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Croatia’s media: arrested developmentA decade ago European institutions saw Croatia’s media sector as hopeless, with little or no possibility developing to recognized standards. The new century brought considerable donor involvement in media but only modest attention from major broadcasters and publishers. The European Union declared Croatia last November a functioning market economy, another step toward EU accession and signal that the ‘post-donor’ era had begun.
Media, too, grew post-independence, post-war and post-recession. As with much of the former Yugoslav stew it grew through the generosity of others as well as an unhealthy salting to the regional taste for graft and corruption. As the dictators passed on – literally and figuratively – and reforms mandated by the Stability Pact for South East Europe (SP) and the European Union took hold Croatian media moved up the widely published scales of sustainability and press freedom…until 2006. Television is by far the most accessed medium in Croatia and newspapers are ‘screaming’ to gain reach. “There is a steady decline in production of newspapers,” writes the European Journalism Center’s 2006 description of Croatia’s media landscape. TV ad spending per capita in Croatia is nearly as high as in Slovenia or the Czech Republic, though less than half the Western European rate. There are a dozen radio channels with national reach and more than 130 local stations. New media accessibility is low but growing; internet access is expensive. Eight percent of Croatian households access media through IPTV. On-line advertising in 2006 was still less than 1% of all ad spending. Investment by major European media companies in the Balkans is appreciated, reluctantly, by international media watchers. Most appreciated is capital infusion and professional management. Least approved is the profit motive and ‘deals’ made with politicians. That private sector foreign media investors steer their products and services toward entertainment, oft described as ‘trivial’, and away from ‘journalism’ is a constant criticism.
And Croatia has benefited from investment from a few of Europe’s media biggies. WAZ (Westdeutsche Allgemeine Zeitung) took a 50% stake in Europa Press Holdings (EPH) in 1998, publisher of Jutarnji List and the Croatian Metro Express franchise and magazines Globus and Gloria. WAZ also took a small share of Slobodna Dalmacija in 2005. Austria’s Styria Media acquired Vecernji list in 2001 and launched tabloid 24sata in 2005. Sanoma Magazines International, Gruner + Jahr and Stryia in 2006 formed Adria Magazines Holding a joint venture to publish magazines in Croatia, Serbia and Slovenia. Gruner + Jahr bought Hubert Burda Media’s South East European assets and folded those into the Adria Magazines joint venture. Local Croatian press ownership is led by NCL Media Group, publisher of the well-regarded weekly Nacional. Founded in 1995, Nacional sells about 40,000 copies weekly and is one of most stable publications on the market. Through a cash insertion by Austrian venture capital group VCP, NCL Media has grown to 18 publications and web portal nacional.hr. Over the last two years media watchers have expressed increasing concern about “tabloidization” in the print sector. Yes, Metro Express and other free newspapers arrived. Croatian newspapers have virtually no subscription base, 97% of sales are from street corner kiosks. Attracting passer-bys attention is done the Murdoch way: bold, provocative headlines and bold, provocative pictures, either nude or bloody. Central European Media Enterprises (CME) owns the leading free-to-air national commercial television channel Nova TV. After buying the channel in 2004 for $20 million and investing another $60 million in upgrades CME has yet to turn it profitable despite a 30% ad market share. A significant part of CME’s investment in Nova TV has been locally produced Croatian language programming. A year ago Serbian TV Pink owner offered to buy Nova TV. CME boss Michael Garin, so far, isn’t interested in selling. RTL Group and local investors acquired terrestrial TV channel RTL Televizija in 2004 when the State broadcaster was forced to give up one of its three. Slowly RTL has been buying out the investors and now owns a clear majority. In September RTL announced it would be launching three cable channels in 2008. The 12 regional and local television channels and all the radio stations are locally owned. Current media laws, considered draconian by current and potential investors, restrict cross-media ownership. A newspaper company, for example, cannot own more than 25% of a company in another medium. Similar rules apply to companies holding national licenses or franchises, restricting ownership in local and regional channels. Considerable investment in time and money has gone into Croatian State radio and television (HRT Hrvatska Radio Televizija). In the last decade foreign donors, largely directed by the Security Pact, OSCE and European Commission, have contributed more than €250 million to media development projects in the Balkans, reported the Balkan Investigative Reporting Network (BIRN). Converting HRT to the Western European public service broadcasting model from political propaganda tool has been a major fight – literally and figuratively. The late Croatian dictator Franjo Tudjmans’ nationalistic authority over State media neither ended with his death nor the ouster of his legacy political party. Through the 1990’s official intolerance of media independent from the State contributed to delays in further European integration. During the first half of the 1990’s Croatia was constantly on a war footing with neighboring and invading Serbia. It was only after considerable pressure from European institutions that media laws were changed (again and again) to reflect the European definition of public service broadcasting that HRT finally emerged as reasonably independent from political control. HRT operates two terrestrial television channels along with three national and eight regional radio channels. Earlier this year a meeting of the HRT program council deteriorated into a boxing match as members failed to elect a General Director. Vanja Sutlic, formerly the HRT Deputy director, was finally elected. When Croatia finally joins the European Union direct State subsidies to HRT will, in theory, come to an end. HRT’s monopoly in the advertising market was so absolute in 1997 that it was considered a major source of State revenue, collecting nearly €40 million that year, and considered one of the country’s major industries. Today, Croatian ad spending averages about €40 million a month. 
This ‘post-donor’ era in Croatia can potentially contribute to weakness within regional and local media. With most attention (and money) of international and European institutions on changing media laws and restructuring HRT and most private sector investment in national media (and now in web products and services) plurality on a local level, where most people live, is threatened. IREX (International Research and Exchanges Board – through a grant from the US Agency for International Development USAID) funded a network of regional and local television stations (Croatian Commercial Network) to support program production and advertising sales until 2005, after which the network went out of business. About 100 local radio stations currently government owned should, if all goes according to plan, be privatized by the end of 2007. Current conditions do not bode well for their continued sustainability. IREX created a Media Sustainability Index (MSI) to measure, with reasonable objectivity, media and its supporting institutions. In 2004 Croatian media was declared sustainable, primarily on the strength of business management practices brought from foreign media investors and training programs from international donor organizations. And it continues to lead all South East European States in average scores. With the 2005 MSI Croatia started to step backward. "The media success stories in the Balkans are all based on strong local media organizations that were able to attract foreign funding through inventive strategies and a lot of risk-taking, both financially and politically," said Per Byman of the Swedish Development Co-operation Agency to BIRN last year. "The failed projects are those that were started or promoted from outside, with little or no local support." |
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Granted, Croatia is small; 4.4 million people with a €7,706 (2006) per capita GDP. No economic sector is exactly booming and most trade is with Germany, Italy and neighboring countries. Services contribute about two-thirds of GDP. “Croatia’s economy is not inherently weak,” said a report by PINR in 2005. The five-year economic ‘boomlet’ following the 1998-1999 recession, which gave Croatia the reputation as the ‘economic engine’ among the former Yugoslav States, was fueled by post-war reconstruction, debt and consumer spending. 