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Media in Chains: Lights, Camera, Capture

By Krisztian Simon

Censorship is a thing of the past. Governments have many other tools to suppress free media, especially since unexpected market developments have made media organisations increasingly vulnerable to political interference.

‘Media capture’ – practicing journalists these days (and increasingly the journalists of Eastern EU member states) know this term all too well. By this, we mean a situation in which a particular media organisation – be it a television or radio station, or a print or online news outlet – is unable to function in an autonomous way, cannot cover the necessary number of topics, stories, and angles that are necessary for media consumers to make an informed decision, or cannot act as a watchdog of politically or economically powerful groups, due to its dependency on the goodwill of some interest groups. This can include media that have to echo the ideological views of their owners, outlets that have to make compromises in order to please their advertisers, or specialised media with a great overlap between their audiences and report subjects (such as in the case of economic and financial outlets that usually cater to the financial elite).

The term capture was first used in economics and referred to the rather intimate relationship between big business and market regulators. The related issue of the so-called “revolving door” has also been thematised by Green MEP José Bové, while MEP Philippe Lamberts told the Green European Journal not so long ago that one of the reasons for the banking crisis was that regulators were too close to the banks they were supposed to regulate.

Media scientist Ben Bagdikian emphasised in the 1990s that, in the United States, the media was dominated by five corporations whose leaders have “more communications power than was exercised by any despot or dictatorship in history.” And even if these leaders are or were benevolent actors with no desire to use their communications power to manipulate readers, business logic would push them in a direction in which they expect their management and journalists to produce the kind of output that promises to increase profits. This, however, doesn’t necessarily coincide with the public interest. Neither does the fact that, in the last few years, politically exposed people have started buying into media, often in order to use them as a means to push their private agenda.

Ownership matters

According to Eli Noam of the Columbia Business School, media ownership has historically manifested itself in three stages depending on how advanced a country’s economy is: the first stage is ownership for the sake of influence (be it political or economic); the second stage is the creation of synergies (among other reasons, for management sharing, the reduction of transaction costs, a diversification of risk, or the ability to cross-sell products to customers); and in the third stage, media ownership is a means to diversify one’s financial portfolio.

In richer countries, we see less examples these days of media that are owned for the sake of influence. A well-known exception is Silvio Berlusconi, whose television stations helped him become prime minister of Italy, while in Israel, the casino tycoon Sheldon Adelson has founded a political daily that is distributed free of charge and often takes a stance in favour of the owner’s good friend, Prime Minister Benjamin Netanyahu. In the US, Adelson has bought the Las Vegas Review Journal, the major daily that covers a city where he has numerous investments. Noam also mentions Amazon-owner Jeff Bezos’s acquisition of The Washington Post, which appears a rather puzzling issue: it could easily look as if he owns the paper for the sake of pushing his own agenda, but in practice it seems to be more of a financial liability for him and his other businesses (US President Donald Trump, for example, has many times attacked Amazon for not paying its fair share of taxes, which might be due to The Washington Post’s critical stance towards the president).

In Eastern as well as Central Europe, however, there are countries where media being owned for the sake of political control of audiences or the advancement of other goals is more the rule than the exception. In Russia, for example, Vladimir Putin’s regime relies on a wide range of friendly outlets when it comes to convincing the voters that the government is always right. The state-controlled TV Pervy Canal and NTV, the TASS news agency, the popular tabloid, Komsomolskaya Pravda, and the official newspaper of the Duma, Parlamentskaya Gazeta, all promote the Kremlin’s agenda, while the international RT (formerly Russia Today) television station and the Sputnik website, which are available in many different EU languages, “aim to undermine the confidence of international audiences in the legitimacy of their governments, as well as in the Western liberal order” (for more, see the Green European Journal’s interview with political scientist, Anton Shekhovtsov).

In Turkey, Reporters Without Borders has found during its research for the Media Ownership Monitor project that 7 out of the 10 most read daily newspapers are affiliated with the government. Moreover, if we look at the biggest publishing houses and media companies, we can see that most of them belong to companies who have an interest in a wide range of sectors such as construction, energy, mining, and tourism, and often apply for public tenders, thereby making it necessary for them to curb their journalists. Those media workers who don’t obey orders run the risk of being imprisoned. And even in the EU-member state Hungary, entrepreneurs close to the government have acquired all regional newspapers, the second-biggest television station and many other outlets, and used them to run smear campaigns against civil society organisations and opposition party politicians. In Slovakia, one of the leading newspapers, SME, was bought by the Penta financial group, a company SME often reported on (as Penta was at the centre of one of the country’s biggest corruption scandals), while in the Czech Republic, Martina Vojtěchovská, editor-in-chief of MediaGuru.cz, writes that many formerly foreign-owned media are by now owned by the current Prime Minister Andrej Babiš, who appointed his loyalists in key positions. Many of these outlets were reluctant to write about their owner’s corruption cases.

The four shades of capture by government

When a government wants to subjugate the media, there are four financial strategies it can follow. According to Marius Dragomir, Director of the Center for Media, Data and Society at the Central European University, these are as follows: public funding for state-administered media, state or public advertising, state subsidies, and market disruption measures. We see examples of these in all corners of the world.

While public-service media are state funded all over Europe, there are some cases, especially in the new member states, in which public service is seen as a taxpayer-supported propaganda tool for those in power. Therefore, every change in government is accompanied by a change of public media leadership, as well as the fine-tuning of messages conveyed in their political shows. Two of the most extreme cases in the EU are Hungary, where the state provided funding worth close to 280 million euros to the public service media in 2016, and neighbouring Romania, where the public media was supported with approximately 300 million euros, while these outlets were heavily criticised by independent observers for their biased reporting.

Every change in government is accompanied by a change of public media leadership, as well as the fine-tuning of messages conveyed in their political shows.

State advertising is another example of capture which is common in countries as diverse as Pakistan, Macedonia, Spain, Moldova, and many others. This form of advertising is often used as a form of covert state subsidy, as state or public advertising campaigns, whose worth can reach tens of millions of euros and place the government amongst the biggest advertisement spenders, may disproportionately favour those news outlets that refrain from criticising the state. Dragomir even mentions cases when EU funds were channelled to friendly media organisations, such as in the case of Bulgaria, where in the years 2007 to 2012, 36.6 million euros were spent on campaigns promoting EU operational programs, but the contacts for disbursing these funds weren’t made public. These advertisements are particularly important in these media markets, as in many parts of the world newspapers were hit hard by declining circulation, and most news outlets suffer from advertisers’ reluctance to spend money. Therefore, outlets that are critical can hardly set up a profitable venture.

State subsidies can also play a major role in capturing media. A 2014 survey of the Open Society Foundations has looked at 35 countries and found that 28 of them have provided “significant” subsidies to media organisations, and in at least half of those countries there was evidence that the state subsidy was used to manipulate the media in question. In France, for example, press subsidies are a tradition that goes back many decades; newspapers have received more than 1 billion euros during the years of the economic crisis, but many commentators believe these have had a number of adverse effects on the industry as a whole, hampering innovation and decreasing journalistic quality.

In another example, Serbian authorities gave a huge cash injection to the state-controlled news agency, Tanjug, thereby giving it a competitive edge over the independent news service, Beta. This, again, can have a major impact on the pluralism of opinions: it is common for press agencies in (semi-)authoritarian countries to be controlled by the government, meaning that a primary source of journalistic work (especially relating to issues that a small newsroom cannot cover with its reporters in the field) will become biased, and thus journalists and editors have to spend extra time double-checking this kind of information.

Finally, market disruption measures are legal methods used to achieve a similar kind of pressure on the media. In 2013, for example, the Hungarian government introduced an advertising tax which targeted the country’s biggest public TV station, RTL Klub. According to Dragomir, this tax would have “crippled” the Luxembourgish company’s Hungarian station, and many commentators believe that the tax was proposed by Hungarian Prime Minister Viktor Orbán’s government with hopes to pressure the company into selling its outlets in Hungary. In fact, the European Commission later found that the Hungarian advertisement tax was in breach of EU rules.

Another example comes again from Russia, where a law that came into force in 2016 bars foreign investors from holding more than a 20 per cent stake in the country’s media outlets, which led the owners of the business daily Vedomosti to sell their share to a local businessman. Meanwhile, Freedom House reported that in 2015 the Polish government introduced legislation that terminated the board members of the National Broadcasting Council (KRRiT), which aims to regulate the country’s broadcast media. Later, the government created the new National Media Council, which is dominated by the members of the governing party.

In is needless to say that all these measures lead to self-censorship and biased reporting in which the media is ever less ready to deal with the wrongdoings of the state; critical journalism in countries where the media is severely captured is limited to a handful of relatively small outlets that operate mainly on the internet and are capable of reaching much fewer people than the well-funded media apparatuses of today’s despots.

New technology, new challenges

This development has been unexpected, even for many industry insiders. In the late 1990s and early 2000s, media scientists still expected that lower barriers to participation in online journalism (vis-à-vis print) would lead to increased competition, a multiplication of easily accessible quality contents, as well as a flourishing and profitable online environment, in which media capture would become almost impossible.

In reality, however, the profits of online content creation were reaped by such internet corporations as Google and Facebook (Google was expected to represent a third of the world’s more than 180 billion euros in digital advertising revenue in 2017), while content producers, who used to derive the overwhelming majority of their incomes from advertisement, ended up with an ever-shrinking slice of the cake. In many countries, this also meant that foreign investors started selling parts of their portfolio, and many outlets thereby became easy prey for authoritarian governments and the regime-friendly oligarchy.

Efrat Nechushtai of Columbia University adds that Google and Facebook – two companies that don’t produce content themselves – are not only competing with the online news media for revenues, but that the online news sites also heavily rely on these platforms’ infrastructure, as many readers now arrive on news sites through social media or search engines, leading to new vulnerabilities for the online media. Last year, for example, when Google “adjusted [its] signals to help surface more authoritative pages and demote low-quality content” in its fight against fake news, left-leaning sites like the World Socialist Website, AlterNet, Democracy Now!, Common Dreams, and Truthout have lost up to 45 per cent of their search result traffic.

And since there is still not sufficient willingness from the side of readers to pay for content (or in some cases, not even enough purchasing power), many news sites have to resort to the production of clickbait content in order to maintain their readership and present the necessary numbers to the advertisers. In this situation, however, there is less capacity in a newsroom to produce long reports or to conduct investigations.

The situation can only improve if the public and policymakers realise that quality journalism cannot be taken for granted, and that serious measures must be taken to save it

There are of course efforts to overcome these challenges: while newspapers try to increase the revenues derived from print readers by increasing their prices, for example, news sites are experimenting with crowd funding and online subscription methods in order to monetise their activities. Moreover, there are foundations and other donors who provide project-based or sometimes even no-strings-attached funding for journalistic activities. The latest such project, the European Commission-funded “Investigative Journalism for the EU” fund, was launched in March 2018. Nevertheless, neither the current level crowdfunding, nor foundation support, nor any other new income source has yet proven sufficient to overcome the problems associated with media capture; news outlets still have to cope with threats from unpredictable owners, suppressive governments, and a volatile market, while many of them have to go through painful cost reductions and lay-offs in order to minimise their exposure to outside agents. The situation can only improve if the public and policymakers realise that quality journalism cannot be taken for granted, and that serious measures must be taken to save it.

Media in Chains: Lights, Camera, Capture

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