Analyzing Change, (4) Strategy and Planning, and (5) Monitoring, Evaluation,
Adaptation, and Learning. Adaptation to the local context involved in-depth research of the demographic,
political, and economic context, review of the EU accession process, and a poll designed to capture the
opinions of the broadest media-consuming public.
The research followed an inclusive and participatory approach. Inclusiveness meant involving all
key groups of media stakeholders, from media outlets (both traditional and digital), to digital businesses
and distributors, to advertising agencies and international organizations/donors. The participatory process
entailed collecting inputs through an interactive, participatory and innovative workshop that brought
together major media and journalist associations.
The methodological framework comprised five stages: (1) desk research that looked at existing studies,
data, laws and policy papers; (2) development of instruments for quantitative and qualitative research; (3)
quantitative research (from 15 to 30 July) performed using the Computer-Assisted Telephone Interview
technique (CATI) on a representative sample of 1,000 respondents aged 18 and above to capture public
opinions of the media and the media environment, confidence in the media, media market, and potential
business models; (4) qualitative research (from 20 June to 5 July) through participatory drawing method
and in-depth interviews with 22 representatives of 18 organizations / institutions; and (5) a participatory
workshop held on 5 July, attended by representatives of key media and journalist organizations (see
2
For more details, visit the following link:
https://usaidlearninglab.org/sites/default/files/resource/files/applied_pea_framework.pdf (last retrieved on 30 July 2018)
3
For more details, visit the following link: https://twpcommunity.org (retrieved on 3 July 2018)
4
For more details, visit the following link: http://doingdevelopmentdifferently.com (retrieved on 3 July 2018).
Political Economy Analysis - Revised 10
Strengthening Media Systems ProjectAnnexes). The entire process and creation of this PEA was continuously peer reviewed by the SMS team
as an additional quality control mechanism.
The PEA team comprised Bojan Klačar, communication scientist and project manager (CeSID), Ivo
Čolović, researcher, and four consultants in various areas of expertise: Sever Džigurski, PEA and
qualitative research expert; Srđan Garčević, digital media economics expert; Saša Mirković, regulatory
expert and Miloš Stojković, Media Lawyer, with revisions and guidance from IREX SMS staff. This team
brought together different perspectives, research methods from both positivist and interpretivist
traditions, as well as activist, institutional, and academic backgrounds.
2.5.1. Methodological Limitations
Media sector assessments in Serbia usually face challenges and methodological limitations, with two types
of particularly difficult constraints:
• There is little access to research findings, in particular those of media measurement, and information
is scant about government transfers to media outlets, both in co-financing for media content and fees
for media services (PR, advertising, etc.). Access to research data is limited as measurements are
mainly commissioned by businesses and the resulting findings are proprietary. Government
information is opaque due to poor transparency and the absence of machine-readable data.
• Methodologies employed for researching the media are inconsistent and publicly available databases
are rare, which virtually inhibits any meta-analysis or in-depth investigation of data.
Interviews with state institutions were not conducted due to the announced replacement of key
personnel at the relevant Ministry for Culture and Information. However, one of the consultants for this
PEA (Saša Mirković) served as state secretary for media. Further, REM as a key regulator was part of the
introductory survey and a snapshot analysis of the legal framework was prepared by IREX prior to this
PEA analysis.
3. Serbian Media Landscape
This section will outline the main features of the Serbian media market, available facts related to media
outlets, their popularity and influence, and finally present citizen’s perception of the state of media, based
on the survey findings.
3.1. Media Market: Key Features
As of 1 February, the Media Register contained 2,034 media outlets, of which 1,263 had
submitted all information required by the Law on Public Information and the Media (Prava
mera medija, 2018: 10). Information provided by REM puts the number of registered media service
providers at 678. The number of media registered as business entities in the Serbian Business Register is
816 (IPSOS, 2018).
Table 3.1.1. Total number of media outlets registered in the Media Registry (all active media outlets)
ending on 01/02/2018 (source: Prava mera medija, 2018: 10)
Type of media Number of media
Other 16
Daily and periodical newspapers 863
Undefined 123
Radio 309
Political Economy Analysis - Revised 11
Strengthening Media Systems ProjectIndependent electronic editions of internet portals 423
Independent electronic editions of editorial design websites 57
News agencies 23
Television 211
TOTAL 2.034
There are no official data about how much the Serbian media market is worth; the only estimates are
made by Nielsen (Prava mera medija, 2018: 8).
In 2017 the advertising market for media was valued at €176 million net, of which television
accounted for more than one-half (55%); print media came in second, at 16%. The remainder
of the list was made up of online, at 15%, OOH, at 11%, and radio, at 4%.
Table 3.1.2. Media market, in Serbia and other countries 2017 (Prava mera medija, 2018: 94-108)
Country Media market (net)
Serbia €176,000,000
Bosnia and Herzegovina €33,000,000
Croatia €206,000,000
Slovenia €162,000,000
Montenegro €10,000,000
Macedonia €55,000,000
Bulgaria €228,000,000
Hungary €614,000,000
Czech Republic €1,340,000,000
Romania €473,000,000
Poland €2,347,000,000
The figures for Serbia are estimates determined by a variety of types of measurement approaches and
methodologies. There are no estimates for local media, which limits their access to any major advertising
revenue. Advertisers prefer media with clear rating figures due to the measurable indicators
for further monitoring and evaluation of campaigns and clear rules of international
companies and/or media buying agencies. Adequate and appropriate media surveys at the local and
regional level would provide space for a stronger entry of advertisers. Further, public funds channeled
into the media in various ways are a potentially opaque area, especially as, according to estimates, the
sums involved are huge.
Several recent examples show that other types of state involvement in the media market,
such as taxation and loans, seem to benefit major players in the market. Oft-cited examples
are export guarantees and loans of several million euros provided to Pink International Company, the
largest private TV company, by the Serbian Export Credit and Insurance Agency, as well the fact that Pink
was one of the largest tax debtors for several years in a row. On the other hand, local media, such as
Vranjske Novine, which stopped its print run in 2017 after a tax inspection, consider themselves under
onerous scrutiny of tax authorities (CINS: January 18, 2018). These examples suggest the effects of
Political Economy Analysis - Revised 12
Strengthening Media Systems Projectunpredictable media market with non-transparent decisions of state institutions within media sector and
unequal treatment of media outlets having in mind their editorial policies.
By way of an illustration, in 2017, a total of RSD 233 million (€1.9 million) of public funds only
at state level were used to co-finance media content. Eight million dinars were allocated to media
in Kosovo and Metohija; RSD 41.8 million was spent on content in minority languages (disbursed by two
government bodies); RSD 85,997,865 was expended on print / radio / Internet / agencies; TV stations
received RSD 70 million; RSD 20 million was spent on improving compliance with professional and ethics
standards; and RSD 10 million was used for public information for people with disabilities (Ministry of
Culture and Information, Public Calls, 2017). 5
At the same time, media ratings are fraught with problems due to the variety of approaches used in
research and lack of accessibility of the findings (as these are mainly market research exercises
commissioned from opinion polling agencies). Information for print media is particularly unreliable as
there is no circulation audit while figures for radio lack the benefit of continuous research or advertising
tracking for radio stations.
Key finding: The media market was worth €176 million in 2017, with the greatest share (more than
one-half) claimed by television stations. This estimation is substantially lower than in 2008, the record
year, when the market was valued at €205 million.
3.2. TV Remains Key, but Digital Media are Growing in Importance
According to Media Ownership Monitor, TV is still the most popular in Serbia (consumed by
70.7% of the population), ahead of digital media (53.3%), radio (36.8%), and finally print
media (23%).
This split is somewhat reflected in the estimated split of the advertising market, which amounted to €176
million in 2016, according to Nielsen Serbia. Advertising spend in Serbia was primarily focused on TV
(55%), and then on print media (16%), digital (15%) and radio (4%) with the remainder going to OOH
advertising.
5
This excludes nearly RSD 20 million spent on programming aimed at ethnic Serbians living in other countries in the region.
Political Economy Analysis - Revised 13
Strengthening Media Systems ProjectChart 3.2.1. The advertising market structure for the period 2008-2016, in % (source: Prava mera medija, 2018:
6) 6
2016 55 17 10 4 13
2015 54 19 11 4 11
2014 53 20 12 5 10
2013 54 21 11 5 9
2012 56 21 11 5 7
2011 55 23 11 4 5
2010 56 23 12 5 4
2009 59 22 13 4 2
2008 55 25 15 4 1
0 10 20 30 40 50 60 70 80 90 100
TV Print OOH Radio Internet
The importance of television is underscored by the fact that 40% of Serbians spend their time between
8pm and 10pm watching TV. Although there are more than 200 TV stations in Serbia, only 5 of them
have national coverage and they attract over 60% of all TV audiences (Media Ownership Monitor Serbia).
Television, radio and print media markets are also concentrated. Shares of audience of top 4 players in
each medium are high: 63.27% for print media, 62.35% for television audience, and 51.2% for
radio.
Table 3.2.2. Main players, share of audience (source: Media Ownership Monitor)
Market Mainstream media/groups SHR
TV PBS, Pink Media Group, Antenna Group and Happy TV 62,35%
Radio Media Tim, Maxim Media Group, PBS and Antenna Group 51,2%
Print Ringier Axel Springer, Adria Media Group, Insajder Team and Novosti 63,27%
Media Ownership Monitor estimates that owners and managers of TV outlets who publicly endorsed the
current government serve 40.2% of the Serbian audience. The results are even starker for radio (42.6%)
and print media (50.73%).
Although there is large vertical concentration of ownership and audiences, no media outlet has stakes in
all three traditional types of media. As financial data is kept private and ownership of the media remains
elusive in Serbia, it is impossible to see whether large shares of audience correspond to dominant shares
of profits in the sector and whether they are maintaining their dominance through sustainable financial
practices.
6
The difference to 100% consists of the other media / channels.
Political Economy Analysis - Revised 14
Strengthening Media Systems ProjectThe most significant media outlet overall remains the public broadcaster RTS, with a total
audience share of about 20%. It is followed by private Antenna Group Serbia (14.6%), Pink
Media Group (12.2%), S Media Team (7.2%), Ringier Axel Springer (5.9%). Harmonized legal
framework and completion of digitization process in Serbia have fundamentally affected the broadcasting
and audio-visual markets. The changing environment became intensively competitive with new
private market players, especially as network operators and internet companies entered
the emerging Serbian market. The emergence of new media services such as on-line information
services and non-linear or on-demand services further deepened the gap between the citizens and PSBs.
Moreover, due to extremely low levels of collection of the PSB tax caused by economic crises in late
2000s and early 2010s, both PSBs were additionally struggling with their daily operations. In order to help
PSBs, the state has financially supported both PSBs from January 2014 in accordance with the EU state
aid rules. RTS and RTV continue to be partially financed from the state budget and partly
from public service broadcasting tax. Based on the latest financial report (2017), total incomes for
PSB is 11 billion dinars or €93 million. Basic state funding from the budget for RTS is €26.2 million, while
RTV receives €7.6 million; both also receive state funding for projects such as construction of RTV’s new
building in Novi Sad. According to its 2017 Annual Report, RTS’s revenue composition was 45.6% from
the public broadcaster tax, 28.1% from the Serbian budget, and 22.7% from advertising revenues (RTS
Annual Report 2017: 27). For RTV, the revenue came from the public broadcaster tax (52%), Serbian
budget (41.7%) and advertising revenues (3.1%). The remainder of revenues for both RTS and RTV came
from state grants and donations, financial and other income.
The importance of radio stations in Serbia declined compared to the 1990s when independently owned
radio stations (like B92 or Index) played a crucial role in fostering opposition to Milosevic’s regime.
Currently, over 300 radio stations in the country mostly focus on music rather than reporting
or other spoken-word programs, most probably due to the low share of advertising revenues, given
that top six radio stations dominate over half of the total audience. Those six top radio stations in Serbia
are owned by media groups S Media Team, Maxim Media Group, Antenna Group, and RTS (Serbian State
Broadcaster).
In line with global trends, print media in Serbia are struggling, and, in terms of readership, the market is
dominated by tabloids. Although there are over 800 registered print media in Serbia, the three
main tabloid newspapers (Blic, Informer, and Kurir) control over 50% of the market, while
magazines and quality newspapers are struggling (Media Ownership Monitor Serbia). Print also
suffers from the decreasing amount and share of the advertising spend. Nielsen Serbia estimates that
print advertising in Serbia was worth €30 million in 2016, while the share of print in total
advertising spend dropped from 25% in 2008 to 17% in 2016.
The importance of digital media in Serbia is growing considerably. They are not only diverse in
their offerings, from traditional news portals and blogs to online TV shows, but also offer a greater
diversity of opinion and information than traditional media. Unsurprisingly that made them home to most
of Serbia’s investigative journalism organizations (KRIK, CINS, BIRN etc.).
Serbians are also embracing the internet as a major news source. Media Ownership Monitor reports that
out of more than 3 million Serbians who use the internet daily, over 77.4% of them use it to access
internet news portals and other publications. Although advertisers are also increasingly turning
their budgets towards digital, sustainable operation of digital media in Serbia remains a
challenge.
Serbia’s most popular news portals are either parts of larger media organizations (Blic, Informer, N1), are
backed by government project funding (Srbija Danas), or supported by private wealth -Telegraf.rs (Media
Ownership Monitor Serbia, 2017).
Growth of sustainable independent digital media in Serbia is restricted by the lack of
donation culture in the country, low disposable incomes, as well as legal and technical
Political Economy Analysis - Revised 15
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